Financing solar panels is a great option for homeowners looking to reduce their energy bills or invest in cleaner and more affordable electricity. The average house can save as much as $65,000 during the lifetime of their solar panel system.
Solar financing comes in many forms, each with their own pros and cons. It is important to decide what you really need, before making any decisions.
Solar Panel Loans With No Interest
A growing number of solar panel loans come with no interest. The local and federal government subsidizes these loans in order to promote the use of renewable energies. They are often more accessible to those with lower credit ratings and they may not penalize borrowers for paying their loan early.
You might also be able to get a loan from your home equity line of credit (HELOC), which uses the value of your home as collateral. This solar loan type is not as easy to obtain as a traditional personal loan. However, it can save you money in the long run by locking in a low interest rate.
Buy Outright
If you're a wealthy person, buying a system of solar panels is the best option. This is because you'll be able to take advantage of any tax incentives and rebates that your area has to offer.
Leases, PPAs
Power purchase agreements (PPAs) are a common solar panel finance option for homeowners. These agreements typically offer a fixed rate for electricity generated by solar panels over a 25-year period, which is 10-30% below the price you would pay for it at your utility. However, this is not a guaranteed deal, as prices can fluctuate each year.
The federal solar investment credit is not available to those who lease or PPA solar panels. It can be a problem if you want to sell the house, but need to move a leased system of solar panels.
Get A Solar Loan
There are several ways to finance your solar panel system. These include loans from credit unions, banks and third-party lenders. Attention should be paid to your annual percentage rates (APR), the origination fee, and your loan's terms. You should compare prices to get the best deal.
Residential Solar Finance Options
Solar loans are a popular way to finance a system. It's available through most banks and credit-unions and is a way to get money without requiring you to invest anything upfront. Personal loans are easier to obtain than traditional HELOCs or home equity loans.