Would you like more control over your energy bills? Are you interested in solar panel installation but not sure how to finance it? Without savings, the cost of solar power can be inaccessible to many homeowners.
If you are struggling to see how you could afford solar panels, you are not alone. One-third of American homeowners have less than $500 in savings, and installing a solar energy system seems impossible.
Although they are expensive, owning solar panels can increase the value of your home and provide an extra income for your excess energy. Getting started can be tricky if you do not have any savings to pay for installation and equipment.
The good news is, there are lots of solar financing options available for homeowners and business owners. Here are some of the many ways you can buy a solar system.
Getting Started with Solar Financing
Solar energy is an excellent investment. In fact, they are so popular that there are over 2 million solar installations in the United States. Solar panels have a lifespan of 25 years or more and can save you a lot of money on your utility bills.
Unfortunately, to enjoy all the benefits of a solar installation, you have to pay the price. Solar panels aren’t cheap. The average setup costs are around $25,000.
So, where do you find that kind of money? There are three main options you can choose from when looking at solar financing. Upfront cash buy, solar leasing, and solar loans.
Cash UpFront
The quickest way to see a return on your investment is to pay cash when buying your solar energy system. You won’t pay any fees through financing, and you’ll reap the rewards from your energy bill savings immediately.
You may also be eligible for a 26% federal tax credit on your residential system. This applies to systems installed before 2022 and will fall to 22% after this point until 2023. If you plan to buy a solar photovoltaic (PV) system, then now is the best time to take advantage of this government scheme.
Solar Lease or PPA
One of the easiest ways to finance your solar system without cash upfront is by choosing a lease agreement or power purchase agreement (PPA). You agree to buy the power from the solar energy system in exchange for the solar installation costs. This is an affordable, maintenance-free way to install solar power.
How Does a PPA Work?
A solar company will provide the solar energy system and installation free of charge in exchange for a set rate per kilowatt-hour (kwh). The company will own the solar system and take care of any maintenance. The rate charged by the solar company will still be lower than your existing energy supplier, which means you will still save plenty of money.
PPA bills vary monthly and can be more expensive during the summer months when solar panels produce more electricity.
Most PPA agreements are $0-down, making them even more attractive as a solar panel financing option. You may also be able to pay the entirety of the agreement upfront if you can. PPA agreements are also available for commercial solar financing.
If you are interested in an installation for your business, then this type of financing could be perfect for you.
Advantages of Commercial Solar Financing
Many companies such as Amazon and Google use solar power to offset their carbon emissions. A solar energy system requires very little maintenance and lowers your energy costs. You could protect your business from rising energy prices and provide a secure energy supply for the future.
Investing in a solar energy system for your business will lower your carbon footprint and provide a return on investment (ROI) within the first year of ownership.
Solar Loan
Solar financing companies may offer loan options with fixed, low-interest rates. Most companies will offer a loan for $0-down to make it even easier for you to buy your new solar energy system. The cost will vary depending on the loan length, which may be from 10 to 20 years.
Financing your solar system this way will allow you to make affordable monthly payments and spread the cost of your solar energy system over a longer period of time.
It is also now possible to incorporate your solar financing into your mortgage. The Homestyle Energy Program allows you to make energy-related improvements to your home. You may be eligible for a new mortgage option that allows you to finance clean energy upgrades when purchasing a home.
Check the requirements to see if you are eligible for this solar financing option. You may save more money over time with this option as you’ll be able to claim state solar incentives.
Find the Right Solar Financing Solution
With so many solar financing options available, you’ll have no problems finding one that suits you and your situation. Take time to consider which option best fits your needs and speak with a reputable company about how they can help you with solar financing.
It’s also worth noting what you are currently paying your energy supplier so that you can see how much money you will save when you invest in solar power. You may find that your monthly loan or lease payments for your new solar setup are even less than your electricity bills.
Start by choosing a licensed and insured company such as West Bay Energy who guarantee the production of their solar panels. With a minimum 25 year warranty and high-quality installation, you’ll be in safe hands with West Bay Energy.
