If you’re frustrated by rising electricity bills and are considering solar for your home, one of the first questions you’ll probably ask is:
“How do I pay for solar?”
There isn’t a single “right” answer, but the good news is that homeowners today have more options than ever before.
Whether you’re looking for the highest long-term return, lower upfront costs, or a simple way to start saving right away, there’s a solar payment option that fits your goals.
At Exact Solar, we offer three ways to go solar:
- Cash Purchase
- Solar Loan Financing
- Solar Power Purchase Agreement (PPA)
Each option can help reduce your electricity bills, protect you from future utility rate increases, and make your home more energy-independent.
In this guide, we’ll explain how each option works, the advantages and disadvantages of each, and how to decide which path may be right for your home.
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Paying Cash for Solar
Paying cash is the simplest and most straightforward way to go solar. You purchase the system upfront, Exact Solar installs it, and you own everything from day one. There are no lenders, no monthly payments, and no financing terms to review.
Because you own the equipment, you receive the full financial benefits of solar ownership, including:
- Electricity bill savings
- Net metering benefits
- Solar Renewable Energy Credits (SRECs)
- Complete ownership of the system
Since there are no financing costs, cash purchases typically deliver the highest lifetime return on investment.
Paying Cash for Solar May Be Right for You If:
- You want the highest long-term savings
- You prefer the simplest ownership experience
- You want to avoid monthly payments
- You have funds available for the upfront investment
While cash often provides the best financial return, many homeowners prefer to keep their savings available for other priorities. That’s where solar financing and PPAs can be excellent alternatives.
Financing Solar with a Solar Loan
A solar loan allows you to own your solar system while spreading the cost over time through fixed monthly payments.
For many homeowners, financing strikes a balance between ownership and affordability. Instead of making a large upfront investment, you can begin benefiting from solar immediately while paying for the system over time.
Not All Solar Loans Are Created Equal
When comparing solar financing options, it’s important to look beyond the advertised interest rate.
Many solar lenders offer very low promotional rates that include substantial dealer fees built into the loan. While these loans can make monthly payments appear attractive, they often increase the total project cost significantly.
That’s why Exact Solar recommends Clean Energy Credit Union (CECU).
CECU is a nonprofit lender focused specifically on clean energy projects. Their loans are designed to be transparent, easy to understand, and free from many of the hidden costs common in the solar industry.
A Solar Loan May Be Right for You If:
- You want to own your solar system
- You prefer fixed monthly payments
- You want to preserve cash for other priorities
- You still want access to incentives and SRECs
Solar Power Purchase Agreement (PPA)
A Solar Power Purchase Agreement (PPA) allows you to go solar without purchasing the equipment.
With a PPA, a solar system is installed on your home with no upfront cost. Instead of purchasing the equipment, you simply buy the electricity the system produces at a discount to your current electric rate.
In most cases, that rate is significantly lower than what your utility company charges for electricity. With Exact Solar’s PPA, that rate will be locked in for 25 years!
While Exact Solar has offered financing options for many years, we did not offer a Power Purchase Agreement (PPA) until we found one that we would feel comfortable recommending to our own friends and family.
How Exact Solar’s PPA Works
Our PPA was designed to be simple, ethical, and homeowner-friendly.
Features include:
- $0 upfront cost
- 0% escalator
- Pay only for the electricity produced
- Monitoring and maintenance included
- No ownership responsibilities
Because the rate remains fixed for the duration of the agreement, homeowners gain protection from future utility rate increases without taking on a loan.
A Solar PPA May Be Right for You If:
- You want to go solar with no upfront investment
- You prefer a low-maintenance experience
- You don’t want a solar loan
- You want predictable long-term energy costs
What Is a Solar PPA Escalator?
If you’ve been researching solar PPAs, you’ve likely encountered the term “escalator.”
A PPA escalator is an annual increase in the price you pay for the electricity generated by your solar system.
For example, a PPA may start at 10¢ per kilowatt-hour and increase by 2.9% each year. While that starting rate may look attractive, the cost gradually rises over time.
Exact Solar offers PPAs with a 0% escalator, meaning the electricity rate remains the same throughout the agreement. That means your solar electricity rate in year 25 is the same as it was in year 1.
Why Does a 0% Escalator Matter?
With a fixed-rate PPA:
- Your solar rate never increases
- Future costs are easier to predict
- Long-term savings can be greater than a lower starting rate with an escalator
A side-by-side comparison often shows that a slightly higher fixed rate can become the less expensive option over the life of the agreement.
Why Exact Solar Offers a 0% Escalator PPA
Exact Solar is a member of the Amicus Solar Cooperative, a national network of ethical, independent, locally owned solar companies.
Through Amicus, member companies work together to negotiate better products and services for homeowners.
When we evaluated PPA options, we pushed for what homeowners consistently tell us they want:
- Straightforward agreements
- Predictable pricing
- No annual escalators
- No unnecessary complexity
The result is a PPA designed around long-term homeowner value rather than short-term marketing rates.
Frequently Asked Questions About Paying for Solar
What happens if I sell my home?
If you purchased your system with cash or a loan, you own the solar equipment and can address any remaining loan balance during the home sale process.
For PPAs, the agreement can typically be transferred to the new homeowner if they meet the provider’s qualification requirements.
What happens if my roof needs to be replaced?
Solar systems can generally be removed and reinstalled during a roof replacement.
For cash and loan customers, this is typically a paid remove-and-reinstall service.
For PPA customers, additional coordination may be required because the equipment is owned by the PPA provider.
Who receives the SRECs?
Ownership determines who receives the incentives.
Cash Purchase: You receive the SRECs.
Solar Loan: You receive the SRECs.
Solar PPA: The system owner receives the SRECs.
Exact Solar assists cash and loan customers with SREC registration, certification, and reporting.
Which Solar Payment Option Is Right for Me?
The best way to pay for solar depends on your financial goals, budget, and personal preferences.
If maximizing long-term savings is your priority, paying cash often provides the greatest return on investment.
If you’d like to own your solar system while preserving cash for other priorities, a solar loan can provide a strong balance between affordability and long-term value.
If you’re looking for the lowest upfront cost and a simple, maintenance-free experience, a Power Purchase Agreement may be the right fit.
Every homeowner’s situation is different. If you’re considering solar for your home, our team can help you compare the available options, understand the tradeoffs of each approach, and determine which path makes the most sense for your goals.
If you’re considering solar in Pennsylvania or New Jersey, the Exact Solar team would be happy to walk you through your options and help you determine which payment method makes the most sense for your home.