What Options Are There To Pay For Solar?
What options are there to pay for solar?
I always refer to the various ways to finance your panel purchase but don’t usually mention what they might be. So, this is just going to be a short post about the types available. Here you’ll simply find the overview of the different options available. To find more detail on each one, how they stack up against each other, and what’s best for you, you can check out our website and our more technical blogs.
I should start with the options themselves, I’ll list them out:
- Outright purchase
Straight up cash in hand purchasing. If you can afford it, this is usually the best option. With no drawbacks beyond the upfront payment, it’s the safest long-term investment. This means the panels you’ve bought, all the power they produce and the benefits they bring, are all yours.
Taking a loan:
As with anything you put on your house, there are plenty of organisations willing to provide a loan towards solar panels. Some for profit, others for environmentalism, be sure to shop around and make sure you get the best company. Whether you get a secured or unsecured loan is up to you, depending on your financial situation. The interest cost might affect the payback term of the panels of course but this can be calculated upfront.
Solar lease or purchase-power-agreement (PPA), both are more or less the same thing and you’ll see them used interchangeably in most cases. The idea is that the costs of the system are covered for you, including maintenance, and you still benefit from the reduced energy bills for the duration of the contract (up to perhaps 20 years). The downside is that everything other than the energy savings (rebates, tax breaks, and financial incentives etc.) also belong to the provider investor company. In a PPA you buy the electricity produced by the panels from the installer company at a set indexed linked rate for the term of the agreement – eg 20 years – this will be a cheaper rate than your normal cost for electricity from the grid. Hence you save money with no upfront installation cost and this is often pretty good for a business looking to go green. If you are only interested in reducing your bills, and your roof is suitable to the investor, this is the cheapest upfront cost as it is zero. You may also have the option to buy the system fully at a later date.
Now as I said there’s more nuance to these than what’s here. For more information check out some of our more detailed posts. But I hope this has helped you understand a little better how you might want to finance your own panels in the future.