HOW CAN I FINANCE THE COST OF MY PV SYSTEM?

One of the best ways to finance a residential PV system is through a mortgage loan or a home-equity loan that is secured by your property. There are two advantages to mortgage financing. First, mortgage financing usually provides longer terms and lower interest rates than other loans such as conventional bank loans. Second, the interest paid on a mortgage loan is generally deductible on your federal taxes (subject to certain conditions). If you buy the PV system at the same time that you build, buy, or refinance the house on which the PV system will be installed, adding the cost of the PV system to your mortgage loan is likely to be relatively simple and may avoid additional loan application forms or fees. If mortgage financing is not available, look for other sources of financing, such as conventional bank loans. Remember to look for the best possible combination of low rate and long term. This will allow you to amortize your PV system as inexpensively as possible. Because your PV system is a long-term investment, the terms and conditions of your PV system financing are likely to be the most important factor in determining the effective price of your PV-generated power.

HOW MUCH WILL I SAVE WITH MY PV SYSTEM?

The value of your PV system’s electricity will depend on how much electricity you consume, how much you pay your utility for electricity and how much your utility will pay you for any excess that you generate. If your utility offers net metering (and therefore pays the full retail price for your excess electricity), your calculation may be fairly easy because you and your utility will each pay the same price for each other’s electricity. You can use the calculation box (page 7) to approximate roughly how much electricity your PV system will produce and how much that electricity will be worth. Keep in mind that actual energy production from your PV system can vary by up to 20% from these figures, depending on your geographic location, the angle and orientation of your system, the quality of the components of your system, and the quality of the installation. Consider asking the installer for a written estimate of the average annual energy production from the PV system. However, even if an estimate is accurate for an average year, actual electricity production will fluctuate from year to year due to natural variations in climate.