The expiration of the 30% federal residential solar tax credit at the end of 2025 has changed the landscape for homeowners interested in solar energy. However, going solar remains accessible, especially for Bakersfield residents, thanks to evolving financing options that help bridge the affordability gap.
The Shift in Solar Financing
With the federal tax credit no longer available for directly purchased residential solar systems, upfront costs have increased modestly. According to recent data, median solar prices rose about 3.2% in early 2026, partly due to higher labor costs and supply chain factors. Despite this, the demand for solar remains strong, driven by rising utility rates in California and homeowners’ desire to reduce energy bills and gain energy independence.
Understanding Third-Party Ownership (TPO)
One of the most significant developments following the tax credit expiration is the rapid growth of third-party ownership (TPO) financing. TPO allows homeowners to install solar systems without the full upfront cost by entering into agreements such as leases or power purchase agreements (PPAs) with a third party that owns and maintains the system.
Unlike direct ownership, TPO projects can still qualify for federal commercial tax incentives through 2027, which helps lower overall costs. This model is gaining traction nationally and is becoming more available in markets like Bakersfield.
Comparing Leases, PPAs, and Loans
Homeowners in Bakersfield can consider several financing paths:
- Solar Loans: Provide ownership with monthly payments but no federal tax credit, often with interest rates around 7.5% and shorter loan terms than before.
- Leases: Pay a fixed monthly fee to use the solar system without owning it. Pre-paid leases can offer lower effective costs compared to cash purchases.
- Power Purchase Agreements (PPAs): Pay for the electricity generated by the solar system at a set rate. Pre-paid PPAs have shown to be significantly cheaper per kilowatt-hour than cash purchases.
Pre-paid PPAs and leases currently offer some of the most competitive costs per kilowatt-hour, making solar more affordable despite the absence of the federal tax credit. However, cash purchases still tend to offer the greatest long-term savings for those who can afford the upfront investment.
Local Relevance for Kern County
Bakersfield homeowners face rising electricity rates, which increases the value of solar energy. California’s utility rates are among the highest in the nation, making solar a practical way to manage and reduce monthly energy expenses. Additionally, local installers are increasingly offering TPO options to meet the demand for flexible financing.
While TPO availability can vary, many Bakersfield providers are adapting their offerings to include leases and PPAs, helping residents access solar and battery storage systems without large upfront costs.
How to Evaluate Your Options
When considering solar financing, Bakersfield homeowners should:
- Compare quotes from multiple local installers to understand pricing and financing options.
- Ask about third-party ownership availability and terms, including lease and PPA details.
- Evaluate your long-term energy goals and financial situation to determine if ownership or TPO is best for you.
- Consider adding battery storage to maximize savings and energy resilience, especially as interest in storage continues to grow despite its higher upfront cost.
Next Steps to Get Started
Even without the federal tax credit, solar remains a viable investment for Bakersfield homeowners. Exploring third-party ownership and other financing options can make solar and storage more affordable and accessible than ever.
Ready to Explore Your Solar Savings?
Schedule a free solar savings evaluation with Encharge Energy today. Our local experts will help you understand the best financing options available in Bakersfield and design a solar solution tailored to your home and budget. Take control of your energy future and start saving on your electricity bills.