A new era of solar technology beckons! Although Solar PVs have been in the market for quite a while, recent advances in the field – say, in the form of improved batteries and panels – coupled with the current emphasis on clean energy have seen solar emerge as an attractive way to meet the world’s growing energy demands. But there’s a catch. The idea of bringing solar power to our very home is all well and good. But what about the cost of installation? Are there any viable financing options available to us? These are some of the common questions that spring to our minds when we think of switching to solar. If you too find yourself inundated with such thoughts, worry not. You’ve come to the right place.
This blog intends to shed light on the host of financing options available to ease your transition to solar. But before delving into the details, here’s encouraging news for you: The price of solar has gone down drastically in the last couple of years. These days, you can get your Solar PV installations done by paying somewhere between $15,000 and $29,000. So, with that in mind, let’s now take a good look at the most popular and feasible financing options available to you.
1. Solar Leases
Imagine you are totally sold on the idea of installing solar but don’t have the means to bear the cost of installation. What would you do? Well, in such cases, you may opt for solar lease. This mode of financing allows you to have the solar installed without you needing to pay any cash upfront. Instead, you are required to pay a monthly installment to your contractor. Typically, the lease term ranges from 15 to 20 years, after which you’ll get to decide whether to extend the term further, purchase the panels at a discounted price, or have them removed completely.
A word of advice: Before getting into an agreement with your contractor, make sure you review all the terms and conditions of the lease, including the matters of maintenance, replacements, etc.
2. Power Purchase Agreement (PPA)
Power purchase agreement or PPA works pretty much like a solar lease, with the main exception being you don’t pay a monthly installment; instead, you pay for the electricity you consume. To put it more precisely, you get to purchase the electricity generated by PV on a per-kilowatt-hour basis. Note that this amount will usually be much lower when compared with your standard retail electricity bill. And just like a solar lease, the contract is signed long-term, and you won’t be required to pay a hefty sum upfront.
In case you are opting for a PPA, remember to carefully compare your current electricity bill to the proposed rate by the company offering the PPA.
3. Solar Mortgages/ loans
As you can see, both solar lease and PPA, despite their numerous advantages, still don’t allow you to own a PV system. They belong entirely to the company that offers the deal. All you get is the opportunity to experience solar power first-hand. But, what if you are the kind of person who wants to have the cake and eat it too? Well, in that case, the best option is to go for Solar Mortgages/ loans. On paper, solar loans aren’t any different from other loans. You’ll have to pay a monthly installment and interest on the principal borrowed. Applying for a solar loan is also very easy. Some lending institutions ask for collateral, while others are quick to sanction unsecured loans. What makes solar loans a popular choice is that at the end of the day, you get to own a PV system. And that is massive.
So, these are the three most popular options that you can look into as you make your switch to solar. Remember, we have at our disposal an inexhaustible reservoir of clean energy in the form of the sun. And such incentives go a long way in encouraging us to tap into this enormous power source!