Financing

In the past decade, adoption of solar by residential customers has grown tremendously, fueled in part by innovations in financial offerings.  The advent of financing mechanisms like leasing or power purchase agreement (PPA) relationships allow homeowners to install solar with little or no upfront costs and accounted for a large share of residential solar growth in that timeframe. Consumer loans are another increasingly popular way to finance residential solar. However, the ability to participate in these models generally requires a credit score or debt-to-income ratio minimum that can be a barrier to low-income households who generally have lower credit scores. Low-income families are also often unable to take advantage of the largest public incentive to making solar affordable, the federal investment tax credit (ITC).

The policy tools listed here provide options to expand access to financial solutions for low-income families to access solar.  For additional reading, visit Vote Solar’s Inclusive Solar Finance Framework, a report that evaluates barriers to financial products that can support solar adoption and identifies potential solutions.

  • Community Development Institutions

    Community Development Financial Institutions and Community Development Entities are mission-driven financial institutions, corporations, or partnerships that serve and empower economically distressed communities. Whether providing direct investment dollars or credit enhancements, they can play a critical role in solar development. ... [read more]

  • Community Purchase Programs

    Guiding principles: Accessibility and Affordability, Community Engagement Barriers addressed: Cost, Market Forces, Education and Outreach Also called “Solarize” programs, Community Purchase Programs help multiple homeowners go solar together, making the process easier and more affordable. Typically a third-party administrator (often a nonprofit organization or public agency) helps homeowners pool... [read more]

  • Community Shared Solar

    Shared solar programs – sometimes known as ‘community solar’ or ‘solar gardens’ – help address the physical barriers of going solar for those who do not own their home or a suitable roof. These programs allow any energy customer to subscribe or otherwise participate in a solar energy project... [read more]

  • Grants and Technical Assistance

    Grants can be used to both directly fund projects developed for the benefit of low-income customers, and provide technical assistance to community-based organizations looking to support solar development, particularly in communities of color, environmental justice communities, and low-income communities.... [read more]

  • Green Banks

    Green banks are fully or partially funded state financial institutions that support affordable financing for clean energy or environmentally beneficial projects. They hold significant potential to expand access to affordable financing for low-income communities.... [read more]

  • Hawaii

    Hawaii is undergoing an aggressive energy transformation, aimed at helping the state achieve its 100 percent renewable portfolio standard by 20451. With one of the highest customer electrical rates in the country, it was critical that Hawaii take strategic steps to achieve energy democratization, to remove barriers to financing,... [read more]

  • On-Bill Recovery/On-Bill Financing

    On-bill recovery or on-bill finance allows customers and financial institutions to use their electric bill as a means of repaying an energy-related loan. This type of program has many benefits to both customers and financial institutions.... [read more]