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NuWatt designs, installs, and manages solar, battery, heat pump, and EV charger systems across 9 states. One company, one warranty, one point of contact.
Get a Free QuoteThe 30% federal residential tax credit (Section 25D) is gone as of January 1, 2026. That changes the math on every financing option. Here is a complete, honest comparison — cash, loans, HELOC, home equity, lease, PPA, and Propel — with real Texas numbers.
Section 25D Residential ITC — EXPIRED
The One Big Beautiful Budget Act (signed July 4, 2025) ended the 30% homeowner solar tax credit effective December 31, 2025. Any installer still quoting a "30% federal credit" for cash or loan purchases is misleading you. Lease and PPA customers may still benefit via Section 48/48E — claimed by the third-party owner, not you.
A $30,000 TX solar system previously yielded a $9,000 federal credit, reducing net cost to $21,000. In 2026, that same system costs $30,000 net — a 43% higher effective price for cash/loan buyers.
Payback periods stretch from 5–6 years to 7–9 years. But Texas electricity rates have also climbed — the long-term economics still favor solar strongly, just with a longer runway.
Lease and PPA pricing is increasingly competitive because those third-party financing companies still capture the Section 48/48E commercial ITC (30%+) and pass savings to customers.
Eight options, one table. Rates, terms, ownership status, and who each option is best for.
| Option | Rate | Term | Upfront | Own System? | Best For |
|---|---|---|---|---|---|
Cash Purchase | N/A | N/A | $25,000–$35,000 | Maximum savings, fastest payback | |
Solar Loan | 5–9% APR | 10–25 yr | $0 | Homeowners with good credit, no cash | |
HELOC | 7–9% variable | 10–20 yr | $0 | Homeowners with equity, flexible draw | |
Home Equity Loan | 6–8% fixed | 5–30 yr | $0 | Fixed-rate preference, large equity base | |
Cash-Out Refinance | 6–7% | 30 yr | $0 | Refinancing anyway, low current rate homeowners | |
Solar Lease | Fixed monthly | 20–25 yr | $0 | Simplicity, no maintenance responsibility | |
Power Purchase Agreement (PPA) | Per kWh produced | 20–25 yr | $0 | Pay-as-you-go, no performance risk | |
Propel (Concert Loan) | 8.99% APR | 25 yr | $0 | TX homeowners, $0 dealer fee, FEOC panels |
Rates as of Q1 2026. Section 25D ITC = $0 for homeowners. Lease/PPA third-party owners may capture Section 48/48E commercial ITC.
Paying cash for solar in Texas still delivers the highest 25-year return — even without the ITC. A typical 10 kW system at $3.20/W = $32,000. With Texas electricity rates at $0.14–0.17/kWh and buyback credits from Oncor, Austin Energy, or CPS, most cash buyers save $1,800–$2,400/year. Payback: 7–9 years. After that, 15–17 years of near-free power adds up to $45,000–$65,000 in total savings over 25 years.
Advantages
Considerations
Solar-specific loans from GoodLeap, Mosaic, Dividend, and Sunlight are the most common financing path for Texas homeowners without large cash reserves. Key 2026 warning: Most solar loans embed a dealer fee of 10–25% into the system price. A $30,000 system may actually be priced at $33,000–$37,500 to cover the fee. Ask your installer to break out the system cost vs. the finance fee explicitly.
| Lender | Rates | Terms | Notes |
|---|---|---|---|
| GoodLeap | 5.99–8.99% | 10, 15, 20, 25 yr | Largest solar lender by volume. Fast decisions. Dealer fee 10–15%. |
| Mosaic | 6.49–9.99% | 10, 12, 20, 25 yr | Strong for installers. Product variety. Dealer fee 8–12%. |
| Dividend Finance | 5.49–8.49% | 10, 15, 20, 25 yr | Lower rates but stricter approval. Dealer fee 8–12%. |
| Sunlight Financial | 6.29–9.49% | 10, 15, 20 yr | Good for mid-range credit. Integrated installer portal. |
| Propel (NuWatt) | 8.99% | 25 yr | $0 dealer fee. TX only. 660 FICO. FEOC Silfab required. |
A Home Equity Line of Credit uses your home as collateral. Current Texas HELOC rates run 7–9% variable APR — similar to solar loans, but with two key advantages. First, no dealer fee is embedded. Second, interest on a HELOC used for home improvements (like solar) may be tax-deductible if you itemize, under IRC Section 163(h). That deductibility can effectively reduce your true rate to 5–6% for homeowners in the 22–24% federal bracket.
HELOC Draw Period Flexibility
Unlike a lump-sum loan, a HELOC lets you draw funds as work is completed — useful if adding battery storage in a separate phase. Draw period is typically 10 years, repayment period 10–20 years. Minimum draw limits vary by lender ($10,000–$25,000).
This is the sleeper pick for 2026. Because the third-party financing company owns the system, they — not you — claim the Section 48/48E commercial ITC. That credit can be 30–50% depending on FEOC panel sourcing, energy community location, and income adders. Companies pass these savings to customers in the form of lower monthly lease payments or lower per-kWh PPA rates.
Solar Lease
Power Purchase Agreement (PPA)
Section 48/48E deadline: Projects beginning construction before July 4, 2026 qualify. Third-party owners structuring projects before this date can lock in the ITC for the full 20–25 year contract period.
Propel combines a Concert Loan with a Prepaid Energy Service Agreement (ESA). It is the only option on this list with a $0 dealer fee — competing solar loans embed 10–25% dealer markup in system prices. Propel is exclusive to Texas through NuWatt.
FEOC requirement: Propel requires Silfab 440W panels — which are Foreign Entity of Concern (FEOC) compliant. This is a feature, not a limitation: FEOC compliance positions your system for maximum Section 48/48E adders if you add a Propel commercial component, and ensures the panels meet Buy America guidelines.
If your situation:
You have $25K+ in savings and plan to stay 10+ years
Fastest payback (7–9 years), highest 25-year ROI ($45K–65K savings)
If your situation:
750+ FICO, no large savings, plan to stay 7+ years
Qualify for best rates (5–6%). Own the system immediately with $0 down.
If your situation:
Significant home equity, 700+ FICO, prefer lower rates
No dealer fee, potential tax-deductible interest. Lower total cost vs solar loan.
If your situation:
Already planning to refinance your mortgage
Roll solar into your refi. One payment, no additional loan.
If your situation:
Want $0 down + ownership + no dealer fee in TX
8.99% APR, $0 dealer fee, 660 FICO minimum. Requires FEOC-compliant Silfab panels.
If your situation:
Low credit, renting near-term, or want simplicity
No credit requirement, third-party captures Section 48/48E ITC. You don't own — but bills drop.
If you are in Oncor territory (DFW, West TX), the Take a Load Off Texas program pays up to $9,000 for solar + battery. This rebate applies regardless of whether you pay cash, use a loan, or use Propel. It does not apply to leases or PPAs (since you don't own the system). This rebate dramatically improves ROI for ownership-based financing.
See Oncor Rebate Details →Texas exempts solar equipment from sales tax (HB 1783) and from property tax increases due to added value from solar (Property Code §11.27). These benefits apply to owned systems only (cash, loan, HELOC, or Propel). For lease/PPA, the financing company's ownership means they — not you — receive these exemptions.
TX Tax Exemption Guide →Texas solar buyback (net metering equivalent) rates vary by utility. Oncor buyback: ~$0.05–0.08/kWh. Austin Energy: $0.097/kWh guaranteed. CPS Energy: $0.09/kWh. A 10 kW system exporting 4,000 kWh/year earns $200–$390/year in buyback credits — improving payback by 6–12 months over pure self-consumption savings.
TX Buyback Rates Guide →2025–2026 steel and aluminum tariffs have increased solar panel and racking costs 8–15%. Cash and loan buyers see these higher prices directly. Lease/PPA companies have hedged equipment already — another advantage of third-party ownership in 2026. Ask installers for a tariff-adjusted quote showing today's equipment costs, not pre-tariff pricing.
Tariff Impact on TX Solar Costs →No. The Section 25D residential solar tax credit expired on December 31, 2025 under the One Big Beautiful Budget Act. Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits in 2026. However, if you use a lease or PPA, the third-party system owner can still claim Section 48/48E commercial ITC (30%+) — which is why lease and PPA pricing often looks favorable post-ITC.
Propel is NuWatt's exclusive TX financing product combining a Concert Loan with a Prepaid Energy Service Agreement (ESA). Key advantages: $0 dealer fee (traditional solar loans charge 10–25%), 8.99% APR, 25-year term, and 660 FICO minimum. It requires FEOC-compliant Silfab panels and is available in Texas. Loan range is $10,000–$135,000.
HELOC interest can be deductible if the funds are used for substantial home improvements — which solar panels generally qualify as under IRS guidelines. You must itemize deductions and the loan must be secured by the home. Consult a tax professional, as individual circumstances vary. This deductibility makes HELOC one of the lower after-tax-cost options for homeowners with sufficient equity.
Most Texas homeowners with good credit (700+) can access solar loans at 6–8% APR. Rates below 6% typically involve higher dealer fees baked into the loan. With Propel, the APR is 8.99% but there is $0 dealer fee — making the all-in cost competitive with or better than lower-rate loans that embed a 10–20% dealer markup in the system price.
If you have 20%+ equity in your home and a stable income, a HELOC or home equity loan often beats a solar loan on total cost. No dealer fee, potentially deductible interest, and rates from 6–8%. The downside is that approval takes 3–6 weeks vs. same-day for solar loans. If speed matters or you lack equity, a solar loan or Propel is faster and simpler.
When you lease a solar system or sign a PPA, the financing company (third-party owner) claims Section 48/48E commercial ITC — which can be 30%, 40%, or even 50% depending on FEOC compliance, energy community location, and low-income adders. The deadline for projects beginning construction is July 4, 2026. This is why leases and PPAs offer lower prices than the pre-ITC era despite homeowners not owning the system.
Without the federal 25D tax credit, cash payback in Texas runs 7–9 years for most systems, up from 5–6 years when the credit was active. A typical 10 kW system at $3.20/W costs $32,000 and saves $1,800–$2,400/year on a $0.15/kWh average rate. After payback, you have 15–17 years of near-free power plus strong buyback revenue if on an Oncor, Austin Energy, or CPS energy buyback plan.
Yes. Propel is a Concert Loan — it appears on your credit report as an installment loan, similar to a personal or auto loan. The FEOC-compliant ESA component is a separate service agreement. Both together form the Propel product. 660 FICO minimum is required at application.
NuWatt provides transparent pricing — we show you the system cost, any financing fee, and your real payback period. No bait-and-switch on ITC credits that no longer exist.
Questions? Call us directly — no AI phone trees, no runaround.
