How do you pay for solar? What financing options are there and how do you apply? In this article, I will cover the most common financing options for solar. At Expert Solar, we work with financing partners who solely finance solar projects, to help you get approved for the best possible financing for your solar panels.
Solar Financing, Should I Switch to Solar?
There must be a good reason why 2.5 million homeowners–and counting–have already installed solar on their homes. Solar not only helps reduce your electricity bills, and increases the value of your home, but over all It’s a great investment! Solar panel systems last for 25 years or more, offsetting most or all of your electricity bill every month. Those monthly savings add up quickly: if you spend $150 per month on electricity today, you’ll spend over $65,000 on electricity in the next 25 years. By investing in solar, you can avoid most or all of that future spending on electricity
But solar isn’t free – to get these levels of savings, you have to first pay for your solar panel system, with a typical solar panel system costs around $35,000. Thankfully, there are a number of different ways to pay for your solar panel system, each with their own pros and cons.
Solar Financing Options
There are two primary ways to pay for solar: with a cash purchase or with a solar loan.
A cash purchase of a solar panel system is the best way to maximize your savings from solar. Think of it this way: if your solar panel system is designed to produce 100% of your electricity needs, then if you purchase your solar energy system upfront you’ve just paid for 25 years’ worth of electricity. Pretty cool! You’re insulated from any future electricity rate increases and you’ll receive all of the financial incentives and rebates associated with going solar. Overall, this means you’re likely to see a better return on your investment from solar than if you were to put that money into the market.
The second main way to own a solar panel system is with a solar loan. Solar loans are a wonderful financing option because they allow you to go solar and own the system with no money down, and often at a lower cost than what you pay for electricity at the moment. In other words, solar loans make it so that if you can afford your monthly electricity bill, you can afford to put solar on your roof. Not too shabby!
Cash vs. Loan
A cash purchase is right for you if:
- You’re looking to maximize your savings from solar;
- You have enough tax liability to take advantage of the solar investment tax credit (ITC);
- Or you have the funds available to pay for a solar panel system upfront.
A solar loan is right for you if:
- You don’t want to shell out the amount of cash required to pay for a solar panel system upfront;
- But you still want the most savings on your electricity bills as possible;
- And you would like to be eligible for all incentives and rebates.
At Expert Solar, we partner with financial institutions and banks to help you finance your solar panels. We work with banks such as Mosaic, GoodLeap, and Dividend, and can secure financing with a rate as low as 1.99%. Contact us to find out if you qualify for financing today.
Ricardo Del Sol
Editor, Expert Solar