Solar Power Financing Options
In general, a homeowner in Massachusetts and Rhode Island has two means to acquire a solar energy system for their home; Buy to Own and Lease to Save. At a minimum, each method will deliver immediate savings in the first month of creating substantial solar power.
Choosing the right path to solar freedom depends on your current needs and your long term goals. If you are interested in maximizing the financial returns of your solar energy system, buying the system is probably a better decision for you. However, if you prioritize an easy, maintenance-free way to reduce your energy bills and help the environment, you should consider a solar lease. Here are some features and distinctions that will help you make an informed decision:
Buying to Own a Solar Energy System
A cash purchase of a solar energy system delivers the largest and most consistent savings over time. A well-sized system can offset most or all of your electricity needs on average over a 12 month billing period. Your savings in the first month and throughout the nearly 30 year lifetime will be steady, and your utility energy purchases will be minimum.
A solar loan offers the buyer the option to spread out the costs over a longer period of time, while maintaining full ownership. Increasingly more lenders are participating, from traditional institutions modeling their offerings along the lines of other home improvements, to solar industry specific products by knowledgeable financial experts. All are designed so that once the loan is fulfilled, the savings profile reverts to the same one enjoyed by making a cash purchase.
Beyond Solar Ownership – Leasing to Save
For those who want the simplest path without necessarily needing to maximize their solar energy savings, there are options outside of a purchase. Solar leases and Power Purchase Agreements (PPA) offer the buyer something akin to a rental. A third party owns the solar power producing hardware, may contract for a minimum solar energy production level, and documents a very predictable payment schedule throughout the life of the lease or PPA. Some of the features and highlights include the following:
- Zero down or upfront lease buy down options;
- Specific monthly payments are defined, including periodic escalators. You know what you have to pay throughout the life of your agreement;
- The third party owners enjoys all of the financial benefits of ownership, including all of the incentives;
- The lessor in effect ends up with predictable, lower total electricity costs and the comfort of knowing their household energy consumption requires less fossil fuel generation to cover.
More About Solar Loans
Lending competition has created a variety of solar loan products that you can use to finance the installation of your solar panel system. They can be divided into two broad categories: secured solar loans and unsecured solar loans.
Traditional lending institutions provide secured loans, often with reasonably low interest rates. These are commonly packaged as home equity loans, lines of credit, and home improvement loans. Qualifying for such loans requires the usual creditworthiness and application process. For some families this may be limiting, however this is the more common loan method available.
Because of the steady solar energy growth records for Massachusetts and Rhode Island, a number of new financing options have become available. These are designed specifically for residential solar power buyers, and they offer features and terms especially tailored for the market. They are designed to help more homeowners go solar through low payments and flexible rates.
Solar Financing Entities
Southern Light Solar offers financing options through one such lender, Bluewave Solar, among others. Bluewave Solar offers packages that may require zero upfront payments, no payments until your system is operational, and flexible loan interest rates. One such package offers a very low introductory interest for the first 5 years and no prepayment penalty. Loan terms for as long as 15 or 20 years are available, as well.
A Final Word on Solar Loans
Massachusetts solar incentives and Rhode Island solar incentives are nation leading. Combing these with a broad selection of loan options gives a local solar buyer plenty of options for significant savings. The value of the incentives means that a homeowner may be able to select financing for longer terms and for greater amounts without compromising the ability to recover their costs and continue big energy savings in significantly less than 10 years.