To ensure you get optimum results on your solar projects, it is important to find the right solar financing. There are different options to choose from when it comes to the installation of a solar power system for your house:

1. Cash Purchase

This is a good option if you have enough cash to pay for the entire installation system and then claim your Investment Tax Credit which covers 30% of the total cost. For example, if the system costs $10,000, you will get $3,000 as tax credit at the time of tax season the following year. What this means is that you have to make an upfront investment of $10,000 and later you will get $3,000 back which makes your net investment $7,000. This option is ideal for people who have some cash to spare and would like to invest it in the purchase of a solar power system. Usually, the invested capital will be recouped in about 5 to 7 years after which it will be pure saving on your electricity cost.

 

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2. Loan Purchase

For people who might not have enough cash to completely purchase the system; this is a good option for them.  With the loan purchase option, you can install a money saving solar power system for your house with zero to little upfront investment and start saving money on your expensive electric bill from day one. There are different available loan types for the purchase of your solar system and each solar loan program has its own requirements. Below are 3 different loan programs to choose from for your residential solar project depending on your current financial capability and relative goals.

  1. HELOC (Home Equity Line of Credit)
  2. PACE (Property Assessed Clean Energy)
  3. Conventional Solar Loans 

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3. Solar Lease

Solar Lease Agreement

This is a good option for those who want to lower their costs of electricity but currently have no money in hand. You can sign up for the solar lease program if you have interest in the ITC (Investment Tax Credit). However, these options usually have an annual escalation which means your costs of solar electricity keeps increasing each year. This used to be a popular option until late 2015, but the dynamics have changed and today, the number of homeowners signing up with the lease program had significantly dropped.

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4. Solar PPA

Solar PPA

There is also the option of purchasing the power from a solar company at a lower rate compared to the utility company. However, these options usually have an annual escalation which means your costs of solar electricity keeps increasing each year. This is called Solar Power Purchase Agreement (PPA).

Lease and PPA used to be a popular option until late 2015, but the dynamics have changed and today, the number of homeowners signing up with the lease program had significantly dropped.

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Are you interested in going solar, but find it confusing? 

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