Financing Solar Panels? Yes, it is Very Possible
With the price of residential and commercial electricity rising steadily over the last few years, homeowners are consistently on the lookout for money-saving strategies. Solar energy, made available through solar panel systems installed by a third party, is becoming one of the most prominent alternatives to conventional electricity providers. Not only does it tout the ability to lower your total energy costs each month, installing solar panels also offers financial benefits by way of increasing your home's value, access to tax incentives and rebates, the ability to be energy independent for the long haul.
Jumping on the solar energy bandwagon, however, comes with a fairly high price tag that some homeowners can't stomach without some outside assistance. Enter financing programs for solar energy, stage left.
Financing options for homeowners
Two main types of financing exist to cover the upfront cost of installing and maintaining solar panels on a home: loans and leasing. The latter typically comes in the form of a 20-year leasing agreement with the solar panel company where you as the homeowner never take ownership of the solar panels. One benefit to leasing is that the company providing the panels takes responsibility for the maintenance necessary to keep the system functioning. Additionally, solar leasing agreements allow you to obtain a solar panel system without having to pay out of pocket. Unfortunately, leasing solar panels puts the kibosh on qualifying for tax credits, rebates, or other incentives, as though remain with the owner of the system.
As an alternative to leasing your new solar panel system, you have the option to own the system outright by taking out a home equity or personal loan to financing the upfront costs. Because solar panel systems cost between $15,000 and $30,000 on average per household, financing through a long-term loan is a common choice. Let's take a closer look at the cost-saving benefits of owning your solar panel system with the help of a personal loan.
Benefits to financing with a personal loan
Taking out a personal loan instead of leasing your new solar panel system comes with a myriad of benefits that make the investment worthwhile. Because you own the system instead of the solar panel provider, you reap the following rewards:
• Access to incentives: One of the draws to adding solar panels to your home is the ability to access both federal and state incentives which work to offset the upfront cost of installation. Currently, there is a 30% federal investment tax credit for solar energy systems, in addition to numerous state, county, and city incentives. These cost-saving benefits are only available to you when you purchase the system outright, either in cash or with the help of a personal loan.
• Little to no down payment required: taking a personal loan for solar energy panel installation means that you do not have to bring cash to the table to start the process. Instead of waiting to accumulate savings upwards of $30,000 to buy the system, you can tap into available personal loan offers that require little to no money down.
• Cost-effective financing: in addition to no money out of pocket initially, personal loans for solar energy panel installation offer a variety of repayment terms, typically ranging from 10 to 20 years. With this extended repayment option, you have the ability to reap the benefits of solar energy in your home without having an oppressive monthly payment. Interest rates for solar panel personal loans vary depending on your credit history and score but often are far lower than what a credit card or solar energy company would offer.
Personal loans are a smart way to finance solar energy systems and provide most cost-saving benefits than taking part in a leasing program. With a personal loan, you can start reducing your monthly energy bill immediately while increasing the total value of your home. Additionally, personal loans for solar panels allow you to receive federal and statewide incentives for installation, lowering the total cost of installation and maintenance over time. Finally, the ability to pay no money down and extend repayment over the course of 10 or 20 years makes a personal loan a truly cost-effective method to finance your new solar energy system.