The concept of solar energy appeals to a lot of home and business owners who are interested in saving money and reducing their carbon footprint at the same time. However, the major setback for a lot of people is usually the initial cost of getting set up. Even with the return on investment being substantial, having all of the money upfront for installation expenses is challenging for most. Fortunately, solar installers have taken note of this and many have begun offering financing options to assist with costs. There are several plans to choose from, helpful for those looking for just the right one to suit their specific situation.
Leasing
Chances are, you’re familiar with the terms of leasing a car, so you can relate that knowledge to the idea of leasing solar equipment since it’s much the same. Property owners that decide to lease solar equipment won’t be obligated to put much money down, if any at all, and will be able to make monthly payments that are lower than a typical electricity bill. Ownership and maintenance responsibilities of the equipment belong to the solar installation company.
Power Purchase Agreement
With a power purchase agreement, property owners are still leasing the solar equipment, but are paying a monthly fee based on the energy the system produces instead of a fixed payment as with a regular lease. Again, this option offers no or minimal money down and the ownership and maintenance tasks remain with the solar company.
Home Equity Loan
Choosing a home equity loan eliminates the third-party ownership and involves taking out a loan with a lender to pay for the solar system directly. These loans use the property as collateral but end up saving the borrower much more money in the long run, and interest may be tax deductible.
Peer-to-Peer Lending
Peer-to-peer lending is one of the newest financing options offered by solar installers. This will match up the property owner with a lender that specializes in managing a community of borrowers and lenders who can then obtain or give out personal loans. A property won’t be used as collateral, but interest rates could, in turn, be higher when going this route.
Property Assessed Clean Energy Program
In states that offer a PACE program, property owners can finance a solar system by getting a loan from the city and paying it back through higher property taxes. The terms usually last from 15-20 years and will not reduce the equity of a home.
Shared
Unfortunately, not every building is a good fit for a solar system on its own because of too much shading, home ownership regulations, etc., but receiving solar power may still be a possibility through a shared alternative. This allows a community to invest in solar with one big installation with everyone subscribing to shared solar and paying for their portion of the agreement.
By choosing any of the above financing options made available by solar installers, home and business owners will receive many benefits from going solar, perhaps the most important being clean, renewable energy.
Tiffany Olson has a special place in her heart for green and sustainable living topics. She is passionate about solar energy and loves to share information with the public as often as she can. When she is not writing or researching you will usually find her cooking, reading or traveling.