How Can You Finance a Solar Energy System?

Solar installers

Considering solar installation for your house? Solar energy actually saves you money over time, but the initial cost may be higher than many homeowners are willing to pay. So how do you get solar panels without the money up front?

One option is is third-party solar financing. Third party-financing is an established financial practice in the US that recently emerged as a primary method of finance companies and individuals switching to solar services. This option encourages Americans to install and maintain solar electric systems on their homes for only a portion of the average start-up cost.

There are two main models third-party options for solar financing: solar leases and power purchase agreements, or PPAs.

In lease agreements, customers can spread payment for their solar energy system over a period of years in lieu of paying for the power that the system produces. These agreements can be reached through contracts signed with installers and developers and can even be arranged so that customers don’t pay for anything up front. Alternatively, customers can often pay off some or all of the system costs even before the term of the lease is up. Comparative models can be found in the automotive and office equipment industries.

In PPA models, solar services or developers build an energy system on a home or business owner’s property for free. The energy collected from the solar panels lowers the customers electric bill, and the customer pays their solar service for the energy generated at a fixed rate that’s often lower than the local going rate. Once the contract term is up, property owners can choose to buy the energy system or renew their contract.

Since 2013, more than 90% of New Jersey’s residential solar energy market has been comprised of third-party owned system, and 50% of solar energy systems in New York were owned by third parties in 2014. 69-81% of California, Arizona and Colorado’s energy systems were third-party owned in the same period.

Contact solar services in your area to see if you qualify for solar energy financing.

Find more on this topic here.

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