SolarCity Corp., the San Francisco Bay Area company that helped boost residential solar power adoption through leases, said it now will allow customers to buy systems with a loan it offers -- an option the firm says can be cheaper than a lease.
The San Mateo company started offering the loans Wednesday in eight states, including California.
Solar power has gained popularity in recent years as companies offered leases for rooftop systems that often are too pricey for home owners to purchase upfront. The price of a system for a 2,000-square-foot house runs about $30,000.
SolarCity is the latest company to give consumers the option of a loan. The 30-year loan, known as MyPower, comes with an interest rate as low as 4.5%, the company said.
But instead of paying a typical principal and interest payment, borrowers pay back the loan through monthly energy bills, based on how much power the system produces, SolarCity said.
Because borrowers own the system, they can receive a federal tax credit that previously went to solar companies in lease agreements.
By using that money to pay down the loan, borrowers can reap lower energy bills than with SolarCity's leases or similar agreements, Chief Executive Lyndon Rive said.
The loans also are available in Arizona, Colorado, Connecticut, Hawaii, Massachusetts, New York and New Jersey.