HOW SHOULD I FINANCE MY SOLAR PANELS?
Given the fact that installing a solar PV system is a costly investment, is it best to find a financing plan that meets your needs and financial reality. There are three primary ways to pay for solar: with a cash purchase, with a solar loan, or with a solar lease/power purchase agreement.
(Note that Palmetto Energy Solutions only accepts cash purchase and a solar loan)
1. CASH PURCHASE
The first solar financing option available for clients going solar is by paying the whole cost cash. A cash purchase of a solar panel system is the best way to maximize your savings from solar. Think of it this way: if your solar panel system is designed to produce 100% of your electricity needs, then if you purchase your solar energy system upfront you have just paid for 25 years’ worth of electricity.
Cash purchase can be the right financing decision for you if:
A. You are looking to maximize your savings from solar.
B. You have enough tax liability to take advantage of the solar investment tax credit (ITC).
C. You have the funds available to pay for a solar panel system upfront.
2. SOLAR LOANS
The second and most common solar financing option is as solar loans. A solar loan is what it sounds like: a loan that allows you to purchase a solar-energy system and pay it off over time. Meaning, you can install and own the solar panel system and start saving money and energy with no money down.
Solar loans can be the right financing decision for you if:
A. You do not want to shell out the amount of cash required to pay for a solar panel system upfront.
B. You still want the most savings on your electricity bills as possible.
C. You would like to be eligible for all incentives and rebates.
3. SOLAR LEASES AND PPA
The last type of solar financing available is a solar lease or PPA. Solar leases and PPAs work very similarly, which is why they’re often lumped together: they are both a method of third party ownership (TPO), where that third party owner installs solar panels at your property and then sells you the electricity produced by the solar panels at a predetermined rate.
Solar loans may seem similar to a solar lease or PPA, but there is one key difference, which has two major implications: with a solar loan, you own the system, whereas with a solar lease/PPA, a third party owns the system. This means that with a solar loan, you are now eligible to receive any rebates and incentives for the solar panel system, but you will also be responsible for any future maintenance.
A solar lease/PPA is right for you if:
A. You would prefer someone else to monitor and maintain the system.
B. You aren’t eligible for tax incentives.
C. Or you’d just like to reduce and/or lock-in your monthly electricity bill.
Do you now know which option works for you? If you are still hesitant our team can help you better understand the options and which one meets your needs. LET US HELP