Different Ways of Financing Your Project
There are many ways to design and finance renewable energy projects. Each project needs to be evaluated according to your particular situation.
The following examples illustrate the basic economics of various renewable
We realize, however, that the initial cost of a renewable energy system may still be
substantial. Fortunately, there are a variety of financing options available that take
advantage of tax incentives, further improving the economics of your system, to the point
where it will pay for itself in a relatively short time.
The following are brief descriptions of financing methods that will reduce the cost of
your renewable energy system, through income tax benefits.
Home Equity Loan
As a homeowner, you can use the equity in your property to finance the purchase of your
renewable energy project. The interest paid on the home equity loan is deductible on your
Leasing a system provides other tax benefits, including depreciation and the 10 percent
Renewable Energy Tax Credit. Leasing companies can transfer all or part of these benefits
to the homeowner.
As a business owner, you can deduct the interest, depreciate the system using MACRS
over 5 years, and use the 10 percent Renewable Energy Tax Credit. You may also elect to
expense the system as Section 179 property.