You may have heard about the wonderful Florida Power & Light (FPL) utility solar rebate program that provides $1,000 for solar water heating systems and up to $20,000 for solar electric systems. This program can significantly reduce the total cost of ownership for a solar energy system. However, leased systems do not qualify.

Solar leasing has become popular, particularly in other states where Federal, state and utility incentives can be directed to the leasing company. Solar leasing typically benefits the leasing company more than the homeowner, but it can be a way for just about anyone with good credit to get into solar energy without any upfront costs. The rewards are much lower, but the savings line up better with the costs of having the system.

With the FPL rebate, the only incentive available to residential solar lease customers is the 30% Federal tax credit. I am recommending that you stay away from solar leasing if you live in FPL’s service territory. Don’t give up the rebate – it’s like free money!

If you don’t want to commit to the upfront cost of a solar energy system, there are options. Possibly the best option is tapping a home equity line of credit or getting a home equity loan for low cost financing of the upfront cost. You can pay down the loan once your rebate and tax credit come in, leaving just the principal on the remaining about to finance. Typically the remaining principal will be just 30-50% of the upfront cost. For example, if you invest in a $4,000 solar water heating system, the tax and utility savings would return 55% of the initial cost, leaving you with a loan of only $1,800! Solar has never been so affordable!

Another option is financing through a third party. Solar dealers have financing arrangements through financial institutions that provide a variety of same-as-cash and consumer loan options. While you will be giving up a portion of your solar energy savings to the lending institution, you will have no upfront costs and you will start saving some money immediately. Once the system is paid off, you get 100% of the savings and you own the system.

Of course, if you have a pile of cash under the mattress or sitting in a low interest bank account, or even in the volatile stock market, paying for your system in cash will provide a reliable long-term return that has one of the best risk-reward ratios possible!

The FPL rebate is an amazing once-in-a-lifetime opportunity for people who want to get into solar at a lower total cost of ownership. Unfortunately, solar lessees need not apply, as the program does not allow solar leasing. The good news is that there are financing options other than leasing, and the you can apply for the FPL solar rebate whether financing or paying cash for your system. Ask me how!