cash vs financing

     Cash will result in the quickest payback period because you will avoid the interest associated with financing. But, financing allows you to go solar for $0 out of pocket and not affect your immediate cash flow at all except lower your monthly payment. 

     Generally speaking, a 5 year loan will result in a higher payment than what you’re currently paying, but in 60 months you’ll have a paid off system and no more monthly electric bills.

     An 8-12 year loan term is the sweet spot for most people because the 8 year payment is pretty close to what the SDGE bill was before going solar. A 12 year loan should yield a payment similar to your old SDGE bill even without applying any tax credits. If you do choose to pay down the loan with the tax credit, the payments will be significantly lower than your SDGE bill.

     20-25 year loans are the longest terms for residential solar and they will result in the lowest monthly payment. But, more interest will be paid over the long run.

     In even the worst case scenario, the interest will always be much less than what it costs to stay with SDGE. Below is a visual representation of somebody going solar with a current SDGE bill of $200/ month and a gross cost of $20,000.