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Solar panel financing options for going solar.

Solar panel financing options for going solar.

Despite switching to solar energy having tremendous benefits, it has not come so easily because of the high initial cost of solar panels. However, the economic and environmental benefits you could accrue for switching to solar are much more compared to not going solar.

For instance, a typical residential solar panel system in the U.S. costs $3.60/watt after installation and the solar panel could save a homeowner over $20,000 (net) in the course of 20 years.

To check how much you could save with solar, you can type the address in one of the online solar market places provided here. These solar market places will give you a snapshot of the costs involved as well as the potential savings available to you.

You are also provided with the financing options available to you to go solar with either cash, loan, PPA, and lease. A snapshot of the solar panel financing options available to you to switch to solar is provided below.

For most people going solar, they are interested in the value they achieve such as reducing their carbon footprint and saving with solar. To determine how much energy you can save. The EnergySage system can help you to get your personalized scenario of going solar.

However, by looking at your personalized solar panel cost in these online solar market places, it may appear to you that the cost of buying solar could be high based on your income and therefore you may want to learn more about what financing options are available to you when you want to switch to solar.

Nowadays financing barriers have been overcome by the use of innovative options to help solar consumers afford to switch to solar without any money down.

If you as the homeowner or business owner has a suitable rooftop or space to install solar photovoltaic (PV), you don’t have to have all the money upfront because of these innovative options.

Today, you can use third-party financing models such as leasing, solar power purchase agreements (SPPA) which require no money down helping to overcome financial barriers that may exist.

Also, government incentives have contributed to reducing the cost of switching to solar and with the tax credit and state incentives, the cost of solar is reduced even further based on where you live.

In addition, the price of solar equipment has reduced by almost 80% since 2009 because of continuous technology advancement and research and development which is still being done by the private sector and the government.


To understand the options of solar panel financing available today, please see below a brief snapshot of some of these options that you may want to consider when you decide to switch to solar. There are four options available today, namely:

  1. Leasing

  2. Loans from financial institutions

  3. Pay Cash

  4. PPA (Power Purchase Agreement)

1. Leasing

  1. With leasing solar consumers enter into an agreement with a solar company to install solar panels for a fee.

  2. In this model, you as the solar user do not own the system, but within this framework, you enter into an agreement to pay for solar power delivered to you through the lease agreement.

  3. Since you as the solar user does not own the solar panels, you agree to pay for the electricity produced by the solar panels.

  4. The advantage of switching to solar using this model is that you don’t have to go solar with no money down and you will still enjoy the savings associated with going solar.

  5. Also, you don’t bear the costs of installation, maintenance, and interconnection for going solar.

2. Loan

  1. Taking a loan is another option that solar consumers can opt to use to own the solar panels equipment and enjoy savings associated with switching to solar.

  2. There are various loan schemes out there to assist solar consumers to switch to solar.

  3. One of these schemes includes Property-assessed clean energy (PACE) loans which can be repaid in a period of 10–20 years.

  4. These schemes are suitable for homeowners and commercial buildings to help them implement improvements in their buildings that are capital intensive.

3. Cash

  1. Using this option to switch to solar is the best if you can pay upfront all the costs for switching to solar.

  2. This option allows you to go solar while saving with solar because you are not making any repayments to any loan.

  3. Also, you benefit from the tax credits from the government that are available when you go solar.

  4. The federal investment tax credit is currently set at 30% and depending on your tax appetite you may or not utilize the whole 30%.

  5. However, with the cash option, you will be bear all the risks and costs of installation, operation, maintenance, installation once your system is up and running.

4. Power-Purchase Agreement (PPA)

  1. This system is almost similar to leasing, but the only difference is based on the agreement with the solar contractor.

  2. With leasing, the model is to do with the usage of the solar panels installed on your property for a certain period of time, while the PPA model, the agreement is based on the supply of electricity derived from your installed solar panels.

  3. In both PPA and leasing, the solar panels are not owned by you, but the solar contractor.

  4. Just like with leasing, within a PPA, you can switch to solar with no money down and you are not responsible for the costs of installation, operation or maintenance.

  5. The only thing you agree to is to sign the PPA and purchase the solar power you utilize from the solar panels.

  6. The period of a PPA could range from 6 to 25 years based on the nature of your PPA agreement.

All these four options depend on your current financing situation and the regulatory structure of where you live. Since not all states offer all of the four solar financing options (because of the regulatory structure), the selection of the options may vary. Although not all states in the US, offer PPA.

To get a personalized solar panel financing report, click here to select from one of the solar market places of your choice. These online market places are a good starting point to obtain advice on the available financing options available to you based on your personal or specific information.

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