Going Solar doesn’t have to cost an arm and a leg. It used to be the case that putting solar panels on your roof would cost tens of thousands of dollars and would take over 20 years to pay off. That is no longer the case.
Recent industry developments have allowed the cost of solar power to come way down. Federal, state, and local incentives have increased, lowering the payback period dramatically. Additionally, companies have come up with new and better ways to help you finance your solar installation.
If you would like to learn more, please fill out our free evaluation form and we will have a solar expert contact you to determine which option is best suited for your situation.
Here is a brief overview of the different ways in which you can go solar.
Home owners essentially have three options when it comes to paying for large expenses like home remodeling, college tuition, or medical bills. In the past, buying a solar photovoltaic system was no different. You could either pay cash, take out a home equity loan, or refinance your mortgage. While low interest loans for residential solar installation do exist, buthome equity loans are generally easier to come by.
While we would all like to have cash on hand to purchase a solar photovoltaic system, this is not an option for the average person. Instead, most people use the value they have locked in their home to secure a loan. With a home equity loan, the borrower uses the equity in their home as collateral to secure a loan. By refinancing a mortgage, the borrower renegotiates the terms of their mortgage loan to raise additional cash.
Solar Leases and PPAs
In 2007, firms began to come up with new and creative ways to finance solar installations. These financing options originated with commercial market and quickly modified to suite the residential market.
Just like the traditional financing methods, the goal of these arrangements is to overcome the large upfront cost of a solar photovoltaic system. In both a power purchase agreement (PPA) and a solar lease, the system is installed, maintained, and owned by a 3rd party. This is a good thing as you reap the benefits of solar without taking on any of the risk associated with maintenance and ownership of a system.
With a power purchase agreement, the home owner pays a small down payment of around $1,000 at installation. After that the homeowner pays for energy used at a fixed rate that is lower than their local utility for the remainder of the systems life. With a solar lease, the homeowner also pays a small down payment, typically between $0 and $2,000 at installation. After that the homeowner pays to lease the system and for the energy generated by the panels. The energy generated by the panels is cheaper than the local utility rate and the homeowner ends up saving money on their monthly bill.
Residential Solar 101 is dedicated to educating homeowners and renters about solar power options. We believe that the economic argument for solar is just as compelling as the environmental one and that everyone can save money and the environment at the same time.