Jessica PirroAugust 24, 20203320
Financing for Solar Panels Cheat Sheet
When a homeowner is looking to get a solar panel installation, one of the first things that they need to do is figure out how they are going to financing for solar panels. Because a solar panel installation is expensive most people are going to need to figure out how they are going to pay for the solar panels. Here’s financing for solar panels cheat sheet:
Financing for Solar Panels Options
Solar power systems are a large investment, and a lot of people can’t pay for their solar power system with cash. There are going to be a few financing for solar panels options that help homeowners get a solar panel installation.
Loans for solar panels are great financing for solar panels options if you want to buy your solar power system. With most of the loans for solar panels, you can finance the entire solar panel installation. These loans for solar panels will be either secured or unsecured.
Here are a few things that you should consider if you’re interested in loans for solar panels:
- Your monthly savings on your electric bill should be greater than the loan’s monthly payment, which allows you to start saving money quickly.
- You can save 40 to 70 percent on electricity costs over the entire lifetime of your solar power system, when compared to doing nothing, including choosing a loan as your financing for solar panels option.
- Solar loans are going to have the same basic structure, the terms and conditions, and other improvement loans. Some states will even offer subsidized loans for solar panels with below-market interest rates.
- When you buy your solar power system outright, you will be eligible for financial solar incentives like the federal investment tax credit (ITC). The interest on secured loans for solar panels might also be tax-deductible, and this will mean additional savings on your income tax.
The Availability of Loans for Solar
You can get loans for solar panels from traditional banks, as well as many other institutions that are going to offer loans for solar panels.
- Credit unions across the country are starting to develop their loans for solar, and will often offer loans for solar that are low-cost solar loans.
- National lending institutions are going to offer specialty loan products tailored to residential solar panel installations.
-Public-private partnerships can offer loans for solar panels programs. The local government agencies are going to partner with private lenders to offer loans for solar panels with lower interest rates and without any fees.
- Utilities will also offer on-bill financing programs that allow homeowners to finance solar power systems and repay the borrowed amount through electric bills.
- Municipalities will sometimes offer PACE (Property Assessed Clean Energy) solar panel financing, which is repaid by an annual assessment on property owners’ property tax bill.
Main Benefits of Loans for Solar
- There are many loans for solar options that are available to you.
- With a solar loan, you can save 40-70% over the lifetime of your solar panels.
- Many are $0-down loans for solar and will allow you to finance the total amount of your solar panel installation.
- Loans for solar are going to have the same basic structure, terms, and conditions as other home improvement loans for solar.
- Loans for solar panels are going to offer homeowners returns by saving them money right away, including when you are repaying the loans.
Solar leases and Power Purchase Agreements (PPA)
Solar leases and power purchase agreements (PPAs) are a lot like renting your solar power system. Solar leases offer homeowners a lot of financial benefits, like installing a solar power system without paying for it.
Here are a few things that you should consider if you’re interested in solar leases and power purchase agreements for solar panels:
- Solar leases or PPA are owned by a third party owner (TPO) who will install the solar panels at your property and, in exchange you are going to agree to pay them a below-market rate to use the solar power for the entire term of the agreement.
- When a homeowner selects solar leases or PPAs as their preferred financing for the solar option you are going to save around 10 to 30 percent a month over your utility’s electricity bills without any upfront investment required.
- The owner of the solar power system is going to be responsible for the solar panel installations maintenance, at the end of the solar lease, the owner can either sell you the solar power system or remove it completely.
Main Points You Should Know About Solar Leases and PPAs
- There are a lot of solar leases and PPA options that are available for you.
- There’s a lot of $0-down agreements, however, there are some that require a down payment or ask you to pay upfront.
- You can expect 10-30% savings over the cost of your utility electricity bill.
- With solar leases, you do not own the solar power system on your property.
What is the Difference Between Solar Leases and Solar PPAs
With solar leases, homeowners are agreeing to pay a fixed monthly amount as ‘rent’ or lease payment, which is calculated using the estimated amount of electricity the system will produce, in exchange for the right to use the solar power system. With a solar PPA, instead of paying to “rent” the solar power system, you are agreeing to purchase the solar power that is generated by the solar power system at a set per-kWh price.
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