Free solar, loan, or cash in DC: the honest comparison
Most DC homeowners get pitched one solar option by whoever calls them. The free PPA salesperson doesn't mention ownership. The loan salesperson doesn't mention dealer fees. Nobody mentions what happens if their company goes out of business. Here's the version none of them want you to read.
Which Solar Option Is Best?
Compare all 3 options with real numbers. Get personalized analysis from DC experts.
In Washington DC in 2026, there are three real ways to go solar: a free Power Purchase Agreement, a solar loan, or an outright cash purchase. Each has genuine advantages — and real risks. Understanding all three before you sign anything is the most important thing you can do.
Free PPA — no cost, no ownership
A Power Purchase Agreement means a solar company installs panels on your roof for free. You pay nothing upfront and nothing monthly. The company owns the system, handles all maintenance, and earns SREC income. You get the electricity savings — typically $150–$220 per month at current Pepco rates of 23.9¢/kWh.
✓ Benefits
- Zero upfront cost, zero monthly payment
- No debt, no impact on your credit
- Maintenance and repairs are the company's responsibility
- System is insured by the solar company — you do not need to add it to your homeowner's insurance policy
- Unaffected by the federal tax credit expiration — the solar company claims the commercial ITC, your deal doesn't change
- Savings start from day one
✗ Risks
- You don't own the system and collect no SREC income
- Long contract — typically 20–25 years. Read termination clauses carefully before signing
- If the provider goes out of business, service continuity depends on whether they carry insurance — most do not. A few do. Always ask before signing
Before signing any PPA, ask specifically: "Do you carry service continuity insurance?" — meaning if your company closes, a successor is contractually obligated to maintain my system. A reputable provider will have a clear answer. If they don't, that tells you something.
Solar loan — financed ownership
A solar loan lets you own the system. You finance the purchase, pay it off over 10–25 years, and collect SREC income along the way. At current DC rates of ~$360 per credit, a 10kW system generates roughly $3,600–$4,000 per year in SREC income.
✓ Benefits
- You own the system outright once paid off
- SREC income goes directly to you
- No long-term contract with a third party
✗ Risks
- Monthly payment for 10–25 years
- Dealer fees can inflate your loan by up to 50% — see below
- Federal 30% tax credit expired December 2025 — $0 for loan buyers in 2026
- If installer goes out of business, labor warranties are gone — you find and pay for service yourself with no safety net
- You must add the system to your homeowner's insurance policy
- SREC market risk is yours to carry
Every interest rate on a solar loan tells a story about hidden dealer fees:
- 1.99%–2.99% — massive hidden dealer fee, often inflating your loan by up to 50% above the cash price
- ~8.5% — smaller dealer fee, but still a fee baked in
- 9.99% — typically no dealer fee; you finance only the actual system cost
If your system costs $26,000 in cash but you're being offered a $39,000 loan, the $13,000 difference is the dealer fee — and you pay interest on top of that for 20–25 years.
⚠ Always ask your installer for the cash price. The gap between the cash price and the loan amount is what you're paying in hidden fees — plus interest on those fees for the life of the loan.
Cash purchase — the cleanest option
If you have the money, buying your system outright is the simplest and most financially efficient path. No dealer fees. No interest. No monthly payment. No third-party contract. You own the panels from day one and collect all SREC income.
✓ Benefits
- No dealer fees, no interest — you pay only the actual cost of the system
- Full SREC income goes directly to you from day one
- No debt, no monthly payment
- No long-term contract with any third party
- Equipment manufacturer warranties protect you regardless of installer status
✗ Risks
- Significant upfront cost — a typical 10kW DC system runs $25,000–$35,000
- Federal 30% tax credit expired December 2025 — $0 in 2026
- If installer goes out of business, labor warranties are gone — same situation as a loan
- You must add the system to your homeowner's insurance policy
- SREC market risk is yours to carry
The SREC warning — loan and cash buyers need to read this
If you own your system — whether via loan or cash — your financial return depends partly on SREC income. Most solar salespeople show you today's SREC prices and project them forward as if they'll stay flat. They won't.
DC SRECs started at $500 per credit when the program launched. Today they trade around $360. The SACP ceiling dropped from $500 to $300 in 2026 and is scheduled to keep declining. SRECs are projected to stabilize around $200–$250 by end of decade. Build your financial case on those conservative numbers — not today's price.
There's also a political dimension worth knowing. In 2023, a DC budget proposal changed the city's electricity contract with WGL Energy to stop purchasing SRECs entirely and instead pay ACP penalty fines — a move that would have pulled one of the largest buyers from the DC SREC market and likely crashed prices overnight. The DC Council fought back and blocked it. But it was a clear reminder: DC's SREC market exists because of policy decisions, and those decisions can change. You can read about it here: Washington City Paper → and Honeydew Energy Advisors →
With a free PPA, SREC market risk belongs entirely to the solar company. With a loan or cash purchase, it's yours. Factor in declining SREC values — not today's prices — when you run your numbers.
Side by side comparison
| Factor | Free PPA | Solar Loan | Cash Purchase |
|---|---|---|---|
| Upfront cost | $0 | $0 (financed) | $25,000–$35,000 |
| Monthly payment | $0 | Yes, 10–25 years | $0 |
| SREC income | Solar company's | Yours | Yours |
| Federal tax credit | Solar company claims it | Gone — expired Dec 2025 | Gone — expired Dec 2025 |
| Dealer fee risk | None | Up to 50% markup | None |
| SREC market risk | Solar company's | Yours | Yours |
| Maintenance | Solar company handles it | Yours if installer folds | Yours if installer folds |
| Insurance | Covered by solar company | Must add to homeowner's policy | Must add to homeowner's policy |
| Service if company closes | Some carry insurance — ask | No safety net | No safety net |
| Ownership | No | Yes (after payoff) | Yes, from day one |
Who should choose what
Free PPA — best for most DC homeowners in 2026
Zero cost, zero debt, savings from day one. The federal tax credit expiration doesn't affect you. SREC market risk is the company's problem, not yours. System insurance is handled for you. If you want to lower your Pepco bill with zero financial complexity, a PPA is the right choice. Just make sure to ask about service continuity insurance before you sign.
Solar loan — consider carefully
Only makes sense if you can get a truly no-dealer-fee product (9.99% options exist), you've run the SREC math honestly using declining values out to 2030, and you're comfortable being fully responsible for the system long-term. The federal tax credit is gone, so the financial case for a loan is weaker in 2026 than it has ever been.
Cash purchase — best financial outcome if you have the funds
No fees, no interest, no monthly payment, full SREC income from day one. The cleanest option financially for homeowners who have the capital. Make sure your installer has a strong track record — your labor warranty depends on them staying in business. And add the system to your homeowner's insurance policy from the day it's installed.
Common questions
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