Today, we’ll help you make sense of the three purchase and/or payment options for solar panels that are standard across the industry. And we’ll find which one would be the best choice for your home or business.
Let’s take a look at the $0 down options first. Then, we’ll explain the option that will cost the most upfront but also potentially bring you the quickest return on your investment.
Power Purchase Agreement
A Power Purchase Agreement (PPA) is a great option for those solar customers who:
- care about the environment and reducing their carbon footprint
- don’t want to spend any money up front for the benefit of solar panels
- aren’t completely in it for the savings on their monthly bill
With a PPA, your panels will be installed at no cost, which is fantastic – but you’ll never own them. And you’ll still be purchasing your power from the grid – albeit at a lower, locked-in rate than your non-solar neighbors. This means that, unfortunately, you may not see huge savings in your monthly electric bills – although there is almost guaranteed to be some savings since your rates will be a bit lower.
Solar loans are some of the most popular solar panel financing options. When you deal with a solar loan you’re doing exactly what it sounds like – taking out a loan on your solar panels. You’re still going to get a $0 down option with a low (or even 0%) interest rate, but you’ll be paying back the cost of your loan every month.
However, since you’ll also be generating energy during this time to offset your utility bills, your monthly bills will typically still be a bit lower than average – especially during the summer months when you’re running your air conditioner at full blast but maxing out your solar production due to the bright, sunny days.
When folks talk about solar panel installations, they’re often drawn in by the promise of $0 down… this is not that option. In fact, the outright purchase of a solar panel system is likely to be the most costly option up front but will have you seeing the most immediate returns in your investment.
You see, when you’ve purchased your system outright, every single kilowatt of energy that you produce from that point on is yours. You don’t have to pay back a monthly loan amount and you aren’t simply purchasing the energy from the grid at a discounted rate. You’re generating your very own electricity, and possibly even sending the surplus back to the grid for a credit.
We won’t sugarcoat it. The initial cost of a solar panel installation can be a bit high. The good news? You’ll have state and federal incentives and rebates to help you lower those costs tremendously. And with virtually no electric bill to speak of (unless you aren’t producing enough solar energy to power your home’s high usage), you’ll be eliminating that monthly expense as well.
What Doesn’t Apply?
As we mentioned, not all payment options apply to all situations. Solar loans, as they exist right now, aren’t available to corporate solar customers. If you’re interested in getting solar panels for your business, your options are to purchase the system outright or sign on to a PPA.