In general there are 2 main categories for how you go solar, regardless of whether or not it’s with a neighborhood solar co-op:
You own the system (purchase)
Very straightforward. When you buy a system you own it, along with all of the incentives and attributes that normally come with a solar installation (federal tax credit, any state grants, SRECs, etc). You don’t pay a monthly bill to any company, but instead you put up all the money up front. You still pay a bill to Pepco, but it will be significantly lower each month.
You can also finance a purchased system through a bank or other loan. You would still own the system and all the incentives, but instead of paying a solar company you would pay off your loan each month.
Owning your system is a good option if you have the money to pay for it upfront or are comfortable taking on debt to finance the system. This will provide the greatest long-term financial benefits.
A company owns the system (lease or power purchase agreement [PPA])
In this arrangement you would pay both Pepco and the solar company, but your combined bills should be less than your Pepco bills from before you went solar. You likely put little or no money down for the system, and instead you pay for either: a) the energy over time (a PPA) or b) for having the system on your roof and the energy is free (a lease).
Since you haven’t put much (or any) money down and you don’t own the system, you won’t receive any of the solar incentives. Instead the solar company keeps all of these, and then passes on those savings to you through lower electricity/lease payments.
This is a good option if you don’t have the money upfront and don’t want to take on debt. While the long-term benefits are smaller than owning the system, it’s still a good way to go solar because you start saving money immediately. The company usually also takes on any maintenance issues that may arise during the term of the agreement (usually around 20 years), though these are few/rare outside of an inverter replacement in year 10-15. This arrangement may also make moving out of your home more complicated than if you own your system, though, because the new homeowner may have to take on your lease/PPA, or have the system removed.
This is a brief overview, but if you really want to get into it the DOE and CESA have a great resource on financing (though it’s long).
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