Option 1 - Purchase your system outright
You can pay for your solar system outright in two ways: an upfront cash payment or a solar loan. A cash purchase is the best way to maximize your savings - you'll pay upfront for 25 years of electricity, protecting you from any electricity rate increases incurred by your utility company.
Option 2 - Finance your system through a solar loan
The second ownership option is through a solar loan. Solar loans allow you to go solar and own your system with no money down. Your monthly loan cost will typically be less than what you pay for electricity on a monthly basis. With either of these ownership options you'll be eligible to take advantage of any federal and state incentives available in your area.
Option 3 - Lease panels through a PPA (Power Purchase Agreement)
A Power Purchase Agreements (PPAs) involves third party ownership of the panels. An installer will install panels on your roof and you simply purchase the electricity produced by the panels at a predetermined and fixed rate that is typically lower (by 10 to 30%) than your local utility company's retail rate.
PPAs are typically 20 to 25 years and the developer remains responsible for the operation and maintenance of the system for the duration of the agreement. At the end of the PPA term, the customer may extend the PPA, have the developer remove the system, or choose to buy the system from the developer.
With a PPA, financial incentives and rebates will go to the developer and will be built into the overall cost.
Option 4 - Finance through PACE (Property Assessed Clean Energy)
PACE loans are made possible by legislation (only available in areas where a specific financier and specific authority), allowing homeowners to incorporate the loan debt for the solar project into the property tax assessment of the home (the solar cost stays with the property rather than the homeowner). PACE financing generally allows for lower rates.
Option 5 - Solar Lease
For certain areas, utility companies will not allow PPAs, so solar leases are offered as an alternative. In a solar lease, you will lease the equipment instead of purchasing the power that the system produces.
At the end of the day, the best financing solution for your solar system will depend on your unique requirements and situation. Get in touch with us today and one of out Hohm Energy Advisors will work with you to determine your specific requirements and then ensure that you get the best offers and the optimal finance deal.