After using the finance option of federal tax credits and state rebates (which represent a substantial portion of the solar system cost), homeowners have options for financing the remaining balance amount. You are advised to consult your financial advisors when making these decisions.
PSE&G Solar Loan
By obtaining a PSE&G Solar Loan for 40-60% of the cost of your system, you can finance almost the entire cost of your system in conjunction with tax credits and rebates. This 10-year loan is repaid with Solar Renewable Energy Credits (SRECs) rather than through monthly payments. A “floor” price for SRECs is set at the time of the loan, minimizing the risks associated with a market commodity.
The actual loan amount and floor price will be determined by PSE&G at the time of loan application submission. (For more information, go to http://www.pseg.com/customer/solar/)
Given the very low levels of interest rates, some homeowners are choosing to self-finance their systems through home equity loans, cashing in CDs, or other sources of funds. By doing this, some homeowners are able to gain SREC revenue, combined with annual savings on electric bills, which currently yields a greater expected return than what they are currently earning on their CD or other investment. While the payback period is often longer than with the PSE&G loan, homeowners are able to generate a revenue stream by retaining the SRECs rather than surrendering the SRECs to PSE&G for the 10 year life of the loan.