When you have made your mind to go solar, the next step is figuring out how to pay for it.
Assuming you choose not to pay cash to buy your solar energy system, there are a variety of
financing options to help you purchase your solar system and start increasing the value of your
The simplest and least complicated way to get capital to go solar is through a loan, which can
save you anywhere from 30% to 60% over the lifetime of the panel installed. These loans are
somewhat similar to home improvement loans to get your property updated and upgraded such as
finishing a basement or re-doing your kitchen. Loans can be provided by a variety of lending
sources such as a bank or the solar panel manufacturer.
A solar loan is a loan taken out for the purchase and installation of the system. Many loan
providers offer zero-down solar loans where you pay over a 5-to-25-year term and options to pay
loan early without any prepayment penalty.
Homeowners are attracted to solar loans because the purchase and installation of solar panels are
a major source of utility bill saving. This savings can be used to pay off the monthly loan
On the contrary, while solar loans are considered as a convenient option, overall, the return on a
system purchased with a loan is lower as compared to the system purchased with cash and solar
loans accrue interest. The solar tax credit which is also known as the investment tax credit (ITC)
is a type of federal incentive used to claim back 26% of your total cost of your system when you
file your taxes. Note- not every homeowner will be able to benefit from the ITC.