The use of solar as an alternative to traditional energy sources is becoming increasingly popular. However, because of the initial costs involved, many people think that they can’t afford it.
This doesn’t have to be the case. In fact, there are several options available for financing solar energy; you just need to find one that works for you. In this article, we will provide tips on how to find appropriate financing options for going solar.
Compare Quotes
The first thing you should do in trying to find a solar provider is compare quotes from different contractors. The average cost of installing panels in the US is just over $25,000, although individual costs vary depending on type and size.
You can find a list of qualified installation companies through the Solar Energy Industries Association, which maintains lists of companies in every state. Through it, you can find company ratings and general information.
You can also talk to people who have had panels installed and get their opinions on which are the best companies in the area. Also look on local directory sites for service people and see which companies get the best reviews. Experts recommend getting at least three different quotes before you make a decision.
Financing Options
There are financing options available for people who need it:
- Solar Panel Financing for Customers. If you get solar panel financing for customers, you will have different options for how to pay it back. Depending on your budget, you can choose split payments; buy now, pay later; pay in installments, or other options.
- FHA or Fannie Mae Loans. These loans can allow you to both purchase solar panels and refinance your mortgage or other home renovations simultaneously. They might include comparatively high interest rates, though.
- Home Equity lLoans or HELOCs. Home equity loans and home equity lines of credit (HELOCs) are based on the amount of mortgage that you have already paid on your house and can be used for various purposes, including solar panel installation. HELOCs work like credit cards against the available equity of your home. They are most suitable for people with substantial equity in their homes.
Available Incentives
If you choose to go solar, there are incentives offered by both state governments and utility companies that you can take advantage of, including:
- Performance-based iIncentives (PBIs). PBIs pay homeowners for solar energy produced and sent to the electric grid over an agreed-upon period of time. Different states offer their own PBIs.
- Solar Renewable Energy Certificates (SRECs).SRECs are tradable certificates or credits representing electricity generated from solar energy. People can earn and sell SRECs as they generate electricity. Only certain states offer them, though.
- Utility Rebates. Electric utility companies offer utility rebates as a way of encouraging homeowners to install solar panels. With them, people can receive incentives directly from a utility provider. They can take either the form of cash or bill reductions.
Community Solar
If you live in an area where multiple people install solar panels, you might consider getting involved in community solar. Community solar is a purchasing program within a designated geographic area in which people and businesses benefit from solar energy captured and distributed in a common location.
People either subscribe to a local program, or sometimes own a portion of the energy generated by a solar array. They pay a monthly fee for the energy they receive, and in turn receive an electric bill credit commensurate with their share of the community system.
This type of system can be advantageous for people who cannot or are not interested in installing their own panels. While community solar systems don’t exist everywhere, they are becoming more popular in different parts of the country, with projects in 41 states and DC.
Group Purchasing
Similar to the idea of community solar, you might consider group purchasing, also known as cooperative purchasing programs. When a group of people in a common community get together to purchase solar panels in bulk, the cost is consequently reduced. These programs differ from community solar in that homeowners are still attaching panels to their own houses, rather than having them in another location.
A downside of group purchasing is that all of the people who choose to participate must agree on a company and a single option for equipment. If there are variables that distinguish your needs from those of your neighbors, you will need to find a way to compromise. It also restricts competition among companies as people are forced to make a common choice.
Tax Credits
There are both federal and state tax credits available for people who install solar panels. People who have panels installed before 2032 and meet specified criteria are eligible for a federal tax credit of 30% of the installation cost. After this, the amount will decrease slightly year-by-year over the next several years. State tax credits vary from state to state.
DIY
If you don’t want to use a company to install your solar panels, you might be able to do it yourself. The most obvious advantage of this is that you won’t have to pay a company to do the work for you. You can potentially save thousands of dollars by doing the job yourself, and you will also have the satisfaction of having completed a major project on your own.
There are considerable risks involved, though. First, it takes a significant amount of time and effort. Depending on the area you want to cover, it can take between one and four months to complete. You also need to make sure that you have really mastered the skill as poorly constructed panels can result in leaks and/or damage to your roof. In addition, if you have problems following installation, you will not have customer support to rely on.
Final Thoughts
Switching to solar as an energy source can be a very worthwhile and rewarding thing to do. The costs involved don’t have to be overwhelming. If you take the time to research your options carefully and make an informed decision based upon your personal needs and budget, you should end up with the right financing option for you.
Article Submitted By Community Writer
