Financing Options
How to Pay for Ground Mount Solar
Your options for financing a ground mount system, plus how the federal tax credit works.
The Bottom Line
Most people either pay cash or get a solar loan. Cash gives the best return. Loans let you start saving immediately without a large upfront payment.
Either way, you get the 30% federal tax credit. Avoid leases and PPAs if you can—you never own the system and miss out on long-term savings.
The 30% Federal Tax Credit
Before comparing financing options, understand the tax credit—it significantly reduces your actual cost.
How It Works
The Investment Tax Credit (ITC) lets you deduct 30% of your total solar cost from your federal income taxes. Not your taxable income—your actual tax bill.
On a $30,000 system, that's a $9,000 reduction in what you owe the IRS.
What's Covered
- • Solar panels and racking
- • Foundation (concrete or helical piles)
- • Inverter and electrical equipment
- • Installation labor
- • Permits and engineering
Example: $28,000 Ground Mount System
Total system cost
30% tax credit
Your net cost
Important: The 30% credit is available through 2032, then steps down to 26% in 2033 and 22% in 2034. If you don't owe enough taxes to use the full credit in year one, you can carry it forward to future years. Consult a tax professional for your specific situation.
Financing Options Compared
| Method | Upfront Cost | Monthly | Ownership | Total Cost | Tax Credit |
|---|---|---|---|---|---|
| Cash Purchase | Full amount | $0 | Immediate | Lowest | You keep 100% |
| Solar Loan | $0-10% | $150-300 | Immediate | Moderate | You keep 100% |
| Home Equity Loan/HELOC | $0 | Varies | Immediate | Low-Moderate | You keep 100% |
| Solar Lease/PPA | $0 | $100-200 | Never | Highest | Company keeps it |
Your Options in Detail
Cash Purchase
Pay the full amount upfront. Best financial return, but requires significant capital.
Pros
- • Lowest total cost (no interest)
- • Keep the full 30% tax credit
- • Own the system outright immediately
- • Best ROI and fastest payback
Cons
- • Requires $20-40K+ available
- • Ties up capital that could be invested elsewhere
Solar Loan (Most Popular)
Borrow specifically for solar, often with competitive rates. Many people use their tax credit to make a large payment in year one.
Pros
- • Little or no money down
- • You own the system from day one
- • Keep the full tax credit
- • Monthly payment often less than electric bill savings
- • No prepayment penalty (usually)
Cons
- • Interest increases total cost
- • Requires decent credit (640+)
- • 10-25 year loan term
Typical terms: 5-8% APR, 10-25 year terms, $150-300/month for an 8kW system. Best rates require 720+ credit score.
Home Equity Loan / HELOC
Borrow against your home's equity. Can offer lower rates than solar loans, and interest may be tax-deductible.
Pros
- • Often lower interest rates
- • Interest may be tax-deductible
- • You own the system
- • Keep the solar tax credit
Cons
- • Your home is collateral
- • Requires existing home equity
- • Additional closing costs
- • Takes longer to arrange
Solar Lease / PPA (Not Recommended)
A company owns the system on your property. You pay monthly for the power or lease the equipment. Generally worse economics than ownership.
Pros
- • No upfront cost
- • No maintenance responsibility
Cons
- • You never own the system
- • Company keeps the tax credit
- • Highest total cost over time
- • Complicates selling your home
- • Escalating payments common
Return on Investment by Payment Method
Here's how the numbers work out for a typical $28,000 system over 25 years:
Cash Purchase
Net savings over 25 years
- • Pay $28,000, get $8,400 tax credit
- • Net cost: $19,600
- • Save ~$2,800/year on electricity
- • Payback: ~7 years
Solar Loan (7% APR, 15 years)
Net savings over 25 years
- • Total loan cost: ~$45,000 with interest
- • Tax credit reduces effective cost to ~$36,600
- • Monthly payment: ~$250
- • Payback: ~13 years
Numbers are illustrative. Your actual ROI depends on system size, electricity rates, and loan terms.
Financing FAQ
What's the best way to pay for ground mount solar?
Cash gives you the best return if you have it available—you keep the full tax credit and pay no interest. If financing, a solar loan is the most common choice. Home equity can work if you have it, but avoid leases/PPAs since you never own the system.
How does the federal solar tax credit work?
The Investment Tax Credit lets you deduct 30% of your total solar installation cost from your federal taxes. It's a credit, not a rebate—you reduce what you owe the IRS. If you don't owe enough in the first year, you can carry it forward.
What credit score do I need for a solar loan?
Most solar lenders require 640-680+ credit score, though some work with lower scores at higher rates. The best rates typically require 720+. Your installer can help connect you with lender options that fit your situation.
Can I pay off a solar loan early?
Most solar loans have no prepayment penalty, so you can pay off early without fees. Some people use their tax credit refund to make a large payment in year one, reducing total interest paid.
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