With instant utility bill savings, significant returns, and home value appreciation solar is an investment that pays for itself – many times over. Although solar energy is a very wise investment, getting started isn’t necessarily free. But neither is paying your electric bill every month!
So, if you want to get rid of your electric bill today by going solar, what is the best way to finance your solar installation? We believe there is no absolute “best” financing solution. It really depends on your budget. But below are two of the most common ways that people pay for their photovoltaic (PV) solar systems.
1. Using Cash to Purchase Your Solar Installation
If you have the money, using cash is a terrific way to go solar. You will enjoy instant utility bill savings and a smaller carbon footprint. But you also benefit from the following:
- All solar incentives come to you. Although a new PV installation might cost $20,000, $30,000, or even $40,000 depending of the size of the system – the true price jumps down 30% after taking advantage of the federal tax credits.
- True solar ownership delivers predictable payback periods (generally 5 – 6 years) and generally a ROI of 9% or more. In other words, what you spend upfront – you more than make back many, many, many times over the 25+ year lifetime of your solar PV installation. In fact, many PV systems last 40 years or longer.
- You enjoy decades of free electricity. Imagine never having to send money to your local utility company again. It’s liberating, and an amazing financial investment.
This is all well and good if you have some cash lying around. But not everybody does. What are your options then?
2. Using a Low Interest Loan to Finance Your Solar PV System
With a solar loan you get to enjoy:
- Minimal or even no upfront costs.
- All the true solar PV ownership benefits listed above.
The low interest loan process works like this:
- You take out a low interest loan or a home equity loan from your bank or credit union.
- Every month, you send regular payments to the lender. You can arrange these payments to be less than what you used to pay to the local utility company. So right off the bat, you enjoy instant electricity bill savings.
- Each payment moves you steadily closer to true system ownership. It only takes an average of 5 or 6 years to completely pay off your solar loan.
- Once the loan is fully paid for, you enjoy decades of free electricity for the remaining lifetime of your PV system. And the money you are paying off the loan with is the same money you would have been paying to the electric company anyway. You are not spending any more money than you were before.
- The major difference now is that in a few short years you will have paid off your loan and your electricity your solar system is producing is free. If you hadn’t bought your solar system … you would end up paying the electric company the money you could have used to finance your solar system. And, instead of your electricity being free after six years, you would continue paying your electric company more and more for the rest of your life (remember they have been raising rates an average of 3 – 6.7% a year). It’s your choice, it’s your money, and we encourage you to make a wise choice to make the most of your finances.
In our opinion, using low interest solar loans is one of the smartest ways to go solar – especially if you have limited finances. It costs three+ times the amount of money to rent your electricity from the electric company at today’s rates than it does to buy your solar system. Why would anyone spend three times more when they don’t have too? That just seems silly and foolish to us when buying your solar system is such an easy way to save significant amounts of money.
Which Financing Approach Makes the Most Sense for You?
As mentioned before, there is no absolute “best” financing strategy. Every budget is different. Every project is unique. And no two solar customers have the same financial goals. But no matter which way you go, you will be saving yourself significant amounts of dollars going solar rather than paying your electric company forever as they continue to raise your electricity rates year after year.
Give us a call today and we can show you with our Solar Savings Calculator what your return on your solar investment would be and how much you can save by going solar. We would be happy to help you learn more about how easy it is to save money with a quality 35th Street Ultra High Performance Solar System. Call us today with all of your questions. We are here to help!