Solar Financing Options

Solar Panel Financing – What Are Your Options?

There are many solar advantages and disadvantages to consider when deciding whether solar energy is right for you. Thanks to the heavy drop in the price of going solar and the variety of solar financing options available to homeowners, going solar can be affordable for everyone.

There are four main ways to finance solar panels on your home:

What solar financing option should you choose? That all depends on your personal preferences. The below comparison shows you the most important details for each option. You can click into the different solar financing options for much more extensive information. Regardless of how you choose to pay for solar, deciding to install solar panels makes good financial sense.

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Solar Financing Options Compared

Solar Loan Solar Lease Solar PPA Solar Cash Purchase
Money down required $0 $0 $0 All cash required up-front
Payments Monthly set rate Monthly set rate,
increases by escalator
Set rate for power
produced by panels,
increases by escalator 1x/year
Up front once
System Ownership Homeowner Installer Installer Homeowner
System Maintenance Homeowner Installer Installer Homeowner
Length (years) 2,5,10,15,20 10,15,20 10,15,20 Not applicable

Solar Loans

Just like a home loan or a car loan, a solar loan is a loan specifically for adding solar to your home. You receive any tax credits and incentives associated with installing solar. Solar loans are now provided by many banks, credit unions and solar companies.

Best for: Homeowners who want to save as much as possible while putting $0 down, and who will be able to use the corresponding tax credits.

Solar Leases

Just like leasing a car – you pay a monthly fee and a solar leasing company puts your panels on the roof. The solar leasing company services them and you receive the energy they produce while saving on your electric bill.

Best for: Homeowners who want to go solar with $0 money down and as little hassle as possible.

Solar PPAs (Power Purchase Agreements)

This is where you pay for the power your panels produce each month from a solar company, just like your regular utility contract, but at a reduced price for the length of the contract. A solar company installs and services the panels.

Best for: Homeowners who would prefer the convenience of a lease, but want to pay only for the power coming off the panels instead of leasing the panels (so your payments can be variable, while solar lease prices are at pre-determined rates). The final savings are usually almost exactly identical to a lease, but could be different if you have exceptionally sunny or cloudy days.

Solar Cash Purchases

A cash purchase. As a homeowner you purchase the system outright, providing you with a free source of electricity and the most possible savings over time in power costs. You receive any tax credits and incentives associated with installing solar.

Best for: Homeowners who are willing to pay for their system upfront in exchange for the highest savings in the long-run and are able to use the corresponding tax credits.

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