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As national interest rates continue to rise, many people may be hesitant to explore solar panels. But the cost of not going solar is going up as well. In 2022 alone, electricity prices increased 14.3% in the United States.
It's important to remember that unlike a hot tub, or that new waterfall countertop, going solar is an investment in your home that starts paying itself back from the moment it’s activated. Add a battery and you will get the added benefits of energy security as outages become more common. Solar energy systems provide homeowners with significant savings, and installation is often much more affordable and attainable than most people might think. If you’re ready to hedge against the certainty of rising energy costs, or the anxiety of an increasingly stressed electrical grid, while steering the planet toward a clean energy future, read on to learn how paying for solar panels doesn’t have to be complicated—or break the bank.
How Much Does Solar Cost?
With over 142 gigawatts installed globally, and nearly 55% of the U.S. national grid now powered by the sun, the value of solar speaks for itself. The actual price of a new system varies depending on the size of your home, the position of your lot, and the angle of your roof slope. For example, your neighbor might need 15 solar panels to generate enough energy, while your house might require 25.
Your solar provider will give you a personalized quote, but most systems range anywhere from $10,000 to $30,000 on average. This typically includes the price of the panels as well as installation. It’s important to remember that 0-down lease and loan options are available and offer payments that are much lower than what you pay your utility.
It’s also important to keep in mind that no two households use energy in exactly the same way. As such, a system may be much larger for a family of 7 than for a family of 2 living in the exact same house. Powur sellers are trained to assess your unique energy usage and provide custom options to help you make informed decisions.
Finally, when considering the various purchase options, it’s important to remember that going solar is one of very few home improvement projects that begins paying itself back from the moment it’s turned on. That won’t happen with a pool or garden pergola.
With that said, let’s take a quick look at the most common solar purchase options.
Solar Payment Options
Paying for a solar panel is a bit like buying a shiny new car. It’s a significant asset that can be paid for over time. However, unlike a car (which depreciates in value), solar puts money back in your pocket every month and reduces your household expenses. In short, solar pays itself back through savings. If you opt for a lease or power purchase agreement, then there is no out of pocket expenses to payback, so you literally start saving from day one.
With that said, there are several purchasing options that make it easy for homeowners to access the clean, reliable energy of a solar system. Most customers choose to trade their utility bill for a low monthly payment on their solar panels by financing, leasing, or entering a power purchase agreement, but some decide to pay cash. Let’s take a closer look at these options.
Pay Cash
The first and most straightforward option is to pay full price for a solar system when it is installed. With a cash purchase, you own the solar panels outright and don’t have to worry about monthly payments, interest rates, or other financing constraints. Cash purchasing also allows buyers to take full advantage of the 30% federal solar tax credit, and make the transfer of ownership to a new owner easy if a home sale is in your plan.
Solar Financing
The most common method for purchasing solar is financing through a solar energy loan. This option allows buyers to benefit from the 30% federal tax credit, which can be disbursed over several years if you don’t use it all in the first year of installation.
Depending on your solar provider and lender, this loan will have a certain interest rate, just like a mortgage.
Powur offers competitive APRs (annual percentage rates) and a zero money-down financing option for qualified buyers. With no hefty down payment needed, this option makes it incredibly easy for homeowners to start reaping the benefits of solar energy right away.
Once your system is installed you can start making monthly payments—which are typically more affordable than your old utility bills.
You can also choose to finance solar with a Home Equity Line of Credit (HELOC), but getting approved for a HELOC can be a lengthy process.
Solar Leasing
Some homeowners choose to lease solar panels instead of purchasing them. In this scenario, the leasing company (usually the solar company) retains ownership of the system, and the homeowner simply makes a monthly payment.
The cost of a monthly lease payment should be lower than the homeowner’s average electricity bill, making it a fantastic option for those looking to go green, save money, and not have to make an upfront financial investment. With a solar lease, you do not have ownership of the system and are not able to claim the 30% tax credit.
Power Purchase Agreement
A power purchase agreement (PPA) is similar to a solar lease because you don’t actually own the system. With a PPA, the solar company installs panels on your roof, and you pay only for the power the panels generate. Paying for solar-generated electricity is generally much cheaper than traditional electric bills, which is why this can be an attractive option.
Like a lease, residents who choose a PPA do not have ownership of the solar system and cannot claim the 30% tax credit.
As you can see, you have several options when it comes to paying for a solar energy system. Don’t let financing scare you away from a lifetime of energy savings.
Our Powur consultants can assemble a no-obligation quote and help you explore all the purchase options above. We can’t wait to help you change the world, one panel at a time.
Sources:
https://www.seia.org/research-resources/solar-market-insight-report-q2-2023
https://electricitytransmissioncompetitioncoalition.org/electricity-price-inflation-soars-to-14-3/
https://blog.powur.com/4-easy-ways-to-pay-for-solar/?sname=dreamlifeinnovations
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