Numerous solar companies tout their “free solar” programs in their ads. If you’ve been researching residential solar for some time now, you might have realized that these ads mean that there’s no upfront cost involved. Instead, you pay a monthly payment that can be either fixed or fluctuating.
In any case, you can indeed avoid paying a sizable cost upfront for your solar installation and instead, resort to monthly payments for the long term, such as 5 years or even 25 years.
However, the question is: is it the right option for you?
The answer depends on several factors. The offer itself can take several different forms, and come with a variety of terms. Here’s what you should look out for:
- Zero-Down Solar Arrangement Types
Zero-down solar just means that there’s no upfront cost for you to pay. It doesn’t reveal any information about the arrangement itself. It could be a solar loan with no down payment and only monthly payments spread out over several years.
It could also mean a lease agreement, wherein you pay a “fixed” monthly payment, much like a car lease. There’s a third option – a power-purchase agreement (PPA). It’s similar to a lease agreement, except that the monthly payments are not fixed. They are calculated at a fixed rate based on the amount of solar energy you generate.
So, discuss the arrangement with your solar company and understand it thoroughly.
- Interest Rates
If you are going for a solar loan, it’s important that you have a firm grasp over the interest rates you are paying. If the interest rate is so exorbitant that you end up losing all the cash savings you realized from solar adoption; then it’s pointless for you to go for a solar loan.
- PPA Rate
PPA agreements charge you a fixed rate for using the solar energy produced by your solar system. The more energy generated and used, the more you pay. However, the PPA rates are usually substantially less than utility prices. Also, you can negotiate a multi-year lock-in period for the price, so that they don’t escalate fast.
Know your zero-down solar arrangement, understand its terms, and then decide whether it’s the right choice for you. Also, it literally pays to have a high credit score. If you do, then you can attract solar financing at lower interest rates.
Talk to Green Power Energy to discuss the various solar financing options available to you, and understand how they can help you in your unique situation.