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We once had an elderly neighbor who grew his own vegetables and flowers and bartered any extras with friends who did the same with fruit.

The man did everything he could to reduce his monthly living expenses, and even researched the possibilities of a solar-powered home for more than two years. He eventually gave up on the solar idea, stating, “I’ll be dead and gone before I stand a chance of breaking even.”

Powering a home with solar energy is a concept some consumers would like to consider but affording a workable system has always been the major drawback for many households.

Recently credit unions and other lending institutions have increased their solar programs, with some offering 100 percent financing on approved products and installations. Coupled with attractive federal and state incentives and a lower cost of materials, most homeowners can pay off a residential solar system in six years with little cash out of pocket.

The federal incentive is a 30 percent tax credit in the first year after installing solar that currently runs through 2016. The annual state credit depends on how much solar is produced by an individual home and is capped at $5,000.

For example, the Puget Sound Cooperative Credit Union is offering 100 percent financing on its Washington State “simple solar” program, which combines state-made modules and inverters with local installation. The program is tied to a 15-year loan at a fixed rate of 4.49 percent. There is no prepayment penalty.

“The incentives have created an environment that’s unbelievably favorable for the solar consumer,” said Tim Bailey, founder and principal, of Poulsbo-based Blue Frog Solar. “We are trying to raise awareness of that fact. The other major difference is that a few years ago, we didn’t have access to the 100 percent financing. Now, you and your neighbors can ‘go solar’ not just because it makes good environmental sense, but because it makes huge financial sense.”

Shannon Ellis-Brock, chief operating officer of Puget Sound Cooperative Credit Union, said some owners take the federal tax credit, deposit it in their credit union account and fund the loan with the proceeds.

“We do have people who take a short-term loan and pay it off quickly because there is no penalty to do so,” Ellis-Brock said. “But the 100 percent financing is attractive to most people especially because they don’t have to come out of pocket with a lot of money to afford it.”

The federal tax credit is not immediate. It is paid, or credited, in the tax year that the system is installed. For example, the average system in Washington State costs approximately $25,000. If the system was installed in 2014, a tax credit in the amount of $7,500 would be filed with your federal return, typically due April 15, 2015.

With 100 percent financing, a monthly payment of approximately $191 would be due until the tax credit check is received. Then, the homeowner could pull from the deposited tax credit cash to cover the monthly loan payments.

“The federal incentive currently runs through 2016,” Bailey said. “It’s not so much a matter of it being critical to our business plan, as it is to creating a particularly advantageous climate for solar investment by Washington homeowners right now.”

After the system is installed, the homeowner has two meters: the main meter (the service meter) and the new meter that will connect directly to the solar array (the production meter). The production meter will measure only the amount of power that a home produces from the solar array. After the electricity being produced runs through the production meter, it will then run through the service meter.

At this point, if the home is consuming less than the amount produced, the meter will actually run backwards. If the home consumes more than is being produced, the meter will acknowledge the amount being produced and only run forward at the net amount of consumption.

The result is that homes on the “Simple Solar” plan are paid 54 cents for every kilowatt hour produced. Then the home gets to use that same power to reduce the measured power consumption at the service meter.

Solar components are warrantied for 25 years, so owners have at least 20 years of production after the incentives expire. And, the price of electricity is certain to increase.

Reeves Clippard, founder and CEO of A&R Solar, a company that specializes in residential solar installation, said solar panels have become more in demand by new construction builders and developers after years of an existing-home clientele.

“The price of modules has come down 60 percent in the last two years making solar incredibly affordable,” Clippard said. “People are also discovering that their homes do not have to be perfectly sited for solar to make sense. South-facing homes are often perfect, but that’s not always what you need. It depends on where you are and what is around you.”