If you're evaluating home solar in California, you'll be offered three paths: a Power Purchase Agreement (PPA), a monthly solar loan, or a direct purchase. Each has its place. The problem is that they're often pitched in ways that make side-by-side comparison harder than it needs to be. This guide lays out a practical framework so you can evaluate all three honestly against your own situation.
The three financing paths, in one paragraph each
A PPA is a service agreement. You don't own the panels and you don't finance them. You pay a set rate for every kilowatt-hour the system produces on your roof. That rate is typically lower than your current utility rate and is defined in writing up front. Because you don't own the system, the 30% federal tax credit goes to the system owner, not to you.
A monthly solar loan is a purchase with financing. You own the system from day one, but a lender covers the up-front cost. You pay that lender a fixed monthly amount over a term (commonly 10, 15, 20, or 25 years). Because you own the system, you may claim the 30% federal Investment Tax Credit, subject to IRS rules and your tax situation.
A direct purchase is paying cash or through your own funds. You own the system outright with no financing entity in the picture. Like the loan path, you may claim the ITC and any state-level incentives. You also keep the full long-term economic benefit of the system's production.
Five axes for an honest comparison
When an advisor pitches you a specific plan, pull it back to these five questions. The answers matter more than the marketing on the brochure.
1. Who owns the system?
Under a PPA, the system owner is the financing company (not you and not CaliSolar). Under a loan, you own it the day it turns on. Under direct purchase, you own it outright with no financing entity involved. Ownership drives every other decision on this list.
2. Who gets the tax credit?
The 30% federal Investment Tax Credit flows to the system owner. Under a PPA, that's the financing company. Under a loan or direct purchase, that's you — assuming you have the tax liability to use it. If your tax bill is small, the full 30% may not be fully usable in one year; some of it can be carried forward per current IRS rules. Confirm with a tax advisor.
3. What does the monthly payment look like?
PPA: a per-kWh rate applied to what the system produces (variable in total, fixed in rate). Loan: a fixed monthly dollar amount regardless of production. Direct purchase: no monthly payment — just the up-front cost. The right fit depends on whether you value cash-flow stability more than principal ownership.
4. What happens when you sell the home?
PPA: the agreement transfers to the new homeowner; our team helps coordinate with realtors and title. Loan: you either pay off the remaining balance at closing (commonly from sale proceeds) or, in some cases, the loan transfers to a qualifying buyer. Direct purchase: the system goes with the home as a tangible asset — often a selling point in California markets where solar is in demand.
5. Who is responsible for maintenance?
Under a PPA, monitoring and maintenance are included with the service plan for the term. Under a loan or direct purchase, you own the equipment and are responsible for it, though manufacturer warranties cover most failures for a defined period. Installation work across all three options is performed by Simple Power under CA C-10 License #1,111,652.
Which path fits which homeowner?
PPA tends to fit homeowners who want the lowest possible barrier to going solar, don't want ownership responsibility, and either can't use or don't want the tax credit. It's also the simplest path when the primary goal is locking in predictable energy costs.
The loan tends to fit homeowners who want to own the system and claim the ITC but don't want to (or can't) pay the full cost up front. Qualification is credit-based, and the best terms go to strong credit profiles. The loan is also the path that most closely resembles "owning your power plant" for a monthly payment smaller than most utility bills.
Direct purchase tends to fit homeowners who can cover the system's cost from savings or home equity and want every dollar of return to stay with them. It's typically the strongest long-term ROI path because there are no financing costs or service fees eating into the payback.
The thing nobody pitches: what if none of them fit?
Sometimes none of the three options make financial sense for a specific household — maybe the roof is a poor candidate for solar, maybe the usage profile is too low, maybe a move is on the near horizon. That's a legitimate answer. A good advisor should tell you "this isn't a fit for your situation" when that's the case, rather than pushing a plan anyway. Our consultations are free, and walking away with clarity is a perfectly good outcome.