What are your options for solar financing?
Funding for residential solar panels can take many different forms
If you're a Utah homeowner, investing in a solar panel system can be a wise decision for both your finances and the environment. With solar energy, you can significantly reduce your electricity bills, offsetting most or all of your monthly electricity costs, and increase your home's value. When considering financing options, it's essential to compare total cost, repayment terms, and incentives to find the solution that’s right for you. Here are the most common financing options for solar panel systems available to homeowners:
- Cash Upfront: Paying for your system upfront is the best way to maximize savings from solar, as you'll own the system outright and receive all incentives and rebates associated with it. However, the upfront cost of solar can be expensive, ranging from $20,000 to $30,000, which may not be feasible for many homeowners.
- Solar Financing: The second option is to finance the solar panel system with a loan. A solar loan allows you to own the system with no down payment, often at a lower cost than what you pay for electricity, especially if you have good credit. Solar loans have fixed interest rates, and there are no origination fees. With solar loans, homeowners are eligible to receive rebates and incentives, and they're responsible for any future maintenance.
- Home Equity Loan: Another option to consider is a home equity loan or line of credit (HELOC), which are secured loans that allow homeowners to borrow against their home's equity. These loans have fixed interest rates and the ability to deduct interest, but they're only best for a small subset of lenders and have a long application process.
- Solar Leases and PPA’s: It's also possible to finance a solar panel system with a solar lease or power purchase agreement (PPA), which are similar to renting the system from a third-party provider. However, with a solar lease/PPA, a third party owns the system, and the homeowner doesn't receive incentives or rebates.