No Money Down Solar

August 6, 2007

That’s an intriguing lede to an article. Many of you may be suspicious that I’m going to be talking about CitizenRE and their alleged "free solar energy" offer, but this isn’t about that program. (And if you aren’t familiar with CitizenRE, I recommend that you take a look at the three-part series from Mike Taylor that discusses the program starting here.) Instead, I’m refering to an intriguing point that is made in an article titled "10 MORE Things to Know Before Buying a Solar Electric System" by Bruce Karney from It’s not a get-rich-quick scheme, but rather a simple fact of finance for people in regions where they are currently paying high rates for their electricity. If you are paying more than 20 cents per kilowatt hour, this may be applicable to you.

The article skips many of the basic things that many people considering solar are already well aware of, such as that a solar PV system needs to be installed on a south or southwest facing (for installations in the northern hemisphere); those are covered in his preceeding article. Both articles provide good information, and are highly recommended reading, especially if you are seriously considering buying a solar PV system.

However, the most intriguing item to me in the article was the line "You can buy a solar system for no money down." For many homeowners with concerns about the costs and cash flow, PV panels are seen as a pricey addition that they just can’t afford to pay for right now. But that’s not necessarily the case. As Karney explains,

"You can buy a solar system with no money down. If your credit is sound, you can take out a home improvement loan for the entire cost of the system. If your monthly electricity bill is more than $150, the amount you spend paying back the loan plus your small residual electric bill will be less than you’re paying now for electricity. In other words, your PV system will put money in your pocket every month from the first day you install it. Once the loan is paid off in 15 years or so, the amount of positive cash flow will jump dramatically."

One very important caveat to this, however, is that this is from an article written for San Francisco Bay area residents, where a competitive market for solar power systems and high electricity costs combine to make this scenario more likely. It may not necessarily apply to everyone’s situation, but it useful to consider nonetheless. My own electric bill is not nearly this high, so this doesn’t apply to my situation. But there are many people who live in higher rate regions and who use more electricity for whom this approach makes good sense.

Additionally, he offers the reminder to add your PV system to your homeowner’s insurance after it is installed. And, the question of solar PV systems taking more energy to manufacture than they can produce during their lifetime is also addressed:

Some solar system critics have said that the energy produced by solar panels is less than the energy it takes to make them, and this is simply false. The energy required to manufacture your solar panels and inverter and transport them to your home is equal to about 1 to 3 years worth of the energy produced by the PV system.

The article also offers some of the same advice that we have recommended many times before, but it still bears repeating: "Before you buy a solar PV system, do what you can to reduce your consumption of electricity. Conservation is cheap compared to solar panels. Search the web for "conserving electricity", read the suggestions, and implement as many as you can." Reducing the amount of electricity that you regularly use is both the most cost effective form of conservation as well as the greenest step you can take. Keeping the coal unburned is the best way to help green the planet.

Along with Karney’s two articles, I also recommend the recent article Shane Jordan had here on Green Options about "How to Get Your Home Ready for Renewable Energy" that has a number of good suggestions about getting your home ready to install solar power.

Article: "10 MORE Things to Know Before Buying a Solar Electric System"