Energy Assets vs Liabilities: A Look At Solar Financing

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By Michał Bacia

When discussing solar financing, one very important thing has to be pointed out: solar PV systems are assets. They produce an essential commodity. The generated electricity has a value and can be sold or used to offset your own consumption. Therefore, it constitutes revenue for the owner in cash terms. A car loan payment is a liability (unless you are a professional driver). It only generates costs. A credit card payment is definitely a liability. You are financing purchases that don’t generate income, only costs. They are cash negative.

Photovoltaic solar panels mounted on roof of 2415 Prospect Street in Berkeley, CA - Photo taken by Alfred Twu, released into Public Domain

Installing a solar system is cash positive. After making the loan or lease payments, there is money left from savings from your utility bill or from selling the excess generated energy. The solar systems pay itself off and generates extra cash.

Energy generating assets in a distributed generation model are secure investments with no market risk because you are investing in your own assets. The demand for energy is always there and installing a PV system means there is no middle man (a utility company) who can disrupt your delivery of energy.

In short, financing solar PV is financing assets, not liabilities. Therefore, the operation is cash positive for the borrower. Better cash flow means lower risk, secure repayment, and an opportunity to reinvest. Solar financing is the solution that can provide a boost for the economy, on a local and the global scale.

The above excerpt is from “How to choose the best solar system and financing offer for you,” a solar energy book explaining the ins and outs to the every day user. It is a step-by-step guide showing people how solar is beneficial for them, the process of going solar, and the key aspects of solar financing.

The ebook is available on Amazon. More information, including reviews and a free chapter, can be found here.

Full Disclosure: this post is not sponsored in any way. Sales of Michał’s ebook do not benefit CleanTechnica beyond the broader benefits to society that offers.

About the Author: Michał Bacia is a solar energy project manager and consultant as well as an author. He recently completed 3 solar sites in the UK (20MWp in total) and published this book about solar energy for anyone who uses electricity.

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19 thoughts on “Energy Assets vs Liabilities: A Look At Solar Financing

  • It would be more meaningful if you can show real world numbers on the various installations, along with the mean, median and variances for those who installed solar PV. As it is, these are just speculations without real world data to back them up, and therefore, I have learned nothing much. At least an excerpt about the real world data and a reference to it would make the article better.

    • Thanks for your comment Marion. The solar energy book is a step-by-step guide showing people how solar is beneficial for them, the process of going solar, and the key aspects of solar financing.
      I show people how to calculate the real world numbers, so they can see how solar would work in their specific case.
      This book is not a study or research.

  • This is an interesting premise. I hope the post author gives some more snippets from the original paper or book. I may not buy the book (asset) to gain knowledge (another asset).

    I believe the post is looking at solar in a classical model: purchasing an asset to reduce liabilities (utility bills). Versus the distributed model: purchasing an asset as a capital expenditure to increase overall assets (supporting and enhancing one’s lifestyle). So the return on investment isn’t simply the utility rate reduction. Am I anywhere near the mark?

    More simply put, its the old dichotomy: buy something to save money v. buying something to make more money. Maybe a distributed PV system also increases the overall home value beyond simply the sum of the home and the PV system.

    • Michael,

      2 other snippets have already been published by Cleantechnica, 2 more are coming. All the information about the solar energy book and all 5 snippets and a free chapter are available on

      My point is “financing solar PV is financing assets, not liabilities. Therefore, the operation is cash positive for the borrower”. This means buy something to make more money. You can use the money to offset your liabilities, enhance your lifestyle or reinvest.

  • [Sigh] How often do we need to hear about the same book, with apparently the same basic mis-conception, if not flat-out deception?

    The demand for energy is always there and installing a PV system means there is no middle man (a utility company) who can disrupt your delivery of energy.

    False and false.

    Most PV systems are grid-tied, therefore feeding to the grid and depending on it for backup. Going fully off-grid is a much more expensive proposition.
    This means that a utility can absolutely wreck havoc with PV, at pretty much any time.

    First obviously, grid-tied systems will shut down if the grid goes down. By design.

    Next, and much more importantly, while I agree that solar seems like a reasonably safe investment, claiming it’s risk-free is a lie. A change in the utility pricing structure or policy can completely destroy any benefits.
    Yes, demand for energy sure will remain, but it won’t necessarily in the form that a PV system can directly provide: during daytime, peaking around noon, and much more abundant during spring/summer (depending on latitude).

    If any of those occurs
    – net metering disappears, or is made seasonal only
    – peak rates shift to winter and/or evenings
    – per-kW⋅h cost drops, compensated by higher fixed fees, and/or
    – extra fees are requested for customer-generators
    well… the whole equation changes, possibly making PV uneconomical.

    If utilities couldn’t interfere, let me ask then: why is PV almost non-existent in Florida despite a close-to-ideal climate?

    • Because the systems are 2 times the European price?
      You get tax breaks on PV home installations in GB, guaranteed FITs and export tariff.

      You might just do the math on your Floridian home.

      • I was actually thinking, compared to other other US states (where PV prices are similar), but indeed the contrast is even starker with Europe.

        For Florida, the main reason I believe is utilities pushing against solar, e.g:

        My point was, overall in the US, we see a strong correlation between PV popularity
        and policies in place

        This to me demonstrates how sensitive self-generation is to changing, local policies, completely disproving Michał Bacia’s assertion (or purposely deceitful claim) that such assets are “secure investments with no market risk”.

        • GCO,

          I don’t lie. The fact you don’t understand what other people are saying doesn’t mean they are lying. We already had a similar discussion on one of the previous post on cleantechnica ( when you made similar claims.

          • What you are saying is either purposely misleading, or just mistaken. Call it whatever you want, it’s not truthful.

            This is why I called you on it, and will continue to do so, unless you bring some tangible, convincing facts supporting your claims — just like I did here to disprove them.

            See my other comment.

          • What exactly is misleading or mistaken? What is not truthful?

            You argued with my 2 points:

            1. “Energy generating assets in a distributed generation model are secure investments with no market risk because you are investing in your own assets.” how did you disprove this one? I’m not saying that every single solar pv system has no risks involved. There are a lot of things to consider going solar. This is what the book is all about. It gives information about solar and solar financing and tools that allow for choosing the best solution in each case.

            2. “The demand for energy is always there and installing a PV system means there is no middle man (a utility company) who can disrupt your delivery of energy.”
            How can a utility company disrupt generation for self consumption? You might argue they (utilities, government) can ban solar or tax it so high it’s to expensive. But once installed (on or off grid) what can they do about it?

          • You apparently still don’t get it, so let me spell it again: electricity can’t be stored economically, especially not for long periods.
            Balqon/Winston produces some of the cheapest long-life batteries, yet even used optimally (5000 cycles @50% DoD) they cost the equivalent of ~14 c/kW⋅h.

            Whatever gets generated must be used, sold or forfeited.

            Under our latitudes, a PV system will produce many times more in June than in December. See
            Anyone with loads not matching those characteristics (e.g. with consumption relatively constant during the year, or slightly higher in winter, like myself) will need to sell this surplus in order to help pay for the system.

            That’s where IMHO the main risks are: the price of energy sold back to utilities.
            A significant drop in the value of summer/daytime electricity could turn a PV system into a stranded asset.

            Unlikely you think? It is already the case in Germany: solar itself made day-time electricity prices crater.

            In summary:
            – Market risk is very real, disproving your point 1 (again)
            – Production and demand don’t necessarily align, making your point 2 moot.

          • Look, I don’t know why you got the impression that I’m saying that any kind of solar pv is always wonderful. In general – yes, I think solar is great. But each case is different, this is the very reason why I wrote the book. It helps people to decide, if solar is profitable, what is the payback period, what is the IRR, how to compare offers and how to finance solar.

            You can have a system that generates only for self consumption. All the energy generated during summer is consumed. During winter you buy more from the grid. Do you still have to sell electricity to the grid? Do you need energy storage?

            You are focusing on a very specific case, where the return on investment depends on the price of electricity exported to the grid. I agree that the more energy you sell, the higher the market risk is. But this isn’t self consumption.

            BTW: the example of Germany is very interesting, but it speaks about the wholesale spot market. I assume you do understand the difference between a wholesale market and retail rates.

    • [Sigh] Didn’t we already have a similar discussion? (
      When you use the electricity you generate, there is no market risk, because you are your own client.
      What you are referring to is a regulatory risk. It may be an important factor. There are places in the world right now, when going completely off grid is the best solution from a purely financial point of view. I’m not saying Florida is one of them.
      My book shows people how they can compare offers, costs and benefits of solar and grid electricity. Then they can decide for themselves.
      Oh, FYI not all on grid pv systems need grid electricity to operate. It depends on system design. It’s not difficult or expensive to install a pv system that disconnects from the grid and operates off-grid when the grid goes down.

      • Re on/off-grid systems: all require batteries, and either partitioning of the house loads, or very large inverter(s) to handle all of them, making them much more difficult to integrate into existing wiring, and dramatically more expensive than grid-tied.
        Furthermore, they remain just as exposed to utility policies and pricing anyway.

        When you use the electricity you generate, there is no market risk

        Aha. First, interestingly, you now suddenly feel required to make your statement conditional. An important distinction, don’t you think? It’s actually very hard to use on-site everything a PV system generates, because its output varies greatly not just throughout the day, but (at least outside the tropics) seasonnally.

        No solution exists to economically store e.g. summer excess production for winter, so such surplus would need to be sold (or just forfeited), and then bought back if and when needed.
        Net metering merely sets this sale price to be the same as purchase. Call its IMHO inevitable eventual disappearance a “regulatory risk” or whatever you like, my point stands: PV is not a guaranteed-return, risk-free investment like you keep pretending.
        Both electricity sale and purchase prices will vary during the 30+ years such system will operate, and this can very well make it unprofitable.

        Second, obviously, even a system never exporting energy remains directly vulnerable to future electricity pricing: if within a decade e.g. cheap wind power or even solar itself pushes its value way down, that PV system of yours may never finish paying for itself.

        By purchasing PV, one effectively bets that the value of the electricity it generates, at the times it generates it, will remain high enough long enough to at least recoup his/her investment, and hopefully turn a profit.
        While this is a perfectly fine bet, one that I took myself and I encourage others to, it remains just that: a gamble on future energy prices.
        There is zero guarantee whatsoever that it will pay off, no matter how high the chances seem at the moment.

        Don’t agree? Then tell me, how much will I pay for a kW⋅h consumed at 8pm in 2020, vs how much will I receive for one generated at noon?
        Will you compensate me if actual pricing ends up materially different, making my PV a stranded asset? If not, please explain why; I’m sure it’ll be entertaining…

        • Please read what I actually wrote, not what you think I wrote.

          ” PV is not a guaranteed-return, risk-free investment like you keep pretending”
          When did I say it’s guaranteed-return, risk free?
          Investing into any kind of assets (including a pv system) is all about risk management, not about gambling. Based on historic data, current trends, understanding how utility rates work and knowing that fossil fuels are finite resources you can reasonably assume how electricity prices could evolve. You don’t exactly need to know specific prices for 2020.
          What you are saying is like arguing that unless you know gas prices in 2020 buying a fuel efficient car is a gamble.

          • Buying a PV system is more like pre-paying say 20+ years of gasoline, at an attractive price, say 2 or 3$ a gallon.

            Sounds like a screaming deal, right?
            It’s not.

            Electricity can’t be stored like gasoline. That a PV system is more like a pump flowing for a certain amount of hours every day, and dramatically more in summer than in winter (see my previous comment), and whatever flows must be used or it’s lost.

            The owner of that “pump” expects to just sell the excess gasoline at whatever going price, e.g. 4$/gallon, easily
            repaying his/her investment.

            Say, in 5 years, such systems become so cheap, many more people buy one and start selling their excess production the same way. Summer/daytime prices drop to less than 2$/gallon, causing our initial investor to now lose money.

            This is already happening with solar in Germany; see my previous comment.

          • In your gasoline example:
            The price per gallon you pre-pay depends on a price of a system and electricity generated by the system.

            The point is to choose a pv system that gives you the best “prepaid price per gallon”. The higher the price, the longer you have to wait for payback.

            PV systems are different and can be optimized to achieve different goals. There can be systems that generate only energy you can consume yourself. This means you don’t have to sell anything to the grid. Please see also my other comment.

          • PS: things you wrote, because apparently you can’t recall:

            The solar systems pay itself off and generates extra cash.

            Energy generating assets in a distributed generation model are secure investments with no market risk

            Therefore, the operation is cash positive for the borrower

            And in your previous infomercial,

            [Solar] is a secure, highly profitable investment at zero cost.

            invest nothing now and enjoy secure revenues for the next 100 years

            Never in those two articles you alluded to the possibility of PV carrying any risk, instead (wrongly) assuming that just because it produces “energy” and people need “energy”, it must be all good, forever.
            See my two previous comments, re market risks among other things.

          • Again: In general terms I do think solar is great. I never said there are no risks or things to consider. Each case is different. Things consider are costs of system, energy generation in a specific location, electricity rates, incentives, etc. This is why I wrote the book. So that people can calculate all of that and decide for themselves.

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