Soak Up the Sun and Save! An In-Depth Guide to Solar Panel Financing Options
Would you like to have solar panels installed on the roof of your home so that you can start using the sun to power your house? This has turned into an excellent option for many homeowners.
But before you make the decision to have a solar panel system put into place on the top of your home, it’s very important for you to figure out how you’re going to pay for it. It often costs tens of thousands of dollars to do solar panel installation.
This forces many people to look into the different solar panel financing options that they have. These options allow people to pay for solar panels for their homes without having to break the bank.
The good news is that there are all kinds of ways to pay for solar panels over time. But you should make sure that you do your research on each of them so that you select the right option for your specific situation.
Here are some of the best solar panel financing options available as of right now.
Cash
This obviously isn’t going to be an option for everyone. But before we dive headfirst into the different solar panel financing options, we should mention that the saying, “Cash is king,” definitely applies to solar panels.
If you can somehow manage to swing it, paying cash for solar panels is always your best option. You’ll own your solar panels outright when you take this approach to pay for them and get to enjoy all the benefits that come along with them right from the start.
If you happen to have some extra money stashed away in the bank, it would be a great idea to use it to pay for the solar panels that you put on top of your home. It would also be a great idea to look into the different solar tax credits that you might qualify for when paying cash for solar panels.
These tax credits could make solar panels a whole lot more affordable than they would be otherwise. They could potentially make it possible for you to pay cash for them.
Personal Loan
If you know that paying cash for solar panels isn’t going to be an option based on what they’re going to cost you, another great solar panel financing option will involve taking out a personal loan. There are plenty of personal loan lenders out there that would be more than happy to extend you the money that you need to install solar panels on your roof.
Most lenders specialize in providing loans to people who want to perform home improvement projects, and solar panel installation would fall into that category. It’s why many of these lenders will be quick to jump at the chance to give you the money that you need to invest in solar panels for your home.
It’s smart to let lenders know that you’re going to be using a personal loan for solar panels right from the start. Some of them might be more likely to provide you with the funding that you need when they know it’s going towards such a good cause.
Solar Loan
Solar energy has been popular for a few years now, but it’s expected to become even more popular in the years to come. Experts are predicting that the total number of solar installations is going to double within the next 5 years.
With this in mind, it shouldn’t come as a huge surprise to hear that there are many lenders that are starting to specialize exclusively in dishing out solar loans to those who need them. There is a huge solar panel financing market that is developing, and lenders are rushing to get in on the action by providing people with the solar loans that they need.
Rather than taking out a personal loan through a traditional lender while looking for solar panel financing, you should think about going with one that deals only with solar loans. They’ll have a better understanding as far as what your needs are when it comes to solar energy.
A lender like Loanpal is a great example of a lender that you should think about using. They can speak with you about the various solar loans that they have available and find the one that’s going to work the best for you in the end.
Loanpal has transformed into one of the largest solar loan companies in the country at this point. You can feel confident working with them when trying to secure a loan so that you can install solar panels on your home.
Home Equity Line of Credit
Have you owned your home for more than a few years now and built up a lot of equity in it in the process? If you have, you might want to take advantage of what’s called a home equity line of credit—also known as a HELOC—when purchasing solar panels.
With a HELOC, you’ll get access to a line of credit that you can use to make improvements to your house. Depending on how much your house is worth and what you still owe on it, you could earn tens of thousands of dollars worth of credit by using a HELOC to your advantage.
Oftentimes, those who use HELOCs are able to secure much lower interest rates on the money that they borrow than they would be able to on personal loans. It’s why so many homeowners have turned to HELOCs when putting solar panels into place on their roofs.
If nothing else, it would be worth considering how a HELOC could help you to get your hands on the funding you’ll need to do solar panel installation. You might have more than enough equity built up in your home to be able to pay for solar panels for it without a problem.
Second Mortgage
There are a lot of people who mistakenly believe that HELOCs and second mortgages are one and the same. But a second mortgage is actually a lot different than a HELOC and another option for you to think about using when you’re on the hunt for solar panel financing.
Unlike HELOCs that give you access to a line of credit, a second mortgage will provide you with a lump sum of cash that you can utilize to pay for solar panels for your home. You’ll then be asked to repay a second mortgage just like you would a regular mortgage. It’ll come with monthly payments that you’ll have to start making after taking one out.
Taking out a second mortgage can be scary for some people, especially when they still have quite a bit of time left on their first mortgage. But if you think you can save yourself a significant amount of money by installing solar panels, it might be worth considering this as a viable option.
Power Purchase Agreement
Do you wish there was a way to install solar panels on top of your home without paying for them up front? There actually is a way to do this if you don’t mind giving up ownership of the solar panels.
There are lots of solar companies that offer what are known as power purchase agreements, or PPAs. When you make a power purchase agreement with a solar company, they’ll handle installing solar panels on your home at no charge to you.
But there is, of course, a catch. The solar company will then own these solar panels and charge you to use them. You’ll pay them for any energy that you use that is generated by the solar panels.
This is still a great way for some homeowners to save money on their energy bills. But unlike the other solar panel financing options listed here, you’re not ever going to own your solar panels outright with a power purchase agreement. You’re also not going to get any of the attractive solar tax credits.
That doesn’t necessarily mean you shouldn’t sign up for a power purchase agreement. But you should consider all of your other solar panel financing options before settling for one. It would feel so much better to own your solar panels outright and enjoy the savings that often comes along with them.
Which Solar Panel Financing Option Is Right for You?
As you can see, there are so many ways for you to buy solar panels when you want to install them on top of your home. From paying cash for them to using one of the other solar panel financing options listed here, you should be able to find something that’ll allow you to take advantage of solar energy.
Do your homework on each of these solar panel financing options to determine which one is going to work best for you. You should be able to find one that’s going to help bring you one step closer to owning solar panels without forcing you to spend a small fortune.
Read the rest of the articles on our blog to get more great advice on saving money in your everyday life.
