“No money down” anything is almost irresistible. An opportunity to hit the road in your new car or walk into a new home without spending any money out of pocket right away could be everything you need right now. Solar companies know this, and that’s why they have also started offering no-money-down solar solutions.
No money down solar is not one product or one solution. It’s a benefit offered by multiple solar financing options. So, solar buyers should have a strong understanding of these options. Let’s take a quick glance at each of them.
No Money Down Solar Loans
When you purchase your solar solution, you can borrow money from a financing agency to fund the purchase. Traditionally, financing agencies would lend you anywhere between 70% to 90% of the value of your solar system, and you’d be required to pay the rest as a down payment.
Fortunately, some solar financing companies finance 100% of your solar purchase and let you repay them in fixed monthly installments. Such solutions are also called zero money down solar loans.
You will own your solar solution, get all the government incentives on it, and begin enjoying cost savings from solar power right away. Although you make monthly payments, they will be substantially lower than your monthly power bills. Once you make all the payments on your solar loan, you gain complete ownership of the solar system.
A solar lease is virtually the same as a car lease. You make monthly payments for your solar solution and do not spend any money out of pocket at the time of installation. You do not own the system; the solar company/financing agency owns it and maintains it instead. So, you don’t get any government incentives.
Also, the lease payments can sometimes increase nominally – about 1% to 3% – each year.
Solar Power Purchase Agreements (PPAs)
A close cousin of solar leases, solar PPAs are also an attractive option for solar buyers. You do not make any payment upfront but make monthly payments for the term of the PPA.
The monthly payments are calculated at a fixed per-kWh rate and based on your actual power consumption from your solar solution. The good news is that the power rate used to calculate your monthly payment can be up to 30% less than your utility power rate. So, even though the dollar amounts of the payments vary from month to month, they will be much lower than your utility power bills.
And The Verdict Is…
The right choice of no-money-down solar solution for you depends on your unique needs. Understand what each option means to you and what advantages they offer over one another before making the decision.