What Are Your Financing Options?

Solar for your home, business, or agriculture can significantly reduce your electricity bills and decrease your carbon footprint. There are several options available to make your investment in the future easier. 

Residential Solar Financing Options

1. Cash


–  Immediate Savings:  By paying for your solar system upfront, you eliminate monthly payments and start saving on electricity bills right away.

–  Maximum Return on Investment:  Without interest payments or loan fees, you get the most financial benefit from your system.

–  Tax Incentives:  Cash buyers can take full advantage of federal and state tax incentives.

 Things to think about: 

–  High Initial Cost:  Requires a significant upfront payment which might not be feasible for everyone.

2. Solar Loans


–  No Upfront Costs:  Spread the cost of your solar system over several years with manageable monthly payments.

–  Ownership Pros:  You still own the system and can benefit from tax incentives.

–  Flexibility:  Various loan terms and interest rates are available, making it easy to find a plan that suits your budget.

 Things to think about: 

–  Interest Payments:  Depending on the loan, you may end up paying more over time due to interest.

–  Credit Requirements:  Approval may depend on your credit score.

3. Solar Leases


–  No Upfront Costs:  Start saving on your energy bills immediately without any initial investment.

–  Maintenance Included:  The leasing company typically handles maintenance and repairs.

–  Predictable Payments:  Enjoy consistent monthly payments for the duration of the lease.


 Things to think about: 

–  No Ownership:  You do not own the solar system, so you can’t take advantage of tax incentives.

–  Potential Savings:  Monthly savings might be lower compared to owning the system outright.

4. Power Purchase Agreements (PPAs)


–  No Upfront Costs:  Similar to leasing, PPAs allow you to get solar with no initial investment.

–  Pay for What You Use:  Instead of paying for the system, you pay for the power generated at a fixed rate, often lower than your utility rate.

–  Maintenance Included:  The PPA provider handles system maintenance.


 Things to think about: 

–  No Ownership:  The PPA provider owns the system, so you don’t benefit from tax incentives.

–  Long-Term Contract:  PPAs usually involve long-term agreements, which can complicate things if you decide to sell your home.

5. Home Equity Loans and Lines of Credit


–  Lower Interest Rates:  Often, these loans have lower interest rates compared to personal loans because they are secured by your home.

–  Tax Deductible:  Interest on home equity loans may be tax-deductible.

 Things to think about: 

–  Home as Collateral:  Your home secures the loan, so failure to make payments can result in foreclosure.

–  Credit Requirements:  Approval is based on your home equity and creditworthiness.

6. PACE Financing (Property Assessed Clean Energy)


–  No Credit Check:  Approval is based on property value rather than credit score.

–  Repay Through Property Tax Bill:  Payments are made through your property tax bill, which can be passed on to new owners if you sell the house.

 Things to think about: 

–  Higher Interest Rates:  Interest rates might be higher compared to other financing options.

–  Availability:  Not available in all areas.

TruNorth has deep expertise in all of these options.  Call us and we can help find the right solution for you!

Financing Options for Commercial Solar Customers in Minnesota

Transitioning to solar energy with a TruNorth Solar pays for itself quickly and will provide years of clean, green energy and positive financial returns. 

There are a variety of options for Business owners to finance their solar and storage systems.

TruNorth Solar’s Commercial Finance Team specializes in creating custom options tailored to your financial needs.

1. Traditional Power Purchase Agreement (PPA)

A third-party investor purchases the solar power system from TruNorth Solar. The investor owns, operates, and maintains the system for the life of the term. Your business buys the electricity generated by the solar system at a discount to your utility rate. You pay nothing out-of-pocket, never have to worry about the system, and start saving immediately.

  • No up-front costs
  • You only pay for the electricity your solar system produces
  • Terms from 15 – 25 years
  • Your business receives the electricity savings
  • The PPA company owns and maintains the system
  • The PPA company receives the federal and state tax benefits, like the ITC
  • The PPA company receives the state incentives, like Solar Renewable Energy Certificates (SRECs)

2. PACE Financing

PACE financing is a type of financing that allows property owners to finance the cost of energy-efficient improvements to their property through an assessment on their property taxes. PACE financing is available to both residential and commercial property owners.

  • PACE financing is a unique financing option that allows property owners to finance energy-efficient improvements with no upfront costs.
  • PACE assessments are repaid through an annual property tax assessment.
  • PACE financing terms can range from 5 to 30 years.
  • PACE financing is available to both residential and commercial property owners.
  • PACE financing can be used to finance a variety of energy-efficient improvements, such as solar panels, insulation, and HVAC systems.

3. Purchase Loans

You can borrow money from a bank. Loans can be secured by your real estate or unsecured. The TruNorth Solar Commercial Finance Team can help you secure a loan to finance your solar project.

  • Your business will own your solar system
  • You immediately save on electricity
  • No up-front costs
  • Your business receives the Federal Investment Tax Credit (ITC) and accelerated depreciation
  • Your business receives all state incentives like Solar Renewable Energy Certificates (SRECs)

4. Operating Lease

With an Operating lease for a commercial solar system, a financing company purchases the solar system from TruNorth Solar and then leases it to the commercial customer. The lessor receives the tax benefits including depreciation and the Federal Investment Tax Credit (ITC).

  • No upfront costs
  • Simple monthly payments, usually fixed
  • Terms from 6 – 10 years
  • Buy-out at the end of the lease term is usually the fair market value
  • Your business receives the electricity savings
  • Your business may receive the state incentives
  • Leasing company receives the federal and state tax benefits
  • Preserves existing lines of credit
  • A great way to finance solar when your business can’t use the depreciation or the ITC

5. Capital Lease

Capital Leases are similar to loans. You can capitalize on all tax and depreciation benefits that come with solar. Monthly payments are typically higher than an operating lease option because the buyout at the end of the term is usually just $1.

  • No up-front costs
  • Fixed monthly payment
  • Terms from 5 – 15 years
  • Your business receives the tax benefits like the Federal Investment Tax Credit (ITC)
  • Your business receives the state incentives like SRECs
  • Your business receives the electricity savings
  • Equipment is capitalized as an asset on your balance sheet
  • Depreciate the system to reduce taxable income
  • Buy-out at the end of the lease term usually $1

Financing Options for Agricultural Solar Customers in Minnesota

Many agricultural operations in Minnesota are considering solar installations to reduce energy costs, increase sustainability, and boost profits.  TruNorth Solar’s commercial clients in Minnesota can leverage our extensive financial relationships with banks and other institutions to find the best type of agricultural solar funding.

Here are some financing options for you to consider:

Grants and Incentives

1.Rural Energy for America Program (REAP)

  • Provides grants and loan guarantees to agricultural producers and rural small businesses for renewable energy systems and energy efficiency improvements.
  • Grants cover up to 25% of project costs, with combined grants and loans covering up to 75%.

2. Federal Investment Tax Credit (ITC)

  • Allows deduction of 26% of solar installation costs from federal taxes.
  • Applicable to both residential and commercial systems.

Loan Programs

1. Minnesota PACE Program

  • Enables property owners to finance energy improvements through property assessments.
  • PACE financing is repaid via property taxes, offering low-interest, long-term financing.

2. AgBMP Loan Program

Offers low-interest loans to farmers for projects that improve water quality, including renewable energy installations.

3. Commercial Loans and Leasing Options

Financial institutions offer commercial loans and leasing options for solar projects.