Solar panels have become a much bigger source of electricity over the last decade or two as solar system installations swelled to over 2 million between residential and commercial installations. You can likely chalk much of that up to the improvements in solar panel efficiency over the years. That gives homeowners more value in terms of utility savings, as well as making individual households less dependent on fossil fuels.
Yet, knowing that solar panels offer benefits is only part of the equation. There is still the lingering question of solar power financing. Just how will you pay for that solar panel system?
Keep reading for a quick breakdown of the more popular options.
Some homeowners opt to pay for the solar installation with cash in the bank. This may sound like an impractical option, but it could prove more viable than you expect. Prices for solar panels have steadily come down in recent years as the industry expands. That means the average cost of $12,000 may come down even more as time goes by.
You can also plan ahead by getting estimates for installation and saving up for it over time. You can set a savings goal and set that money aside over time. While you might end up financing some of it at the time of installation, you can cut that number way down.
You can also look to a variety of loans as a method of financing solar panels. There are personal loans that you take out on the basis of your own creditworthiness.
Another common option is a home equity loan. You can also explore a home equity line of credit. A line of credit works more like a credit card, rather than a loan. You can pay down the line of credit and get access to the original amount again.
Most solar installation companies will even help you figure out your options for financing solar panels. Many of them work with lenders and do in-house financing.
Another possibility for financing solar panel installation is leasing the solar panel system, rather than buying it. This works much like leasing a vehicle. You can use the system, but you make monthly payments on the equipment itself.
While the monthly payments can put a solar panel system in reach, the monthly payments often offset the savings you see on utility bills. You should discuss this option with a solar panel company to see if it’s a good choice for your home.
Solar Power Financing and You
Picking an approach for solar panel financing hinges a great deal on your own personal financial situation. If you enjoy a good salary and have money in the bank, buying the system outright can make sense. You can also save up to pay for one.
If you manage your finances carefully and have a decent credit score, you can typically get a loan or in-house financing for the s system. You can also look into leasing as an option.
Looking for more home-related finance tips? Check out our Home Ownership posts.