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Types of Solar Financing

Solar Purchase and Ownership

The easiest to get solar power is to pay for the installation yourself. In the long run, you’ll get the highest value for cost savings. Purchasing your solar panels also gives you immediate benefits from solar tax credits, rebates and lower utility bills. There are fewer third-party financial conditions and it makes the timespan to experience the return on your investment even shorter. Financial benefits when you pay full cash upfront include:

  • Higher long-term savings

  • Monthly energy bill savings from the first month, with no monthly payment to offset the savings

  • Your solar purchase is tax deductible or exempt from property or sales tax in some states

Solar Loans

A loan that’s used towards the purchase of solar power system for your home. Solar loan financing lets you to avoid steep payments upfront and provides immediate ownership of your system. Just like a regular loan, it is paid off in monthly payments with an applied interest rate. Since you are considered the owner of the system, you are entitled to the benefits including tax credits and rebates. Savings will be higher because solar loans are paid down after a certain number of years, giving you greater savings with your solar system each month afterwards. Solar panels also increase your home’s property value. A solar system can help your home sell quicker according to studies. Since you’ll receive a higher amount for your home, you could recover the amount of the loan. Benefits of a solar loan include:

  • Low upfront cost depending on type of loan

  • Significant long-term savings

  • Monthly utility bill savings

  • Loan payment gets paid down and eventually goes away


Solar Leases and Power Purchase Agreements (PPA)

When you lease your solar panels, you get a solar lease (PPA) where you make monthly payments. You will never own your solar system. Compared to other solar financing options, a solar lease does come with negatives. You cannot receive the deductions that come from the Solar Investment Tax Credit (ITC). You have to own your system to receive a state or federal tax credit. Benefits of solar leasing include:

  • Lower upfront cost than purchasing with cash

  • Maintenance for solar system is the responsibility of the leasing company

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