Many solar companies offer flexible financing options that make installing solar panels less expensive. Common options include rent, loan, power purchase agreement (PPA), and full down payment.
PORRIDGE
With the third-party financing option, the customer pays a predetermined price for the actual electricity produced by the system, which is usually lower than local utility rates. If you choose a PPA, you can avoid up-front fees, but you don't own the system, so you can't use the 30% federal tax credit.
rent
Like PPAs, leasing is a third-party financing option, but has a different fee structure. When leasing equipment, the customer pays a fixed monthly fee which, unlike a PPA, is independent of the amount of electricity the system generates. Rentals also allow you to avoid up-front costs, but are often more expensive than PPA's and don't allow you to use federal tax credits.
lend
If you don't want to pay for the entire system yourself, but do want to own one, consider taking out a loan. These loans allow you to take advantage of federal tax credits, but they charge more expensive interest in the long run than if you purchased the system yourself.
Complete purchase
If you have the funds, you can save costs in the long run by purchasing the system upfront and out of pocket. This can be very expensive in the short term, but you can take advantage of the federal tax credit and avoid the exorbitant long-term interest rates associated with loans.
Home Equity Credit Line (HELOC)
HELOC allows you to borrow money on the principal to pay for your solar energy system. These rates are usually lower than traditional loan rates, so they are often the less expensive of the two. It also means you own the system and qualify for a federal tax credit.
Refinancing by withdrawing funds.
Cash back financing is another option that uses your equity. Basically, this involves refinancing your existing mortgage for more than what you owe and paying the difference in cash, which you can use to buy solar panels.
