According to the US Department of Energy, about 85% of residential solar projects are financed. Financing is the most common method of paying for solar panels, so you aren’t alone if you’re considering financing your switch to renewable energy. However, financing agreements are a big commitment, so ensuring you’re making the right choice is vital. Here’s how to choose a solar company to finance an installation and whether it’s right for you.
How to Pay for Solar Panels
You can purchase solar panels outright, finance a solar loan, or sign a lease agreement. Each option has pros and cons, but financing tends to be the best thanks to its low initial cost. Let’s go over each choice in more detail.
Outright Purchase
Purchasing solar panels outright is the most inexpensive option in the long term because you don’t have to pay interest. No financing means no monthly payments, so you’re eliminating your electricity bills without adding a new payment. However, solar panels are a large investment, so outright purchases aren’t an option if you don’t have the cash.
Solar Loan Financing
Financing avoids the problem of lacking the upfront funds for solar, and the interest rates tend to be relatively low. Your options vary depending on your credit score, but financing is the most accessible way to install solar panels.
Solar Lease
Solar leases help consumers avoid the upfront cost of installing solar panels. Instead, you sign a leasing contract with a solar company that then installs panels on your home. You don’t own the panels, but they produce electricity to offset your power bills. These arrangements are dubious at best, as they lock you into a multi-decade agreement that makes it difficult to sell your home.
How to Choose a Solar Company to Finance Panels
A lot of research goes into choosing a solar company, but the main thing to look for is reputation. When financing, see what reviews say about the loan process. Did the solar company’s loan partner use deceptive practices, or have they been difficult to contact? Those are red flags if you’re financing.
You can also ask solar companies who their financing partners are and then read reviews for those companies. There might not be many Google reviews for financing partners, but they tend to have Better Business Bureau profiles that have a ton of information. Some solar companies work with multiple financing partners, so be sure to clarify which one you’re getting a loan through if that’s the case for you.
Once you know a solar company’s loan providers, you can make a reasonable choice about who to work with. You shouldn’t focus solely on financing partners, though. You should also read reviews about the solar installer itself, verifying the quality of their work before you make any contractual agreement with them.
Find photos of the solar company’s previous installs and schedule a call with some of their reps. They’ll give you a detailed breakdown of their experience, process, and results. Repeat the process with a few solar installers, and you’ll be able to find a company that fits your needs.
Solar Financing FAQs
Do Solar Companies Offer In-House Financing?
Generally speaking, solar companies do not offer in-house financing. You may find the occasional installer able to do so, but those are exceedingly rare circumstances.
What is the Minimum Credit Score for Financing Solar?
There isn’t a minimum credit score for solar financing per se, but most companies won’t work with customers below 650. Of course, that depends on many factors, and the number varies depending on who provides the loan. Your best option is to contact a solar company and ask about the minimum requirements. This will help you understand which solar company you should choose to finance panels.
Solar can save you a lot of money, but it’s also a big financial commitment. Make sure to clarify each point of your installation agreement and loan terms before you commit to anything.
Is Financing Solar a Good Idea?
A financial advisor is the only person qualified to tell you if solar financing suits your situation. They can walk you through the numbers, help you make sense of the long-term savings, show you how solar energy impacts your property value, and more. Solar panels help you save thousands of dollars in the long term, especially as utility companies aggressively hike prices. Renewable energy is the way to go if you want to mitigate the cost of electricity bills.
Can Local Solar Installers Finance Panels?
Yes, local solar installers finance panels. Virtually all solar panel companies offer some form of financing option, regardless of whether they’re a national or local brand. If you find a solar installer that doesn’t offer financing, consider it a red flag. Financing partners won’t work with companies that have exceedingly poor reviews.
Why Is Solar Panel Financing Expensive?
Solar panel financing may seem expensive, but it saves you long-term money. Utility prices have skyrocketed in recent years, as strain on the electrical grid for utility companies to invest in infrastructure improvements (albeit slowly). Utility companies then pass those improvements’ costs onto consumers, leading to major price increases.
Solar panels allow you to produce your power, which you don’t have to pay for. You occasionally have to draw from the grid, but you can cover most of those costs via Net Metering. With Net Metering, you earn credits for the excess energy you generate throughout the day. Those credits are sent back to the grid to power other homes.
Contact Purelight Power for Solar Financing
Purelight Power offers a robust suite of solar financing options, including a $0 down program. We’ll help you understand how renewable energy can benefit your home. Our reps take the time to understand your needs and concerns so we can design a system that fits them. Our emphasis on customer service has made us one of the highest-rated solar installation companies in the United States. Contact us today, and we’ll create a specialized design proposal for your home.
