Going solar is a significant investment. Solar financing options will help you save money when going solar and save on your future electricity bills.
With solar purchase, you will take advantage of the solar energy immediately, paying for that over time. If you have already made the decision to go solar, your next step will be figuring out how to pay for it. Purchasing a solar PV system and paying its total cost will allow you to get the best deal as you will be saving any additional cost, including interest rates. So, doing some research on solar you will find the best financing option for your solar panel system.
There are various ways of financing your solar PV system. Solar loans are one of the most popular ones. With solar loans, you can finance the entire cost of your system. Before getting a solar loan, consider some facts. Your monthly electricity bill savings must be greater than your loan’s monthly payment. In that case, you will start saving money. Even though buying a solar system instantly and by cash will make you eligible for financial incentives, like the federal investment tax credit (ITC), with solar loans it is still possible to receive tax deductions, adding additional savings.
So, by getting a solar loan, you will receive clean energy and financial benefits. How to obtain a solar loan?
Solar loans are similar to home improvement loans completing upgrades or renovations, similar to the basement or re-doing your kitchen.
If you do not want to purchase your solar panels or choose a solar loan, there are also other options you can consider.
Solar Power Purchase Agreement (PPA) Financing and Solar leases
The Power Purchase Agreement (PPA) is one of the most popular solar PV system financing options. It is easy and affordable. In the case of PPA, the solar provider, owning all the equipment, gets all the refunds and you should pay for the power that your solar system produces. So, you get the financial benefits of installing a solar energy system even not paying for it.
What You Should Consider When Choosing A Solar Lease Or PPA?
With the PPA or a solar lease, you have solar panels installed at your location and pay a below-market price. Another advantage is that by choosing a solar lease or PPA, you will save about one-third of your PPA. At the end of the lease, people usually remove or sell the system at the fair market.
Both options (lease and PPA) are great and can help you save money on electricity in the future annually, but the availability varies by location. With a solar lease, you again don’t pay for the panel cost. You just pay for using that. As your homeowner owns the solar panel system, all the rebates, tax credits and incentives will be eligible for him.
The solar provider takes care of the solar installation, maintenance and warranty. So, you are not buying the system, just renting to use that.
Deferred Payment Agreement (DPA)
By buying a solar PV system through a deferred payment agreement, you will receive 25-30%. The benefit of buying solar under DPA is that it makes going solar affordable and flexible.
You never purchase the solar PV system only for the solar energy produced by the solar PV system. A solar power developer owns the Solar PV system set up on your rooftop. You only pay for the generated electricity at a pre-agreed tariff. This usually requires a long-term buying commitment and guarantees from your side and entails a lengthy credit appraisal process. This mode of buying solar is usually available to only commercial and industrial power consumers.
Is It Easy To Relocate The Solar System?
It is rather easy relocating your rooftop system. However, it can sometimes cause rooftop damage. So, moving the solar system might not be a good idea. Besides, during the relocating period, the solar system may be affected. Relocating the solar system might also affect the insurance and the warranty benefits of your solar system. If you own the solar system, do check the warranty and insurance details before making the relocation.
So, a solar system might also affect the insurance and the warranty benefits of your solar system. If you own the solar system, do check the warranty and insurance details before making the relocation.
Your consultant will help you go over all the options and choose/pick the option best fitting you/your case.
Author of a publication: Irene Abgaryan