Every year, America’s solar footprint grows larger. The American people clearly see the merits in transitioning to solar power.
In this politically divided country, it is rare to see a vast majority agree on something. However, roughly 84 percent of Americans support expanding solar power even further.
Solar power supporters recognize its cost savings and positive impact on the environment. The one thing holding homeowners back is the high upfront costs.
Read on to learn all about solar financing. Explore three different ways to pay for solar power that is certain to help you manage costs.
The least desirable option is to lease your solar panels. There are still many benefits to choosing this option for your residential solar financing.
The primary reason why leasing is less desirable than other solar panel financing options is that there is no ownership stake. You simply make fixed or variable monthly payments each month.
While you will save money each month on electricity, this alternative provides the lowest return on investment. However, it does yield environmental benefits and reduce your utility bill.
One important note is that costs for leases and power purchase agreements (PPAs) depend on a monthly electricity rate. Many leases and PPAs offer a fixed rate that does not change for the life of the agreement. However, some contracts allow for annual upward adjustments and are less desirable.
Another option is to take out a loan for the solar panels. Many solar panel companies offer loan packages.
The terms vary based on market conditions and tax incentives offered by the state. Solar panel financing works like any other traditional loan. There is a fixed or variable interest rate and a term that the loan is paid off.
Each company works a little differently. For example, Blue Raven Solar panels are provided to customers for the first 18 months. This is an incentive to encourage homeowners to make the switch.
The most cost-effective option is to pay for your solar panels in cash. The total cost varies depending on the state you live in. Data shows solar panels are the most expensive in Hawaii with a 6kW system costing nearly $20,000.
The reason cash is the best option is that it eliminates financing expenses. You are no longer incurring monthly interest charges or any other loan fees.
There are various credits available to help you pay for solar panels. The federal government offers a 22% tax credit on your green energy purchase. Depending on the program you use to file taxes, it should automatically query you about any renewable energy purchases you made.
The state you live in may offer additional assistance as well. States have a motive to incentivize solar as it reduces the burden on the energy grid. It also helps keep the environment clean.
Solar Financing – Three Options To Pay
You are now ready to get a quote for solar power. By switching to solar, you are doing your part to help the environment. At the same time, all three options reduce your monthly utility bills.
If you enjoyed this article about solar financing, check out our blog for more great content.