Solar Power Loan and Financing Options | Semper Solaris | (888) 210-3366
Getting solar panels installed for your home has never been cheaper. Financing options are available at affordable rates for those who wish to get the benefits of solar panels without breaking the bank.
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Power Purchase Agreements
Power Purchase Agreements (PPA) are a two-party contract that is a type of Third-Party Ownership (TPO). The power is purchased at a fixed rate, as the system is not owned by the homeowner, but by the solar company. With a solar PPA, you agree with the solar company to pay per kilowatt-hour for the electricity produced by their solar panels. With a Solar Power Purchase Agreement, you are paying for the power, not the equipment. You do not have to pay the high up-front costs of solar panels and equipment. Typically repairs, maintenance, and monitoring are included in the contract. This means that you are getting all of the benefits of solar without having to worry about occasional costly expenses of solar, such as maintenance and repairs.
Benefits of a Solar PPA
- Reduced Energy Costs
- Limited Risk
- Flexible and Affordable
- Potential Property Value Increase
Federal Tax Rebate
What is the Federal Tax Credit?
A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer.
The 30% Federal Solar Tax Credit has been extended for solar battery backup!
Solar Energy Loans
Solar panel loans are similar to home improvement loans in that they are a conventional bank loan that allows you to pay for your solar panels by fixed monthly payments with competitive interest. Your primary lender would be the best option to get more information about your specific financial situation.
Keep in mind that there is a significant difference between a solar panel loan and a regular home improvement loan. A solar panel loan allows you to leverage debt to own an asset that generates value for your home as well as generating electricity to minimize your electrical payments.
Hero Program
The Hero program, or the Home Energy Renovation Opportunity program, is a partnership between contractors and local governments that helps more people make home upgrades that save energy and water. Instead of homeowners paying for their solar panels upfront, Hero participants receive financing plans from Hero, from five to twenty years long. And, instead of paying it off like a credit bill, homeowners pay it on their annual property taxes and qualify based on their home equity.
The financing process is simple and straightforward. You can apply online with the Hero program, and they provide quick approvals.
The process looks like this:
- Apply – Find out how much your home is approved for
- Select – Choose the eligible products and select the contractor for the job
- Sign – Sign your financing documents
- Complete – Finish the installment
Semper Solaris has had a fruitful partnership with the Hero program and is proud to be a Hero Registered Contractor. Thanks to the Hero program, Semper Solaris can install panels right away, and homeowners can immediately slash their electric bills.
Semper Solaris is also a Channel Partner, which means we have a unique position that contractors can qualify for based on sales numbers, establishing an excellent internal record with Hero and, most importantly—customer satisfaction.
Semper Solaris is proud to offer top-notch service for your solar and roofing needs, and to do it in an affordable way for many homeowners, thanks to Hero.
Hero Program FAQ
The Hero Program offers a unique, affordable financing option for energy-efficient upgrades for increased efficiency, comfort and savings. Water-saving upgrades are also available in drought-impacted areas.
Hero Financing is a simple 4-step process: 1. Apply – Find out how much your home is approved for. 2. Select – Choose the eligible products and select the contractor for your job. 3. Sign – Sign your financing documents. 4. Complete – Finish the installation.
Hero is a PACE (Property Assessed Clean Energy) program that provides financing for energy-efficient and renewable energy products. In the state of California, Hero provides these same financing options for water-saving and drought-resistant products. Hero offers more consumers access to energy-efficient options because Hero is financed as an assessment on your property. The interest on these payments may be tax-deductible. Approval for Hero is primarily based on the equity in your home and your debt payment history, rather than your credit score. Hero finances 100% of the cost to purchase and install eligible products, with fixed rates and flexible terms of 5-20 years, depending on the improvements you choose. Should you decide to sell your property before your Hero assessment is paid in full, any remaining balance may be able to transfer to a new property owner. Property owners should consult their tax advisor regarding potential tax benefits
Any property owner who lives in a city or county where Hero has been approved by the local government can apply for Hero financing. To find out if Hero is available in your community, please check our communities list or call 855-Hero-411 (855-437-6411).
No. Only Hero Registered Contractors can install Hero eligible products. Each state has different qualification requirements in order to register for Hero. Contractors can determine applicable eligibility requirements on our website.
Specific eligibility requirements for residential properties include, but are not limited to, the following: 1. Applicant(s) must be the owner(s) of record for the respective Property. 2. Mortgage-related debt on the Property must not exceed 90% of the value of the Property. Property owner(s) must be current on their property taxes and there must be no more than one late payment in the past three years. 3. Property owners must be current on all Property debt of the subject Property at the time of application and cannot have had more than one 30 day mortgage late payment over the previous 12 months. 4. Property owner(s) must not have any declared bankruptcies within the past seven years, and the Property must not be an asset in any bankruptcy proceeding. 5. The Property must not have any federal or state income tax liens, judgment liens, mechanic’s liens, or similar involuntary liens. Some criteria can vary from state to state or city to city. For a full list of your eligibility requirements, give us a call at 855-Hero-411 (437-6411).
There are more than one million energy-efficient, and renewable energy products that qualify for financing through Hero. You can explore our list of eligible products for more information. Water-saving and drought-resistant products are available in some states. If you wish to install a product that is not on the list, contact us at 855-Hero-411 (855-437-6411) to get an application.
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Everything You Should Know About Solar Financing
Installing solar is a necessity in every sense – it can bring down pollution, reduce your dependency on the grid, and reduce your electricity bill. Despite these many benefits, people still hold back from going solar.
The upfront cost of installation is one reason. Although the investment breaks even within 3-4 years, affording the system at once might not be possible for everybody. This is where solar financing comes into view.
If it’s the lump sum payment that has been giving you jitters, this is a must-read guide. We’ve listed everything you need to know about a solar loan, how solar financing works, and more.
Dive in and decode the mystery surrounding the solar panel loan like never before.
What is solar financing?
Before we walk you through the schemes, it makes a great deal of sense to explain to you what solar financing is and how it can help you.
Here’s a simple explanation:
Solar financing is nothing but a vendor sponsoring you so that you don’t have to pay the entire cost of solar installation at once.
It’s just as good as the government offering subsidies to homeowners and housing societies.
However, in no sense does this mean that installing a solar system is bone-breaking. The kind of returns that solar offers are unimaginable. The entire concept behind a solar loan is to make things financially simpler for customers.
How can SolarSquare Help You?
SolarSquare is the third-biggest player in rooftop solar. We offer easy financing services with no hidden terms and conditions.
- – We offer a quick, hassle-free 10-minute loan approval.
- – We offer a range of EMI services. There’s a 6-month zero-cost EMI scheme, a 36-month EMI scheme, and a 5-year EMI scheme.
- – You pay just 30% of the installation cost upfront. The rest is broken down into easy installations.
Register with us to learn more about the easy solar financing options available.
What are the Conditions to Apply for a Solar Panel Loan?
Other than a good credit history, there’s nothing else that’s needed. There are absolutely no cons of availing a solar loan.
Let’s explain things with the help of an example.
Suppose, you choose a 3 KW solar system that’s worth ₹1,80,000 and the 6-month zero-cost EMI scheme to sponsor it.
- – You’ll pay 30% of the system’s cost upfront. In this case, it will be ₹54,000.
- – The remaining amount that’ll be broken down into installments will be ₹1,26,000.
- – You’ll be paying an EMI of just ₹21,000 for the next 6 months.
Considering that the electricity tariffs increase by 3-5% annually, going solar will give huge returns. This means, there are no cons to applying for and availing of a solar loan.
With the help of solar financing, you will be able to install a system at your home without upsetting your budget. There’s no better way of going solar than availing a solar panel loan if you do not wish to pay the entire amount at once.
Cost of Solar System vs the Savings From Solar
You already know what solar financing is and how we can help. It’s time now that we also walk you through the details of the cost of installation vs the cost of savings.
The comparison will help you make an informed decision about going solar and availing a solar loan.
Let’s continue with the example of a 3 KW solar system only. Suppose, the electricity tariff in your state is ₹8/unit and your monthly power consumption is 350-360 units.
Without going solar, your bill would be around ₹2800 to ₹3000. After installing the system, the bill will be almost nil.
It means that your annual savings will be roughly between ₹33,600 to ₹36,000. Keeping in mind that the option of subsidy is available and the tariffs increase by 3-5% every year, the cost of installation will break even within 3-4 years.
Solar panels from elite brands last for 25 years. Post which, they still produce electricity at 70% efficiency. After the cost breaks even and until the system lasts, you will continue getting free solar electricity.
The system that initially costs ₹1,80,000 will give you a yearly saving of approximately ₹36,000. You can imagine the kind of returns you will get throughout the life of the system.
Solar Financing: A Legit Option
Most builders and modern architects now construct homes that are solar-friendly already. It makes applying for a home loan a lot easier since solar is a sustainable option with guaranteed returns.
Gone are the days when solar systems used to be unaffordable and just a luxury for the rich. With easy solar panel loans and financing options, more and more people have started going solar. And so should you.
Conclusion:
Solar financing is the future. The solar subsidy will cease to exist someday but the solar loan will always be an option.
Being a vendor trusted by customers, we took it upon ourselves to make financing easy. Whether it’s quick loan approval or flexible EMI options, we offer our customers a wide range of services.
In a nutshell, you don’t have to disturb your budget any longer in order to install solar because you can easily get a solar panel loan.
FAQs
What is solar financing?
Solar financing is the assistance that’s offered to make things easier for customers. There are two options: EMI schemes and solar loans. The EMI schemes are flexible as well.
You pay just 30% installation cost upfront. The rest is broken down into monthly installments.
Are there any cons of availing a solar loan?
Absolutely not. As long as there are no hidden charges, a solar panel loan does not have any cons.
What are the conditions to get a solar loan?
You need a good credit score, that’s all. The rest is on us.
Install Solar Panel Systems At Your Homes With Simple Monthly Installments :Meezan Bank
Meezan Bank has started its interest free plan to install solar panel at your homes withe asy monthly installments. Meezan Bank started providing its clients with Shariah Compliant benefits. The bank has taken an initiative and started their solar panel financing programme.
The programme provides an accessibility of having renewable energy with easy installments plans and suitable pricing.
The installation of solar energy is a renewable energy source and reduces carbon emissions. Its installation will help people saving their electricity bills.
Perfect solar installation refers to generating your own electricity which means you will be utilising less from the utility supplier.
On the other hand, you can also make money by selling the unused electricity, which was generated by you, back to the grid. Solar panels are increasingly affordable as it gives great potential to save money on monthly utility bill.
On the other hand, generating your own electricity provides you the freedom to keep the lights on if there’s a disruption in power.
Solar panel only needs one thing that is sunlight. Even in winters when there are fewer hours of sunshine there is still a sufficient amount to power an average American home.
The installation will reduce the electricity bills by Upto 50%. Now you can install the solar panels without worrying about interest as the system is according to Shariah.
Solar Panel Details
Here is the complete description of the product is given below:
Eligibility Criteria
Meezan Bank has given eligibility criteria for business owners ,permanent job holders and for retired individuals. Those who are interested scan check tha Meezan banks website for complete details https://www.meezanbank.com/solar-panel-financing/
over, the property must be owned by the applicant where you have planned to install the solar panel. In the case of ownership by an immediate family member,the house owner will be the co-applicant.
How To Apply
If you are really interested to get the solar panel financing scheme. you need to visit the nearest Meezan Bank Branch or call at their helpline 111-331-331/111-331-332
- Get the quotation from bank’s Energy partner You can check the details on the website
- Submit the approved/signed application form, CNIC copy ,and a copy of the latest electricity bills
- The last step would be opening your account with Meezan Bank.
Costs Involved
The financing costs include the following:
- Cost of Solar Panel
- Cost of Inverter
- Price of other associated items like working, equipment, and installation charges
The price of batteries (both on-grid and off-grid) ,net meeting to be endured by the customers. Whereas, its arrangement is not financed.
Hence, it’s a great opportunity for everyone to avail the best plan according to the needs and enjoy the summers trouble-free with interest-free opportunity.
Solar Financing
Choosing how to finance your home solar system is a very exciting moment in the solar process. I mean, how often do you get to set your own price for electricity and choose when your solar savings kick in?
The way you choose to finance a solar system has a direct impact on the return on investment you see from your system. So, in this article we will explore the three main solar financing options, and how each one affects your energy cost savings.
Let’s dive in with a quick review of the available solar financing options.
Solar financing options
Solar financing options are divided into two camps.
- Direct Ownership (you own the system)
- Third Party Ownership (someone else owns the system)
Direct ownership of a solar system can be financed with a cash purchase or a solar loan. With the cost of solar panels plummeting and a 30% federal tax credit, ownership has become the preferred option for homeowners in the last decade.
Third party ownership can be financed through a solar lease or power purchase agreement (PPA). Leases and PPAs were more common in previous decades, but are now viewed as a last resort or going solar (for reasons we’ll cover later in this article).
| Cash purchase | Loan | Lease/PPA |
| You own the system | X | X |
| Greatest lifetime savings | X | |
| Immediate savings | X | X |
Now that we have an understanding of the options, let’s take a closer look at each one.
Buying solar panels with cash
In terms of accruing the greatest lifetime savings, cash is king.
If you have enough saved up, buying solar panels outright with cash payments will provide the greatest savings for the simple fact that you avoid interest payments that come with solar loans.
One way to look financing a solar system with cash is that you’re paying for 25 years of electricity in bulk. And if we’ve learned anything from Costco, everything is cheaper in bulk.
How buying solar with cash works
Buying a solar power system with cash is relatively straightforward as there are no third party solar financiers to deal with.
At Solar.com, there are 4 progress payments for a cash purchase:
- “Down Payment/Deposit” – 1,000 is typically due by the time your site visit is completed
- “Due Upon Approval of Site Designs” – 2,000 is due when you approve your ‘final site designs’ from the installer
- “Due Upon Delivery of Materials” – 60% of the remaining balance is due either when the equipment is delivered to you, or on the first day of installation
- “Due Upon Final Building Inspection – the rest of remaining balance is due once your project passes city building inspection.
One thing to consider with a cash purchase is your payback period. Although you’ll enjoy the greatest lifetime savings, it takes time — typically 6-10 years — to recoup your initial investment.
If you’d rather spread out your payments and front-load your solar savings, it’s worth considering a solar loan to finance your system.
Financing with a solar loan
If you do not have the cash up front to pay for your system, you can take out a solar loan.
If nothing else, solar loans are flexibleand designed to accomodate the solar tax credit.
There is typically no down payment required for a solar loan and loan terms range from 8-20 years. So, by choosing a combination of down payment and loan term, solar borrowers are essentially able to dictate when and how they’re savings kick in.
- Shorter loan terms mean
- Higher monthly payments
- Greater lifetime savings
- Less money spent on interest
- Lower monthly payments
- Less lifetime savings
- money spent on interest
Here’s an example based on a 20,000 system for a homeowner with an average utility bill of 138 per month before going solar.
| TERM | 8-YEAR | 12-YEAR | 15-YEAR | 20-YEAR |
| Initial monthly payment | 183 | 129 | 133 | 125 |
| Lifetime interest paid | 3,662 | 4,645 | 10,082 | 16,230 |
| Lifetime savings | 43,260 | 42,252 | 36,888 | 30,828 |
As you can see, the 8-year loan provides the greatest overall savings, but the 20-year option provides the greatest immediate bill savings.
Around 60% of solar borrowers go with a 12-year loan because it provides a balance of immediate bill reduction and long-term savings.
Solar loan rates and qualifications
Your loan payments and energy cost savings are also affected by interest rates and lending fees.
Interest rates are largely determined by market forces and Federal Reserve policy — fun stuff like that. Like mortgage rates, they fell sharply during the pandemic and have been rising since mid-2022.
There are really only two things you can do to lower the rate on your solar loan:
- Raise your FICO credit score. Generally, you need a 650 or higher FICO credit score to qualify for a solar loan. However, lenders usually offer lower interest rates for borrowers with credit scores between 680-719, and the best rates for borrowers with scores 720 and above.
- Move quickly. Rates are expected to continue rising in 2023. So, the sooner you get approved for a solar loan and lock in a rate, the lower it will be.
Although loan qualifications vary by lender, you typically need:
- A FICO credit score of 650 or higher
- A debt to income ratio (DTI) below 50%
- The name of the primary borrower needs to be on the title of the home getting the solar system.
If some cases, adding a co-borrower with a solid credit score and DTI can strengthen your application and increase your chances of getting loan approval.
Combo vs reamortizing solar loans
The other thing to consider is what kind of solar loan with which to finance your system. There are two types of solar-specific loans to know about: Combo and reamortizing loans.
Combo solar loans
As the name suggests, a combo loan is actually two loans. There’s a primary loan is for the net cost of the solar system after the 30% federal tax credit is applied, and a bridge loan for the value of the tax credit.
So, if the contract price of your solar system is 25,000, then the primary loan balance would be 17,500 and the bridge loan balance would be 7,500.
Borrowers typically have 12-18 months to claim their solar tax credit and use it to pay off the bridge loan (although the funds can come from anywhere). If they bridge loan isn’t paid off in time, it’s rolled into the primary loan, which raises the monthly payments.
Here’s how that looks for a 25,000 system in a 20-year combo loan
| Borrower A | Borrower B | |
| Payment for months 1-18 | 110 | 110 |
| Month 18 | Bridge loan paid off | Bridge loan not paid off |
| Payment for months 19-240 | 110 | 160 |
The advantage of a combo solar loan is that your initial monthly payments are based on the lower net cost of the system. In other words, the solar tax credit is built into the loan before you even claim it.
Combo loans are the preferred choice for borrowers that are confident they have the tax liability to claim the solar tax credit in one year. However, if you are retired, or unsure you have enough tax liability for any reason, it’s worth considering a reamortizing solar loan.
Consult a licensed tax professional with questions regarding your tax liability.
Reamortizing solar loans
The second common type of solar loan is a reamortizing loan.
Reamortize is a bit of a mouthful, but it refers to making a lump sum payment on your loan in order to reduce your monthly payments. Like, for example, if you were expecting a tax credit worth 30% of the cost of your solar system…
Since most solar loan borrowers are expecting to claim the tax credit, a reamortizing loan allows them to make a free, one-time lump sum payment to restructure their loan. Elsewhere in the lending world, there are servicing fees associated with reamortizing a loan.
Unlike a combo loan, the initial loan balance is based on the contract price of the system (ie what you paid for it). Let’s see how that looks for a 25,000 system in a 20-year reamortizing loan.
| Borrower A | Borrower B | |
| Payment for months 1-18 | 158 | 158 |
| Reamortization payment | 7,500 | 0 |
| Payments for months 19-240 | 108 | 158 |
The advantage of a reamortizing loan is that your monthly payments won’t go up if you are unable to claim the tax credit and apply it to your loan balance.
Property Assessed Clean Energy
One alternative solar loan option is the Property Assessed Clean Energy (PACE) program through the US Department of Energy.
Residential PACE pgrams are offered in California, Florida, and Missouri, and can be used to finance solar systems. In a PACE loan, the “debt is tied to the property as opposed to the property owner(s).”
Solar financing options for third party ownership
Now that we’ve covered the financing options for owning solar panels, let’s explore how to go solar without actually owning the system.
There are two ways to finance a solar system that someone else ones:
Let’s start with the solar lease.
Solar Leases
A solar lease is similar to a solar loan in the sense that both are forms of residential solar financing with zero down solar financing options. But the similarity pretty much stops there.
Ads for “free solar panels” are typically for solar leases and, yes, they are too good to be true. There’s no such thing as free solar panels.
With a solar lease, you are renting your system from a third party owner. You pay the owner a fixed monthly payment for the full term of the lease, which is typically 15-20 years, instead of paying your utility company for electricity.
Solar leases generally include an escalator, which raises your monthly payment by 2-5% every year. So, if you had 20-year lease with an initial payment of 125 per month and a 3.5% escalator, your monthly payment would eventually reach 240 by year 20.
| Year | Monthly payment |
| 1 | 125 |
| 5 | 143 |
| 10 | 170 |
| 15 | 202 |
| 20 | 240 |
While leases typically offer immediate bill savings, you run the risk of the escalator outpacing the rate of energy inflation.
It’s worth noting that since you don’t own the system:
- The installer collects the 30% tax credit, not you
- The system adds no value to your home
- Leased solar systems can slow and complicate home sales, since transferring them involves a third party
Solar leases were more common in previous decades when the cost of solar was prohibitive to many homeowners. However, between the plummeting cost of solar equipment and the federal tax credit, ownership is now much more attainable and lucrative.
Solar Power Purchase Agreements (PPAs)
Power Purchase Agreements are very similar to solar leases. The major difference is that instead of a flat monthly rate, you pay a monthly fee based on how much the system produces.
The idea is that this rate is lower than what you pay a utility for electricity. However, PPAs typically include escalators, which increases the payment each year, and there is no gaurantee that the PPA rate will stay below the utility rate.
Like a solar lease, you do not own the system in a PPA.
Should I buy or lease a solar system?
If your main goal is locking in a steady electricity and accumulating long-term energy cost savings, then buying a solar system is the way to go.
That graph below shows four ways of paying for 10,000 kWh of electricity per year. While a lease provides more immediate savings, buying a solar system — with cash or a loan — provides far greater lifetime savings.
Of course, there are other things to consider in addition to energy cost savings.
| Ownership advantages | Leasing advantages |
| Greater lifetime savings | Greater short-term savings |
| Increased home value | No maintenance |
| Claim the solar tax credit for yourself | |
| Easier to transfer in home sale | |
| Payments don’t escalate |
Lease and PPAs had their time in the spotlight when the cost-barrier to solar ownership was much higher. But today ownership is more affordable and adventageous, and leases are considered a last resort option for going solar.
The bottom line
While you may hear of the “high upfront cost” of going solar, financing a solar system is flexible and can be designed to meet your energy cost savings goals.
While buying a system with cash presents the greatest opportunity for return on investment, you can also use a solar loan to spread your payments overtime and start saving money sooner.
Solar financing FAQs
Can you finance solar panels?
Yes, there two types of loans specifically designed to finance solar panels: combo loans and reamortizing loans. In most cases, in order to qualify for a solar loan you need a minimum FICO credit score of 650, a debt-to-income ratio lower than 50%, and primary borrower’s name needs to on the title of the home.
How does solar financing work?
There are two types of solar loans: combo and reamortizing. In a combo loan, there is a primary loan for the net cost of the system and a bridge loan for the value of the 30% federal solar tax credit. This essentially allows solar borrowers to use the tax credit as a delayed downpayment on their loan.
In a reamortizing loan, the loan balance is the contract price of the system. This loan allows for a free, one-time lump sum payment to reduce monthly payments. Borrowers typically reamortize within 12-18 months, after they have received their solar tax credit.
Is financing solar panels worth it?
There are several benefits to financing a solar system. First, it allows homeowners to go solar — and start accumulating energy cost savings — even if they don’t have enough cash to purchase a system outright.
Second, financing solar panels allows you to front-load your energy cost savings with a zero-down loan. Typically, the payments on a solar loan are lower than the average monthly utility payment.
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Each product and or company featured here has been independently selected by the writer. You can learn more about our review methodology here. If you make a purchase using the links included, we may earn commission.
Written by Josh Hurst
Writer and editor with more than a decade’s experience in journalism. Josh worked for Christianity Today for seven years, and has contributed to special assignments for Apple Music and iTunes. Josh lives in Knoxville, Tennessee with his wife, Kati, and two sons, Henry and Dylan.While he mainly focuses on musical journalism he is excited to save the earth on article at a time through sustainability best practices articles as well. Learn About This Person
Reviewed by Melissa Smith
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Jump to Section:
- What Are the 3 Most Common Solar Panel Financing Options?
- How Do These Solar Financing Options Compare?
- Which Solar Panel Financing Option Is Right for You?
- What’s a Good Interest Rate When Financing Solar Panels?
- Is Interest From Solar Loans Tax Deductible?
- Which Banks Are Best for Solar Loans? (And Where to Apply)
- How Long Is a Typical Solar Loan?
- What Credit Score Do You Need for a Solar Loan?
- How Can You Save Money When Going Solar?
- Wrap Up: Is Financing Solar Panels Worth it?
- FAQs: Financing Solar Panels
Find the best price from solar installers in your area.
What Are the 3 Most Common Solar Panel Financing Options?
When buying solar panels, there are generally three ways for homeowners to pay for their systems from a solar company: cash, loan or lease. Although paying for your solar panels in cash upfront will maximize your savings and allow you to start saving on your energy bills right away, it’s not a realistic option for most homeowners. Instead, many homeowners take out a loan to finance their solar panels. With a good solar loan, homeowners will still see energy savings and be able to pay off their solar panels over time. Just make sure that your loan conditions, including origination fees and the interest rate, are suitable.
We do not recommend solar leases for most homeowners. Unlike paying for your panels in cash or with a loan, with a solar lease, you will not own your solar panels. Instead, you will be paying monthly “rent” for your solar equipment.
So which solar financing option is best for you? Keep reading to learn more about the pros and cons of each.
SunPower
SunPower designs and installs industry-leading residential solar and storage solutions across all 50 states. With a storied history of innovation dating back to 1985, no other company on this list can match SunPower’s experience and expertise.
SunPower earns its position as the top national installer on our list for a handful of reasons: It installs the most efficient solar technology on the residential market, offers the most expansive service area and backs its installations with a warranty well above the industry standard. All the while, SunPower pioneers sustainability efforts within the industry.
If that weren’t enough, SunPower systems come packaged with products all manufactured in-house by its sister company, Maxeon. This means that your panels, solar cells, inverters, battery and EV chargers are designed to work together and are all covered under the same warranty.
SunPower’s biggest downside? Its high-efficiency panels are considerably more expensive than most of its competitors’ products. However, its powerful panels are workhorses that make up for the initial cost with more backend production (think about this like spending more money for a car that gets more miles per gallon).
Facts and Figures: SunPower
| 5 |
| A |
| 1985 |
| Solar Panels, Solar Batteries, EV Chargers, System Monitoring |
| SunPower Panels |
| 25-year all-inclusive warranty |
Blue Raven Solar
We like Blue Raven Solar because it understands that, for most homeowners, the cost of solar presents the biggest barrier to entry.
For that reason, Blue Raven Solar developed an innovative solar financing plan that offers in-house, flexible, zero-money-down options. The results speak for themselves, as Blue Raven Solar is now one of the fastest-growing solar companies in the nation and was recently acquired by SunPower. Its BluePower Plus plan (exclusive to Blue Raven) mimics the flexible structure of a lease while still providing the greatest benefits of owning your system.
Eligible homeowners enjoy 18 months of solar power before having to pay their first bill. When coupled with the federal solar investment tax credit (ITC), the initial energy savings can offset more than a third of the overall cost of a system before requiring a dollar down.
In contrast, other installers can only offer similar financing through solar leases, PPAs or third-party providers (such as Mosaic or Sunlight). Third-party loan providers can complicate the process, while opting for a loan or PPA will disqualify you from some of solar’s biggest benefits (additional property value, federal solar tax credit and local solar incentives).
Facts and Figures: Blue Raven Solar
| 4.5 |
| A |
| 2014 |
| Solar Panels, System Monitoring |
| Trina Solar, Canadian Solar, SolarEdge, Silfab, SunPower |
| 25-year manufacturer warranty; 10-year workmanship warranty, 2-year production guarantee |
ADT Solar
ADT Solar sets the industry standard for warranty coverage by including a multifaceted guarantee, making it one of the top installers for homeowners who want added peace of mind.
Its warranty coverage includes all of the following for 25 years:
- Power Production Guarantee: Also known as a performance guarantee, this ensures your solar system will produce the amount of electricity that’s outlined in your proposal, or ADT will write you a check for the difference.
- Labor Guarantee: This covers any issues with the installation of your system and is also known as a workmanship warranty.
- Panel Module Performance Guarantee: This is what ADT Solar refers to the manufacturer warranty as, and it ensures that any manufacturing defects are repaired or your ineffective panels replaced.
- Enphase Microinverters Guarantee: This backs the performance of your inverters.
Though in recent years other solar companies have started to offer similar guarantees, ADT Solar has been at it since 2008, performing over 30,000 installations across the country.
Facts and Figures: ADT Solar
| 4 |
| A- |
| 2008 |
| Solar Panels, Solar Batteries, EV Chargers, Energy-Efficiency Upgrades |
| Silfab, Panasonic and others depending on location |
| 25-year all-inclusive warranty |
Paying for Solar Panels in Cash
For homeowners who wish to maximize their savings, paying in cash is the optimal way to go. After all, by buying a residential solar power system outright, you’re essentially paying in advance for 25 to 30 years of electricity to use in your home.
This means your home energy rates are locked in for decades, and you don’t have to worry about inflation or rising utility costs. The big problem with paying in cash is that the upfront system cost of solar power equipment tends to be fairly high.
Even when you take into account incentives like federal tax credits and rebates, you’re looking at an investment of at least 10,000 to 15,000. This isn’t going to be feasible for every homeowner.
Solar Panel Loans
Another option is to borrow money from a solar lender, using it to finance your solar installation, then paying it back over time. The most common types of solar loans include unsecured personal loans, home equity loans (or home equity lines of credit), home improvement loans, and in-house financing through your solar panel installation company.
If you choose a loan as your solar financing route, pay special attention to your annual percentage rate (APR), origination fees and loan terms. How much you pay in interest, fees, and your repayment period will often increase the overall cost of your renewable energy system.
However, rest assured that homeowners who finance their systems with a loan are still eligible for the federal government’s solar investment tax credit (ITC), which may make it a bit easier to pay off that loan. Some states and local governments have low-interest rate loan programs for clean energy systems that you can take advantage of, such as Property Assessed Clean Energy (PACE) loans.
Borrowers sometimes have solar programs as well, like Fannie Mae’s HomeStyle® Energy mortgage. If you’re interested in paying for a solar installation via a loan, make sure you research all low-interest financing options available to you.
Additionally, with congress recently passing the Inflation Reduction Act, there will be a significant expansion in government loans for solar energy systems.
Leasing Solar Panels
Homeowners may also choose to either lease their solar panels or participate in a power purchase agreement (PPA), through which you buy the electricity the panels on your roof are producing. Solar leases and solar PPAs are pretty similar, but with one significant difference:
A solar lease means you’re making fixed monthly payments to use solar panels and other solar equipment, whereas a PPA means you’re making monthly payments simply for the electricity produced by solar panels. Naturally, the amount of electricity may fluctuate quite a bit from month to month.
Solar leases can seem attractive at first, but for most homeowners, they don’t make much financial sense. One reason for this is that homeowners in PPAs or leases are not eligible for the federal solar tax credit. Another thing to note is that solar leases don’t enhance your property values, which can be one of the big financial incentives of a residential solar system. Other financing options will allow you to save a lot more money in the long run.
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