Financing your solar energy system in Summerlin, Nevada can be overwhelming. Costing about $13,000 for a 5.8 kWh solar system before applying the federal tax credit, it’s crucial to seek reliable financing for your solar installation to ensure you install a solar system that suits your needs. Read on to discover your different financing options, including their benefits and disadvantages.
Personal Savings
Using your personal savings to fund your solar system purchase is the best option since it forgoes needing a payment plan or loan with interest payments. Since it involves paying in full upfront, it ensures your solar installation is within your budget and maximizes the ROI of your solar energy system. This option also allows you to take advantage of the various incentive programs offered by Nevada that can help you reduce your solar installation cost.
The main drawback is that you will spend a significant upfront cost. The average cost of installing a solar energy system can go as high as $40,000, which many people cannot invest all at once.
Solar Loans
There are various solar loans that you explore provided by solar providers and private lenders specific to solar energy systems. These loans come in two options: secured and unsecured loans. Secured loans use your home as collateral and usually have a lower interest rate. Unsecured loans use the solar system as its collateral. To qualify, you must have a higher credit score.
Government Loans
The Federal Housing Administration Power Saver program is another ideal option for homeowners to save energy by offering solar financing. You can take advantage of two options in this program for full solar panel financing: The Power Saver Energy Rehab 203(K) and the Power Second Mortgage. You must meet specific qualifications, such as having a minimum credit score of 660 and a debt-to-income ratio of 45%.
These two options are popular since they offer lower interest rates than personal loans but have longer repayment terms. However, you should note that these loans are strict and require applicants to spend within their budget and only buy what they need. Financing limitations also apply. Therefore, you have to spend below your limit. This program also requires homeowners to replace their solar panels after 20 years.
Home Equity Loans
A home equity loan allows you to borrow against your home’s equity based on income, credit score and accumulated equity. If you choose to finance your solar panels, you will repay your lender through a monthly payment. It offers lower interest rates than other loan options, but it might take longer to be approved.
Solar Leases or Power Purchase Agreement (PPA)
Similar to taking a lease on a vehicle, a solar energy lease involves making monthly payments to a solar company for using their solar energy system. It can be a traditional lease of a power purchase plan (PPA). In a PPA, a solar provider installs, owns and maintains the solar system. They then sell the power generated to the homeowner for a rate typically lower than what you would typically pay your local utility company. If you live in an area with net metering programs, the third-party company distributes your net metering credit for the excess energy they send to the grid.
Get the Best Solar Financing With Solar Optimum
With the various solar financing available, finding one that suits you best is crucial. Fortunately, there are solar experts who can guide you through your options. At Solar Optimum, our team can help you evaluate every solar financing option available and narrow it down to an option that suits you. Contact us to learn more about the benefits of going solar in Summerlin, or download Solar Optimum’s Ultimate Guide to Going Solar.
