Solar photovoltaic (PV) systems can almost eliminate your electricity bill. This benefit includes the chance to take advantage of local and federal tax incentives and/or solar renewable energy certificates (SRECs).
After doing your research you’re considering going solar. As solar energy systems have gained traction so have the options to finance their installation.
How can you immediately tap into the money-saving potential of getting a solar system?
Solar loans are the best way to finance your solar-home energy system. In addition to potentially having no up-front costs, solar loan financing saves you more over the long term.
What are Solar Loans?
A solar loan is similar to a home improvement loan that you would get to finally get that deck or garage you’ve been wanting.
The difference is that with a solar loan program you are making an investment with both immediate and long-term benefits along with the environmental factor.
Besides this solar energy loans financing has many of the same considerations including:
- They can be unsecured and secured – With a secured loan, you offer an asset as collateral, such as your home. An unsecured loan doesn’t have this requirement but often come with higher rates due to increased risk.
- Shorter terms mean higher monthly payments, but lower costs over the long-term.
- The lower the interest rate, the lower the costs for the borrowers.
Understanding Your Solar Loan Options
When looking for the best loans for solar financing, there are things to consider. Consider your interest rate, the amount you want to pay per month, and whether you’ll eventually sell your home.
Solar loans can vary from 5 to 20-year terms and have fixed monthly payments. The amount you are willing to pay monthly will impact both the interest rate and the term length of the loan.
Considering Your Solar Loan Sources
Along with more traditional bank loaning sources, these are other sources to consider:
- Credit Union – Credit unions that offer solar panel loans can often offer them for lower interest rates than other sources
- National lending institutions – Offer specialized loan products for home solar panel systems, this includes leading specialized clean-energy lenders, such as Loanpal
- Solar manufacturers – Can offer loans through their partnerships with solar installers
- Utilities – Can offer to finance your solar system while allowing the borrower to pay off the loan on your electric bill
For those with low credit scores, there are other options, such as the PACE (Property Assessed Clean Energy) government program. It finances projects geared toward increased energy systems, like your solar system, for example.
Your Future Looks Bright
Switching to solar energy is a good investment in both your home and the environment.
Solar energy offers the opportunity to save $10,000-$30,000 over the lifetime of your solar system. Solar loans are one way to take advantage of the many benefits offered by going solar.
Looking for more information on solar energy? Stock up on your knowledge in our News section.