The downside is that solar panels aren’t cheap.
Theaverage costof an8-kilowatt residential panel systemis $3 per watt.
One way to pay for your home solar panel system is toget it financed.
Manysolar companieswill even offer loans or other financing options as part of the installation process.
Here’s what you oughta know and how to get the best deal on a solar loan.
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What is a solar loan?
A solar loan works similarly to other installment loans, such aspersonal loans.
You agree to pay back the loan over time, with interest.
The loans vary by solar company, and may feature different monthly payments, interest rates and loan terms.
They might havedifferent credit and financial requirements.
One perk of getting a loan with a solar installer is that it’s convenient.
You apply through the installer, and make the loan payments through them.
“It’s a fairly straightforward app process.”
How to get a loan for solar panels?
You’re responsible for making monthly payments in installments.
Personal loans come with different terms, interest rates and fees.
They can be secured or unsecured.
Installer financing:This is a loan you get through the solar company that installs your home solar system.
The loan amount, terms, fees and interest rates vary by the installer.
Installer financing might allow you to also tack on financing for energy-efficient upgrades to your home.
That way, you might reaptax incentives, deductionsand rebates.
Home equity loans:Ahome equity loanis when you borrow money using your home’s equity as collateral.
Equity is the difference between what you still owe on your mortgage and the current value of the home.
But if you fall behind on payments, you risk losing your home.
And you also risk losing your home if you have trouble keeping up with payments.
A major difference is that aHELOCworks in the same fashion as a credit card.
HELOCs typically have variable interest rates.
Green banks often have a data pipe of installers, electricians and installation providers.
“They also have initiatives to provide assistance to low-to-middle income families.
What are the types of solar energy loans?
Solar energy loans fall within two main categories: secured or unsecured.
The interest rates can be lower and loan amounts can be higher for secured solar loans, too.
Unsecured loans, on the other hand, don’t require collateral.
The major advantage of this option is not needing to risk a valuable asset.
Plus, you save on interest fees.
There are currently about 1,600 community solar projects across the US.
The company is responsible for installing and operating the system at your home – they own the system.
A pro of leasing is that you usually don’t have to worry about doing any maintenance.
Under certain agreements, you might even get credit for any excess electricity generated.
The main difference is that with a lease, you pay the same amount each month.
With a PPA, you pay a rate per kilowatt-hour of energy that’s based on your usage.
You don’t have to worry about maintenance, and you only pay what you use.
A downside is that you don’t get to keep the system for your home.
“It’s a really good idea to really look at your monthly electric bill,” Persaud said.
“Let’s say your utility bill is $200 a month.
FAQs
Is it worth getting a loan for solar panels?
What pop in of loan is a solar loan?
A solar loan is essentially an installment loan.
These loans might have a fixed or variable interest rate, and they might be secured or unsecured.
You’re on the hook for monthly payments, which include the principal, interest and any fees.
How long is a typical solar loan?
The term of a solar loan ranges from two to 25 years.
The length of your loan depends on the lender, and also on what term you get approved for.
