Jessica PirroMarch 11, 20208521
Even though the cost of solar panels has significantly decreased in the past few years, their cost of getting a solar panel installation is still considered a pretty costly investment. That’s not saying the solar panel installation isn’t going to be worth the cost, because it will be, but some homeowners aren’t going to be able to afford the upfront cost of solar panels.
Luckily, there are a few different solar financing options that homeowners can choose from. Homeowners will have the option of entering a solar lease, which means that they will be able to rent the solar power system from someone. Entering into a solar lease will have both pros and cons, but one of the biggest cons is going to be that you aren’t going to own the solar power system, which also means that you aren’t going to be able to benefit from any of the benefits that are geared towards a solar power systems owner.
Another solar financing option (one that most people find more desirable), is a loan for solar panels.
What is a Loan for Solar Panels?
A loan for solar panels is going to be one of the more popular choices when it comes to solar financing. One of the reasons is that a loan for solar panels is going to more desirable than other solar financing options is because they provide better overall savings than a solar lease or a power purchase agreement.
When you get a loan for solar panels, you are going to own the solar power system, which means that you can receive all of the available solar incentives and rebates, this includes the federal Investment Tax Credit. Also, you aren’t going to need to pay for a solar lease maintenance costs or the profit margins.
But one of the most important details is going to be the option of zero-down loans, the homeowners are going to immediately begin saving on the power bills, which will increase the value of their home by the value of their solar panels.
Solar Financing: with a Loan For Solar
A loan for solar panels is going to be very similar to a home improvement loan, that homeowners have used for decades to build a deck or even add a second bathroom to their homes. When the homeowner borrows money from a lender, they are going to agree to pay the money back, in addition to interest, in monthly installments over the entire term of the loan.
Loans for Solar Basics
- Lower interest rates result in lower overall costs for borrowers.
- Loans that have shorter terms will generally have higher monthly payments and lower the total costs over the entire life of the loan.
- A loan for solar panels can be either secured or unsecured, which might result in a wide variety of interest rates, the term lengths, and credit requirements among loan offerings.
Benefits of Solar Loans
- You are going to own your solar power system.
- A Loan for solar is going to be taken out to cover the cost of the solar panel installation - you are going to pay it back over time.
- A lot of loans are going to be $0-down, this allows homeowners to start receiving the benefits of solar power immediately.
- $0-down options used to only be available if you hard a solar lease or a PPA, but now there are $0-down loans that are available to homeowners can take advantage of, which allows them to own their solar power system.
- With a loan for solar homeowners are going eligible to receive solar incentives and rebates.
- There are going to be a lot of different provides for loans to choose from.
- A loan for solar panels is going to frequently have the highest net savings of all of the different solar financing options, with the small exception of cash purchases.
- With a loan for solar panels is going to offer immediate savings over your electric bill.
Questions to Ask When Considering a Loan for Solar
When getting any sort of loan, it’s recommended that they ask questions. A loan for solar panels is going to have different sorts of structures, terms, and conditions. If you want to find the loan for solar panels that are perfect for you, there’s going to be a few questions that you are going to need to ask.
Do You Want a Secured or Unsecured Option?
A loan for solar panels can be divided into two different categories. There’s the option of secured loans that are going to require an asset that is going to serve as collateral for the loan for solar panels - in most cases, that asset is going to be your own home. An unsecured loan for solar panels isn’t going to require any collateral other than the solar power system. Both of the loan categories are going to have implications for the borrower.
How Much Do You Want to Pay For Each Monthly Loan Installment?
The amount you are want to pay each month is going to impact the interest rate and the length of the loan for solar panels. The loans that have longer terms are going to have smaller monthly payments, however, you are going to pay more in interest over the life of the loan. The payments on a loan for solar panels with shorter terms might exceed your monthly utility bill savings, but they are going to offer a better value because you are going to pay less in interest over the entire life of the loan.
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