As of 2024, more than 4.2 million homes in the US have solar panels. With that adoption rate, the odds are that you have a neighbor, friend, or family member who’s gone solar, and you may be looking into solar panels yourself. But considering solar and paying for solar are two different things. Here are some tips to help you determine whether you should finance solar panels or buy them outright.
Pros and Cons of Solar Panel Financing
If you want to own your solar panels, you can buy them outright or finance them. Some companies offer leasing agreements, but you don’t own the panels in those situations. Both owning and financing solar panels have advantages, but choosing which option is best for you ultimately depends on how much cash you have. A financial advisor can look at your situation to help you make the best possible choice, but let’s review the pros and cons of financing.
First, the pros. Financing solar panels allows you to pay for your system over time rather than making a lump sum payment. You’re still eligible for the federal solar tax credit, which can reduce your monthly financing payments if you apply your savings to the loan. Given that solar loans can have options for as little as $0 down, most homeowners are eligible for financing.
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The only con is that the loan will have an interest rate attached, so you’re not saving as much as you would by buying panels outright. But you’ll likely still save money even if you’re paying interest on the loan. According to Energy Sage data, homeowners with solar panels can save between $20,000 and $90,000 over the panels’ lifespan. That means you have some wiggle room for your net savings.
How Do You Finance Solar Panels?
To finance solar panels, you must first get designs and quotes from solar installers and then apply for the estimated sum. The precise process varies between providers but is similar to other loans. You submit your financial information, the lender runs a credit check, and you receive an approval or denial a short time later. You’ll be quoted an interest rate and other financing terms, and then you’re all set.
The legwork for the application is primarily from gathering financial documents. Loan providers may ask for a range of documentation, like bank statements, to verify your eligibility for a loan.
If the process seems overly complex, check with your solar installer to see if they can help you interpret the loan agreement and documentation you need. If you’re working with a reputable company, their customer service department will help answer any questions. Take advantage of helpful customer service; you don’t want to get locked into a contract you don’t fully understand.
Are Solar Panel Loans Really Worth It?
Yes, solar panel loans are worth the cost — if you aren’t able to pay for solar panels outright. However, you should consult a financial advisor before financing solar panels. They can analyze your financial information and help determine if solar is feasible.
Solar impacts your finances in many ways, increasing your home value while reducing your month-to-month expenses. It takes a few years for solar panels to pay for themselves, but it’s the way to go if you want long-term savings. These savings are one of the primary reasons solar has been adopted so quickly in the US, with 18% of single-unit housing projected to have solar panels within the next decade.
Purelight Power Can Help
If you want personalized advice on solar financing, contact Purelight Power today. Our representatives will walk you through the entire solar process, from the initial consultation to the flipping of the final switch. We pride ourselves on customer service and communication, so you’ll always feel in the loop.
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