Still, they can represent a significant upfront investment. Many people don’t want to or can’t purchase a solar power system outright, so it’s important to understand all of the available financing options. There’s no need to be discouraged if you decide that you cannot afford the upfront investment—rather than buying a solar photovoltaic (PV) system, you may be able to finance it with a solar loan or a solar lease / PPA without any money out of pocket and still save a significant amount on your utility bills. We’ll explain all of the financing options available to you. First, we’ll talk about the options that allow you to own your system, and then we’ll discuss solar leasing. We’ll also explain other options outside of owning and leasing your system that still will allow you to benefit from solar power systems.
Keep in mind, there are many financial incentives and rebates available in many areas that can reduce your upfront costs considerably if you decide want to own your solar energy system. If you decide you want to lease your system, you still will benefit from these same rebates and incentives indirectly. Your solar leasing company will use these benefits to reduce the price you pay for electricity to below market rates. Either way, whether you own your own system or lease one, you will benefit by saving money on your electricity bills!
Solar Loans are a great way to finance the installation of a solar photovoltaic (PV) system. These loans may be secured (using your property as collateral) or unsecured. Terms for these types of loans are generally 7 to 20 years. Currently, interest rates on equity loans range from 3.5%–7.5%.
Some things to consider:
In many ways, solar leases and PPAs are similar to renting. They are a way for you to receive many of the financial benefits of installing a solar power system, without the upfront cost of purchasing it. Also similar to renting, the responsibilities of maintaining the solar PV system will belong to the leasing company that owns the system.