Why consider home solar financing?
If you don't have solar panels yet, you probably feel like your energy status quo falls short in more than one way. You want a clean energy source that actually belongs to you, helps the climate, and makes a good investment. But you’d like a monthly payment structure so you can essentially pay-as-you-save, with no hefty upfront payment due.
That’s why we recommend financing. Solar loans put solar panel installation ownership within reach for those who would rather not purchase all in cash. And why pay all at once, when financing is so flexible and offers reasonable terms and puts your solar tax credit to use?
Residential Solar Energy Financing Types Explained
Today, there are different products and types of ways to get a loan for your solar than you might think. We'll break down the most common ones.
Same-as-Cash Consumer Financing
With a same-as-cash product, homeowners don’t need to make a payment until they receive their tax incentive dollars. While the time that money is due is delayed, the benefits from clean, reliable solar energy and utility savings start right away once you sign up and get installed.
Options for Short Term and Long Term Loans
Because most solar customers would like their solar loan payment to come out lower than their pre-solar utility electric bill, that’s what we aim for when selecting a product such as this for a client. While factors like unseasonable weather that makes the air conditioning work a little more than expected can come into play (or even that house guest who runs a secret space heater and blow dries their hair everyday!) for the most part your combined utility bill and loan payment can usually still be lower than your bill used to be for the same month without solar.
What kinds of loans does Ipsun Solar offer now? We’re happy to talk that over with you when you request a quote, just be sure to mention that you already glanced at this article and let them know what kind of funding method you think you’ll likely prefer.
Home Equity Lines of Credit
A Home Equity Line of Credit (often acronymed to HELOC) often comes up as a preferred option for a home improvement project, and isn’t solar a prime example?
Financing a solar investment with a home equity loan is a natural choice. Because of utility cost savings driving the return, and given the low interest rate, any homeowner who hasn’t already taken out a HELOC should explore this option.
Here’s a creative approach that more than one of our recent customers has chosen: go with 12 months same-as-cash, get back the solar tax credit from the taxes they would have owed, then use their home equity line of credit to settle the solar loan balance, applying the savings from their utility bill to pay off that line of credit. Let us help you craft a funding method like this or talk you through the many options available to you.
A Final Note: Solar Loans Are Not Solar Leases
Like any solar ownership model, solar purchased on a financing plan adds value to your home.
However, there’s a critical difference between customer-owned, financed solar panels and solar panels leased from the installation company. While solar panels often catch the interest of a buyer, once a seller discloses that the solar is leased that attention may shift to a more negative than positive tone.
This is because different leases may be structured to offer savings that’s better in the short term than long term. Over time, the lease terms may include fees that escalate, on the theory that as utility rates increase the lessor (the resident) can afford to pay a little more to their solar leasing company, this can hit the purchaser to an unexpected degree.
In order to sell the home with the solar lease in a timely manner to the right buyer, the seller may have to buy out their lease, all because they chose a no-upfront-cost solar lease that looked attractive at the time. How to avoid this but still get an affordable contract for owning solar? Choose a loan rather than a solar lease.