Many building owners are currently faced with an important issue related to ensuring a reliable and sustainable energy supply. Given the pollution situation and the gradual depletion of fossil sources, connecting to the public grid is not the best solution to achieve the goal. The most decent option would be modern solar systems in the amount needed to generate a sufficient amount of electricity.
They have dozens of advantages over traditional power plants and can provide the need for 25-30 or even more years. However, many homeowners are deterred by the relatively high cost of structures and their installation. Amounts vary depending on the manufacturer and technology. However, SEIA was able to calculate the average cost. According to the organization, it is approximately 25 thousand dollars. Not everyone can pay such an amount at once. However, there are several other financing options. Let’s consider them in more detail.
What Solutions for Financing Solar Systems Are Available to Buyers?
Before considering options for payment for the use of structures, it is worth determining the cost in your region. To do this, it is enough to search for ‘solar companies near me’ and familiarize yourself with the financial options that they provide to buyers. Each of them has different conditions and assortment. To choose the best solution, you need to study the information in detail and compare the offers.
Most buyers first of all pay attention to the quality of solar systems. However, financial benefits are also important for them in the case of purchasing structures. If you also want to find the most profitable solution for yourself, we suggest that you find out more about the existing options for financing solar systems.
Lease Agreement for Solar Energy
This option can be an optimal solution for buyers who cannot use a solar loan or purchase structures with their funds. In this case, solar energy providers offer to rent solar systems for a certain period. Under the terms of this type of solar panel financing, the client does not receive full ownership of the system, but only the opportunity to use its capabilities.
This service involves making a monthly payment to the supplier company of a certain amount of money. The rate is fixed and specified in the contract concluded between the parties. Most tenants have been using the service for an average of 10-20 years. An important feature is that maintenance and repair responsibilities are kept directly with the solar system supplier.
It is his representatives who periodically check the condition of structures and the level of their functioning, and, if necessary, perform technical work. In addition, most companies include power production guarantees and general installation warranty coverage in the contract. One of these provisions is that the leased solar systems will produce the required amount of electricity.
If this provision is violated, the supplier undertakes to repair or replace the installations. Among the disadvantages of this method of solar panel finance, one can highlight the lack of full ownership. This means that there may be problems when reselling the house with structures, and the owner will not receive financial incentives. However, by choosing this option, the owner does not need to look for a large amount of money for the first payment.
Use of Solar Credits
Another financing option for solar systems can be a solar loan. This solution should be chosen by buyers who do not have the opportunity to pay the entire amount at once. However, when considering this method of financing, it is worth paying attention to compliance with all the criteria of a financial institution. It is about credit history, source of income, and other important nuances.
If all the requirements are met, the owner can count on several advantages provided by loans for solar panels. The main one is the reduction of the financial burden. After all, the loan involves dividing the entire amount into a certain number of payments. According to the terms of the contract, they must be paid regularly every month. The number of such payments, the rates, and the amount of payments are indicated directly in the loan agreement.
Conditions may be different – it all depends on the policy of a specific financial institution. However, a credit rating is important for any of them. This is the main factor that is taken as a basis for the formation of loan rates. If the rating meets the requirements, then you can count on relatively low interest on the loan. If there were problems or cases of late payments in the past, the financial institution may set higher rates.
That is why you need to first learn all the details about the loans and analyze your current credit rating. This will help to avoid significant overpayments for the purchase of solar systems. If you have an excellent credit rating and the right to reduced rates, then you can use another important advantage. It is about full ownership.
In the case of a solar loan, the financial institution provides the required amount of funds for the purchase of structures. Accordingly, you become a full owner and can receive financial incentives. In addition, during the resale after the loan is paid off, there will be no problems with registering the ownership of the solar systems.
Agreements on the Purchase of Solar Electricity
If you consider solar finance options that do not involve large financial investments, you should pay attention to PPA. This is an agreement that provides an opportunity to appreciate the benefits of solar electricity without the transfer of ownership. At first glance, the solution looks like a solar lease. However, there is a significant difference between them. It consists of the fact that you need to pay only for the power that was provided by the supplier.
In this case, there are no rental payments for each installation. Hence another important feature – your bill will fluctuate depending on the amount of electricity used. However, it will be significantly less than the amounts to be paid for leasing or solar loans. In addition, the contract does not provide for repayment terms.
The term of using such a service can also be quite long (20-30 years). The downside to solar power purchase agreements is that they are not available in all states. In some regions, there may even be restrictions on contract terms (for example, system size limits).
Purchase With Own Funds
Completes the list of options for financing the purchase of solar systems with equity. It is the most profitable, as it allows you to get several advantages. Among them is the transfer of structures ownership, receiving financial incentives, and no problems during resale. Purchase and sale of constructions take place according to the standard procedure.
How To Compare Possible Financing Options for Solar Systems?
Almost everyone who wants to install environmentally friendly and reliable solar energy generation systems in their home faces difficulties in choosing a financing method. To simplify the search for the best solution, it is worth comparing the main conditions and opportunities that each option provides. For example, if you have enough money and want full ownership, then a home equity purchase is fine. If financial options are limited, then loans, solar power purchase agreements, and leases should be considered.
Modern suppliers of solar technologies are trying to create the most comfortable conditions for the opportunity to use the structures. This also applies to the financial aspect. Companies offer several options for payment, each of which has its advantages and disadvantages. The most profitable of them is the purchase using equity capital. However, in the absence of a large initial sum, credit options, and lease agreements can also be considered.