Financing Solar

Cashcost of solar

Paying in cash is a great way to go. It lets you maximize your return on investment by avoiding any interest or administrative fees associated with other financing methods.
Pros: Paying in cash is the cheapest option since you do not have to pay interest on a loan. This allows the system to pay for itself sooner, saving you money. Additionally, you own the solar photovoltaic system outright, adding considerable value to the value of your home.
Cons: By owning the system, you are responsible for system upkeep. If an inverter or panel needs to be replaced it is going to come out of your wallet.

Home Equity Loancost of solar

A home equity loan (HEL) is a loan in which a homeowner is able to borrow money by using the equity in their home as collateral. Equity in this case refers to the portion of the home that the person owns, or the difference between the home’s fair market value and the outstanding balance of all loans on the property.
Home equity loans are very common and require a good credit history. They are secured loans as collateral, in this case the equity in your home, ensures that the bank will be able to regain some of their loses in case you end up defaulting.
Pros: Home equity loans are available to people in all geographic locations. In some cases it is possible to deduct the interest from one’s personal income taxes, thereby reducing the interest or making the loan interest free. Additionally, the loan pays cash upfront in one lump sum, allowing you to buy the solar photovoltaic system outright. Owning the system adds considerable value to your home.
Cons: There can be many administrative fees associated with securing a home equity loan. Additionally, you have to use the equity you have secured in your home as collateral. By owning the system, you are responsible for system upkeep. If an inverter or panel needs to be replaced it is going to come out of your wallet.

Refinancing Your Mortgage

Refinancing your mortgage is a process in which the outstanding debt on your current mortgage is paid off by a new mortgage loan, typically at more desirable terms. Better terms may become available due to changes in the economy or increases in your credit score. In our case refinancing is done to raise additional money to buy a solar photovoltaic system, but can be done for many other reasons: altering the duration of the mortgage, reducing payment size, or consolidating debt.
Refinancing your mortgage is common and needs be carefully planned out. In certain instances, fees can wipe out any potential savings. Typically it is only used as a means to raise money if other benefits can be gained from altering the terms of your mortgage.
Pros: Refinancing your mortgage is an option that is available to people in all geographic locations. By raising money through a mortgage, the borrower can take advantage of tax breaks that are not available for other types of loans. Additionally, the loan pays cash upfront in one lump sum, allowing you to buy the solar photovoltaic system outright. Owning the system adds considerable value to your home.
Cons: There are many administrative fees associated with refinancing your mortgage. Additionally, you have to use your home as collateral. By owning the solar system, you are responsible for system upkeep. If an inverter or panel needs to be replaced it is going to come out of your wallet.