Cash – Solar system is purchased by cash or check by homeowner (HO). HO goes on Net Metering plan with utility.

Home Equity Loan – most cost-effective way using your home as collateral. Rates average 3-5%, interest paid is tax deductible. Loans range from 5 to 20 years with fixed rates. Equity lines last 10 years and have variable rates.

Solar Loan – unsecured and secured solar loans. Unsecured your home does not act as collateral and interest in not tax deductible.  May have high fees. Fannie Mae offers financing to new and refinancing HO’s.

• HO owns the system.
• HO goes on Net Metering plan with the utility.
• Greater long-term savings
• System can be paid-off

Lease – HO leases the solar energy equipment.  HO still has Net Metering with the utility.  Lease contract averages 20-25 years. Leases have a flat payment each month.

PPA (Power Purchase Agreement) – HO purchases power from solar company offering PPA contract, 20-25 year terms average.  HO does not own or lease solar equipment. Payments are based on how much energy the panels produce.

• No Up-Front Costs – No down payments, zero down with most PPA and Leases.
• Maintenance – The PPA company will monitor system performance, repair and maintain as needed.
• Selling Home – HO can transfer remaining contract to new HO. Or HO can purchase the system and include in sale of property.
• No Tax Incentives – Since the HO does not own the solar system there are no tax incentives associated.
• Price Escalator – The amount the HO pays each year will increase. Usually between 3-5% defined in contract.

Most solar systems are purchased with cash or loans, some through leases. SolarTech offers all three purchase types.  Making an informed decision is the best way to ensure you make a smart financial decision for your future.

Need more information to know what is right for you, ask to speak with one of our solar specialists.

References:
https://www.energysage.com/solar/financing/solar-leases-and-solar-ppas/
https://www.solarreviews.com/blog/pros-and-cons-of-leasing-solar-buying-ppa-agreements
https://www.seia.org/research-resources/solar-power-purchase-agreements
https://www.consumerreports.org/energy-saving/real-cost-of-leasing-vs-buying-solar-panels/