How to Pay Next to Nothing for Solar Panels

Clever financing combined with government incentives help homeowners like you afford the initial costs of solar power. In some instances, you may be able to take advantage of enough savings to obtain essentially free solar panels. Here are two ways to get your solar panels installed without any initial cash investment.

Zero Down Loans

Most experts agree that owning your own solar panel system is a better value in the long run, but the initial costs can be discouraging. Fortunately, there are many options to own a solar panel system that do not require a down payment. If you have good credit and are prepared to assume responsibility for the maintenance and repairs of your system, many lenders are willing to work out financing solutions that do not require any initial cash payment.

Your loan payments will vary depending on your situation, but some factors that can affect the payment include:

  • Interest Rates – low rates are possible
  • Repayment Term – 10 year terms have become standard for solar panel loans
  • Installation Costs – This depending on contractor’s fees
  • Closing Costs – A loan’s fees always add to the overall cost

When deciding which loan to go with, we suggest going with a provider that can offer you a monthly loan payment that is the same amount as your current electric bill (often called a “bill swap”) or slightly less. This will allow you to pay off the loan as quickly as possible without ever having to spend more money on solar than you would on your current electric bill. After the term of the loan is complete, you can enjoy essentially free energy from your solar panel system.

If you purchase a loan, you will have the additional costs of maintenance and repairs, but installers will often cover maintenance for the first 10 years after installation. And, as an owner, you will also be able to receive the 30% federal tax credit. This can help pay down the loan faster and allow you to get better financing terms.

Power Purchase Agreements

A Power Purchase Agreement (PPA) allows you to go solar with no money down and no maintenance obligation. With a PPA, you do not own the solar panels, but instead agree to buy the electricity the solar panels produce for a lower price than what the utility charges. In exchange, the company that owns your solar panel system will take care of all maintenance and repairs the system requires. These agreements are only available in some states where the regulatory environment is favorable, but in other states, a third-party lease has essentially the same features and advantages.

Advantages of a Solar PPA include:

  • No need to purchase or maintain any equipment
  • No cost to install or finance your solar panels
  • Lower energy expenses right from the beginning

The provider that you work with is the actual owner of the energy producing equipment. You simply host another company’s solar system on your property and pay them for the cheap, clean power the system produces. The company handles the installation, repair and maintenance for you.

There are some drawbacks too this strategy. You will not receive the tax breaks or other government incentives. Beyond just the savings on your utilities, the provider keeps the other financial benefits. You also must agree to a rate for your energy consumption. Sometimes these contracts include an automatic escalator schedule that slowly increases costs over time. However, the provider can pass most of the financial benefits on to you by offering you a lower electricity rate than the utility

This is the fastest and most convenient way to go solar. The risks are low, and you often have the option to purchase the solar equipment later. For homeowners, nonprofit agencies, and government entities, these arrangements provide access to some of the economic benefits of solar without any real downside, except that you will not save as much as you would if you owned the system.

To find out more about your energy solar panel options, compare installers in our network right away. We take your individual situation into account, and we match you with a solar panel provider that helps you to meet your financial goals.