Solar Panel Cost and Finance Options
In theory, going solar is a no-brainer. The amount of gas saved and emissions reduced annually is tremendous. And the long term financial savings are also clear. However, the initial Solar cost can be more than most homeowners are able to afford (the average out-of-pocket cost after government rebates is about $15k). Paying for solar panels seems out of reach... But it's not! There are many options that include solar loans with low interest rates and solar leases with no money down.
In the past decade, local and national government policies have driven private companies and public policy to make solar panels more affordable for Average Joe. Enter: Solar Loans. Power Purchase Agreements, and Solar Leases.
Solar panel leases are offered through private companies such as Sungevity and Solar City. They allow homeowners to borrow solar systems. The homeowner is often not required to put any money down and then pays a set amount of money per month. This monthly rate is almost always equivalent to the current energy bill, so the homeowner does not see an increase in monthly cost-of-living expenses.
Another option is private or state-sponsored loans. As with other loans, the homeowner makes monthly payments toward the principle amount (the amount borrowed) plus accrued interest. However, state-sponsored loans provide no-interest and very low-interest rates (usually 0-5%). Private loans take into account your equity in the home and often offer lower interest-rates as well.
Less common solar power purchase agreement (PPA) are contracts to buy electricity produced by a solar system. The system is installed on your roof, but you do not own the system. You buy the electricity that is produced from the system owner at an agrred upon rate.