By now, you are well-versed in the benefits offered by solar power. Save money, clean energy, and environmentally friendly options, and more are some most appealing reasons to go solar. However, there still may be something holding you back from making a move and purchasing the solar panels you have heard so much about.
For many people, the factor that causes them to hesitate is the upfront cost of a solar system. With all the different elements, including the panels, solar battery, storage system, and more, there’s no question that the cost can be high and somewhat intimidating for some home or business owners.
While the initial cost can be high, there are financing options available to help ensure you can cover the costs and avoid being burdened. Keep reading to learn about some top solar financing options available.
With a solar lease, you are “renting” a system from a third-party company or owner. This option gives you the benefits of solar with minimal out-of-pocket cost. Signing a lease agreement means you pay a monthly fee for the equipment being used. Usually, this is offered at a lower rate than what you would pay for electricity.
The third-party owner will have the solar panels installed and handle the initial engineering, design, and permitting costs. While it is rare, the system owner will be responsible for repairs and maintenance if one of your cells becomes unusable or defective.
Usually, the savings provided by a solar lease will range between 10 and 30% of your typical electric bill. Also, since you aren’t the owner of the system, the owner will take advantage of the incentives and tax credits offered.
Another option is a solar PPA or power purchase agreement. With this, you sign an agreement with a third-party solar panel owner to purchase the energy produced by the panels rather than renting the equipment.
With this option, you will go solar by financing using a PPA. The system will then be installed with no down payment required. At the end of the billing period, rather than paying your electric bill to the utility company, you pay your solar provider for the electricity the system provided. This rate will be determined when you sign the PPA contract. Excess energy that was not covered by the system will be paid to your utility company. This helps you save money because you will have a smaller electric bill.
Unlike a solar lease where you agree to “rent” your solar equipment when you get a loan, it means you own the solar equipment that will generate solar power for your home. This requires you to make payments each month until the equipment and service are fully paid through recurring payments.
How quickly and how much money you want to save is your decision.
Usually, solar loan providers will offer several interest rates and payment periods you can choose from. This will allow you to decide what works for you. The payment periods with solar loans usually range between five and 20 years. Also, you can find loan options with interest rates of zero percent if you qualify. With a solar loan, you will probably be able to save between two and five times what you would with a solar lease. You can also find solar loans that are unsecured or secured. You have to find a loan provider that is right for you and that meets your terms and needs.
If you are interested in solar power, then considering one of the financing options here will help you pay for the initial cost and get the benefits that solar offers. Being informed is one of the best ways to ensure that you get the desired results and afford this renewable energy source for your home or business. Keep in mind, the solar loan or lease provider you choose will impact what you pay.