The solar energy market has progressed significantly. According to the research firm Allied Market Research, the market was worth $52.5 billion in 2018, expected to reach $223.3 billion by 2026. Solar energy is, without a doubt, the way of the future. It is one of the world’s most efficient sources of energy. Today, most solar panels have an energy efficiency rating of 11 to 15 percent, which indicates how much solar energy is transformed into usable power. While this may appear to be a small amount, solar energy technology is constantly improving, and current panels can quickly meet the energy needs of most residential applications. Homeowners who install solar power systems get many advantages, including reduced carbon emissions, decreased electric bills, and potentially more significant home values. Although acquiring solar panels requires a more excellent upfront investment and more decision-making than leasing, the long-term benefits of owning your system can occasionally outweigh the costs. After reading this blog, you should decide whether you should buy or lease.
Financing Options:
Loan: After you’ve decided to go solar, the next step is determining how you’ll pay for it. A loan is the simplest method to receive the money you need to go solar, and it can save you anywhere from 40% to 70% over the life of your solar panels. These loans are similar to most home improvement loans used to accomplish modifications or renovations, such as finishing a basement or remodeling your kitchen. Loans are available from a range of sources, including banks and credit unions.
Third-Party Power Purchase Agreements: Third-party financing is a well-established financing solution. It has emerged as one of the most common methods of solar financing in the solar sector. Solar leases and power purchase agreements (PPA) are the most common forms of third-party solar financing. Instead of paying for the power generated, a customer signs a contract with an installer/developer and pays for using a solar system over a set time. In the PPA model, the client’s electric utility cost is offset by the solar energy system. The developer sells the generated power to the customer at a fixed rate that is typically cheaper than the local utility.
Advantages Of Using A Loan To Finance Your Solar Panels:
Long-term savings.
Low upfront cost.
A monthly utility bill savings compensate for a monthly loan payment.
Loan payments will be reduced over time, and the loan will finally be paid off.
Advantages Of Solar Leasing or Solar Purchase Agreements (PPA):
The leasing firm will be responsible for the solar system’s maintenance.
Lower upfront cost.
Is It Better to Go with A Solar PPA or A Solar Lease?
Whether you have a solar PPA or a solar lease, you save money on your electricity bill, and you’re using clean, renewable energy. However, because your monthly payments are directly connected to how much electricity the solar panels produce, a solar PPA has the potential to save you more money for your contract.
With a solar lease, your payment is fixed for the entire year, regardless of how much or little power the solar panels generate. While leasing may not save you as much money in the long run as a PPA, having a single monthly lease payment makes paying for power considerably easier. You won’t have to worry about monthly payments fluctuating, and you can easily plan your budget around your fixed monthly fee.
Should You Buy Or Lease Solar Panels?
With no down payment, such as through a solar lease, installing solar might be highly appealing. It’s crucial to remember, too, that while you won’t have to pay any upfront charges, you won’t save as much money as if you had purchased the solar panels. On the other hand, there are some circumstances in which signing a solar lease is a no-brainer. If any of the following apply to you, a solar lease may be the best option for you:
SRECs and other local solar rebates are not available to you.
The federal tax credit is not available to you.
You don’t qualify for a solar loan and don’t have the funds to buy a system outright.
Solar will help you reduce your carbon footprint and bring everyone closer to a more viable planet, whether you buy or lease solar panels or opt for a solar PPA. Remember, our team is here to assist you. To help you in finding the best plan, we can look at your financial goals and preferences, current power prices, and energy usage. For more information, contact us.
