A solar power installation offers handsome financial returns, clean energy, and freedom from worries about power outages. Meanwhile, solar financing options have evolved with the widespread adoption of solar power. Solar companies today offer no-money-down solar loans, solar leases, and PPAs that have become hugely popular with homeowners.
These $0 down financing options are definitely a reality. Here is a quick overview of everything you need to know about the available financing options
Understanding the Different Financing Options
$0 Solar Loan
You are borrowing money from a solar installation company to install your solar power system. For a no-money-down solar loan, you do not pay any money, i.e., a down payment, at the time of installation. You make monthly payments that are calculated depending on the following factors:
- Cost of Installation
- Term of Loan
- Rate of Interest
- Type of Loan (secured or unsecured)
Since you are the owner of the solar installation, with a $0 solar loan, you are eligible for all the tax rebates and the federal tax incentives provided by the government.
$0 Solar Lease
When you sign a $0 solar lease, you rent the system from the solar leasing company. You are not paying any rent upfront, hence the $0 down lease.
Once the solar system is set up, you are expected to pay a fixed monthly rent for the installation. The rent is determined by the amount of electricity your solar power system produces. You are essentially renting the solar power system and using the total solar power generated by the system. The rent you pay is 10% to 30% lower than the utility rates.
Since the leasing company owns and maintains the hardware, they get all the rebates and incentives associated with solar energy use.
PPAs work exactly like a solar lease, albeit with one critical difference. In a PPA, you are not paying a fixed monthly rent but a fixed rate (per kWh) for the electricity you use. That is your rent for the solar power installation. This is exactly the same arrangement you have with your utility company. You pay for every unit of electricity you use.
With a $0 PPA, you do not have to pay the solar installation company any money. The rate agreed upon in the contract is your rent, which is again 20% to 30% lower than the standard electricity rates. Again, the solar company gets all the incentives and tax benefits.
$0 Down Does Not Mean Zero Cost
$0 Down loans, leases, or PPAs do not mean that the solar panels are provided to homeowners free of cost. There is a cost attached to the solar power installation, but the homeowners do not have to pay it in lumpsum or upfront.
This allows more homeowners to opt for renewable solar power even if they do not have the resources readily available.
Choosing the Right Solar Installation Company
When you opt for solar financing, it is of paramount importance that you choose a reliable solar installation company. You should read the fine print in the agreements you sign to avoid any problems in the future.
Interested in solar for your Hutto property? Contact us today and you’ll take the first step towards harnessing the power of clean, renewable energy while enjoying financial savings and peace of mind. Our knowledgeable experts are ready to answer any questions you may have and provide a personalized solar solution tailored to your home and budget.