Key Takeaways:
Buying solar panels means you own your solar energy system outright through either a cash purchase or a solar loan. This financing option qualifies you for the federal tax credit and all solar incentives, while eliminating monthly payments to third parties. Ownership provides maximum energy savings, increases home value, and delivers the lowest total cost of ownership solar over your system's lifetime.
San Diego homeowners who buy their solar power system gain complete energy independence and control over their home energy system. Unlike leasing solar or power purchase agreements, ownership means no long-term contracts with solar companies and full access to all federal income tax credit benefits.
Solar installation costs in San Diego average $3.14 per watt as of October 2025. The total cost of ownership of solar depends on your energy consumption and the system size needed to offset your electric bill.
| System Size | Gross Cost | After 30% Federal Tax Credit | Monthly Energy Offset |
| 5 kW | $15,700 | $10,990 | ~400 kWh |
| 7.2 kW | $22,608 | $15,826 | ~600 kWh |
| 10 kW | $31,400 | $21,980 | ~800 kWh |
The federal Investment Tax Credit reduces your initial investment by 30% but expires December 31, 2025. This solar financing benefit applies only to purchased systems—leasing solar panels excludes you from federal tax credit savings. Solar loan options let San Diego homeowners capture this incentive without full cash purchase requirements, making solar panel financing accessible while maintaining ownership benefits and energy bill savings.
The federal Investment Tax Credit (ITC) cuts your solar installation cost by 30%. A typical 7.2 kW solar energy system costs $22,608 but drops to $15,826 after claiming this federal income tax credit, saving $6,782.
EXPIRES December 31, 2025. No extension planned under the Inflation Reduction Act. Only solar panel financing through ownership qualifies—leasing solar or PPAs don't. Third-party owners claim the federal tax credit, not you.
Cash purchase delivers $48,310 in energy savings. Adding a smart home battery increases returns to $121,427 by reducing utility bills during peak demand. Solar loan options generate $13,468 in savings with $0 down, or $132,258 with energy storage.
Leasing solar yields just ~$15,000 over 25 years. PPAs for San Diego homes save ~$20,000. Ownership through solar financing provides 3-6x greater energy independence and electric bill savings.
Owned solar panels increase San Diego County property values by 6.9%—adding $43,725 for a typical 7.2 kW solar power system (2025 Zillow study). Homes with solar energy sell 20% faster, according to NREL research.
Leasing solar adds $0 to home value. Buyers inherit monthly payments instead of owning the solar installation, making leased systems a liability during sales.
A solar lease is a financing option where a third-party company installs and owns solar panels on your property while you pay fixed monthly payments for 20-25 years. This arrangement transfers all solar incentives and the federal tax credit to the leasing company, not you. While leasing solar eliminates upfront costs and includes system operation and maintenance, you forfeit ownership benefits like home value increases and maximum energy savings.
Third-party solar companies own the solar energy system installed on your roof. You pay monthly payments (typically $360/month for a 7.2 kW system) for the contract term of 20-25 years. The leasing company claims all solar incentives, including the 30% federal Investment Tax Credit.
Leasing solar includes lifetime repair service, insurance coverage, and system monitoring at no additional cost. However, you never own the solar installation, can't claim the federal income tax credit, and add $0 to your home value. The lease creates a lien on your property that complicates home sales, as buyers must qualify and agree to assume your monthly payments.
Zero Escalator leases lock in fixed monthly payments that never increase over your 20-25 year contract. This solar financing option provides predictable energy bills but starts with higher initial payments.
Escalator leases increase monthly payments by 2-3% annually, matching typical utility bill inflation. These payment plans offer lower starting costs—attractive if you're selling within 5-10 years—but reduce long-term energy savings as your electric bill savings shrink while lease costs grow. Both lease types prevent you from claiming solar incentives and limit the total cost of ownership, solar benefits compared to buying your solar power system outright.
A Power Purchase Agreement (PPA) is a solar financing option where you pay per kilowatt-hour for solar energy generated on your roof instead of fixed monthly payments. Like leasing solar, a third-party company owns the solar panels and claims all solar incentives, including the federal tax credit. PPAs for San Diego homes offer $0 down installation but limit long-term energy savings compared to ownership.
PPAs charge based on actual solar power production rather than fixed monthly payments. You pay a set rate per kWh of solar energy your system generates—typically around $96/month for a 7.2 kW solar installation, though this escalates annually.
The third-party developer owns and maintains the solar energy system, covering all system operation costs and repairs. Your energy bills fluctuate based on your solar panels' electricity production and performance variations. While this payment plan ties costs directly to solar power output, you forfeit the federal Investment Tax Credit, can't increase home value, and achieve lower total cost of ownership solar savings than buying. Like solar leases, PPAs create liens that complicate property sales and prevent energy independence.
Comparing solar financing options reveals dramatic differences in energy savings, home value, and total cost of ownership. The buy vs lease solar decision impacts your federal tax credit eligibility, monthly payments, and long-term electric bill savings.
Ownership captures the 30% federal Investment Tax Credit—$6,782 savings on a typical solar installation. Energy savings reach $48,310-$132,258 over 25 years, with payback periods of 3.2-8.5 years. Your solar energy system adds $43,725 to your home value.
After payoff, zero monthly payments mean complete energy independence. Solar loan options provide these benefits with $0 down.
Cash purchase requires $22,608 upfront, though solar loan options eliminate this barrier. You handle maintenance (minimal in San Diego County) and need sufficient tax liability to claim the federal income tax credit in year one.
$0 down payment makes solar energy accessible immediately. Third parties handle all system operation, maintenance, and lifetime repair service. Ideal if you can't utilize the federal tax credit or prefer avoiding an initial investment while reducing utility bills.
You forfeit the $6,782 federal tax credit. Energy savings total just $15,000-$20,000 over 25 years—3-6x less than buying solar panels. Leasing solar adds $0 to home value and locks you into 20-25 year monthly payments.
Home sales become complicated: 20% of buyers reject leased systems. Early buyout costs reach $20,000. You never achieve energy independence, as monthly payments continue indefinitely, versus owned solar power systems generating free electricity after payback.
San Diego's NEM 3.0 policy fundamentally changed solar financing economics by slashing export credits by 75%. Energy storage is now essential for maximizing electric bill savings and total cost of ownership solar returns.
SDG&E's Solar Billing Plan (effective April 15, 2023) pays just $0.074/kWh for exported solar energy—down from 40-50¢/kWh under NEM 2.0. This 75% reduction makes selling excess solar power to the grid unprofitable.
A smart home battery captures solar energy for self-consumption instead of low-value exports, maximizing energy savings during peak demand hours when utility bills are highest.
Home Battery Storage Systems increase annual energy savings by 82%. Solar panels alone save $1,858 yearly under NEM 3.0. A solar + battery bundle generates $3,390 annually.
Energy storage cuts payback from 8.5 years to 3.2 years. California's SGIP provides $1,000 per kWh in solar incentives—a 13.5 kWh battery receives $13,500, substantially reducing initial investment when combined with the 30% federal tax credit.
On-peak (4-9 PM): $0.62/kWh—when solar panels stop producing but home energy consumption peaks for HVAC systems and car charging systems.
Super off-peak (12 AM-2 PM): $0.28/kWh—when solar energy production maximizes. Off-peak: $0.38/kWh.
A Home Energy System stores cheap midday solar power and deploys it during expensive evening hours—buying at 28¢, using at 62¢. This time-shifting delivers the 82% energy savings boost that makes battery storage essential for solar financing under NEM 3.0.
Your ideal solar financing depends on homeownership timeline, tax situation, and energy independence goals. Understanding when to buy vs lease solar maximizes your electric bill savings and total cost of ownership solar returns in San Diego County.
Buy solar panels if you're staying in your home 10+ years to capture maximum energy savings through full payback cycles. Ownership makes sense when you can claim the 30% federal Investment Tax Credit—act by December 31, 2025, before this federal income tax credit expires permanently.
Cash purchase or solar loan options deliver $48,310-$132,258 in lifetime energy savings plus $43,725 in home value increases. You need sufficient tax liability to use the federal tax credit in year one, though solar loan rates remain attractive even without immediate credit claims. San Diego's minimal maintenance requirements (occasional cleaning, annual inspections) make system operation responsibilities negligible for homeowners seeking energy independence.
Leasing solar becomes viable if insufficient tax liability prevents claiming the 30% federal tax credit—common for retirees or low-income households. $0 down PPAs for San Diego homes avoid qualification barriers when cash reserves are limited and solar loan options aren't accessible.
Income-based programs like DAC-SASH, CARE, or FERA provide additional electric bill discounts that improve leasing economics. However, even for 5-10 year homeownership timelines, owned solar power systems still deliver superior returns—homes with owned solar energy sell 20% faster at 6.9% price premiums, while leased systems complicate sales and add $0 to property value.
Missing the December 31, 2025, deadline increases net solar installation costs from $15,826 to $22,608 (+43%) for typical 7.2 kW systems. Your payback period extends from 8.5 to 12.2 years, and the 25-year ROI drops from 305% to 184%.
Post-2025, leasing solar becomes relatively more competitive as the buy vs lease solar gap narrows without federal incentives. However, ownership still outperforms third-party financing options: purchased systems generate $41,528 in energy savings over 25 years versus ~$15,000-$20,000 for leases/PPAs. You also retain home value increases and eventual energy independence—benefits that monthly payments to leasing companies never deliver, regardless of solar financing timing.
Where Can San Diego Residents Get Solar Quotes?
Getting multiple solar financing quotes ensures competitive pricing on your solar installation and helps you compare solar loan options, payment plans, and total cost of ownership solar across providers. San Diego homeowners should evaluate at least three installation professionals before committing to this significant home improvement investment.
Online marketplaces like EnergySage connect you with pre-screened solar experts who compete for your business with transparent pricing on solar panels, energy storage, and solar + battery bundles. Request quotes that detail system installation costs, federal tax credit calculations, energy savings projections, and financing options, including cash purchase and solar loan rates.
Verify all contractors hold valid CSLB license numbers—required since September 30, 2019, for solar energy system installations in California. Check references specifically about building permit handling, system operation performance, insurance coverage, and post-installation support. Compare warranty terms for solar panels (typically 25 years), inverters, and any smart home battery components. Quality installation professionals will assess your energy consumption patterns, roof conditions, and integration needs for car charging systems or HVAC system optimization to maximize your electric bill savings and energy independence under San Diego County's NEM 3.0 rules.
Precision General Contracting helps San Diego homeowners navigate solar financing options to capture maximum energy savings before the December 31, 2025, federal tax credit deadline. Our solar experts design custom solar energy systems with smart home battery integration optimized for NEM 3.0, delivering 3.2-year payback periods and $121,427 in lifetime electric bill savings.
We handle everything: building permits, system installation, federal Investment Tax Credit documentation, and SGIP rebate applications. Whether you choose cash purchase or solar loan options, our installation professionals ensure your solar power system maximizes energy independence while adding $43,725 to your home value.
Contact Precision General Contracting today for a free solar consultation and competitive quotes on solar panels, Home Battery Storage Systems, and complete Home Energy System solutions. Don't miss the 30% federal tax credit—let us show you why ownership beats leasing solar for total cost of ownership solar returns in San Diego County.
