Since solar is a relatively new industry, many homeowners still have quite a few questions regarding residential solar financing.
Luckily for homeowners across America, there is now plenty of financing available for solar power and other renewable energy projects. It is possible to get 100 percent financing so no upfront cash is needed to start saving with solar power.
The biggest question is about payment size, of course. Many simply want to know what their solar loan payments will look like. The answer to this question depends on the size of your solar loan. The following example will give some details about what the average homeowner could expect when financing solar.
Let’s take a look at a typical financing situation…
Loan Size – $15,000
Loan Term – 10 Years
Interest Rate – 5.00%
Payment Amount – $159.10
The payment on this solar loan – $159 – is about the same as what many people already pay for electricity every month. A solar panel system that costs $15,000 can offset about 90% of electricity usage for millions of American homeowners. Of course, solar panel loan rates vary based on the credit standing of a borrower. Five percent is a rate that homeowners with good credit can expect.
Instead of making that $159 monthly payment to a utility forever, many homeowners are realizing that they can make payments on a solar panel system. After ten years, or less, the system will be paid off and they can enjoy decades of free electricity.
A very high percentage of solar panel systems are still tied to the grid. There are currently very good reasons for this. Battery backed up solar panels are still not quite economical yet. Also, most utilities will compensate homeowners for excess solar electricity that is generated and not used by the homeowner. In addition to solar loan payments, a small amount is still due to a utility for grid energy and other fees.
Homeowners are starting to realize the massive long term value that solar power represents. Many people can pay off their systems quite a bit quicker than the ten year time frame mentioned here.
A solar panel system also adds many thousands of dollars to the value of a home. Homeowners that decide to or need to move within ten years, can recoup their costs by adding the cost of their solar system to the asking price of their home. Of course, a home that stays with a family will provide decades of very affordable and clean energy.
Check out the solar financing page to learn more about what options are available for solar panel loans.