What Is Solar Financing? Here Is Everything You Need To Know About Solar Financing

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What Is Solar Financing? Here Is Everything You Need To Know About Solar Financing

Solar panels often make the bold but true claim of reducing your household energy bills by a considerable margin. Many people realize that power bills can get too expensive and are hopping on the solar energy bandwagon.

While solar panels are a better alternative to conventional energy sources, they don’t come cheap. So if you are bothered about the high upfront costs of solar panels, it is time to invest in or choose a solar finance company.

Many credible solar financing companies offer attractive financing solutions. So, now there is no need to pay high costs – and you can instead get your solar panels from reputed financing companies.

As per Sunlight Financial reviews, the company gets the cost distributed across a few years. It helps ease the pressure drastically while your energy bills start to dip every month.

Also, it is advisable to read in length to gain more information about specialist solar financing companies. Compare the terms, interest rates, term periods, and perks before signing on the agreement and loan papers.

If you are curious to know where to start and how to go about the process, read on. We will cover an end-to-end aspect of solar financing in the US. 

What Are Solar Panel Loans?

This type of loan enables homeowners to purchase viable solar panels using the funds received from the lender. The homeowner pays off the loan over time. So, there are no upfront costs. The payment plan is typically based on monthly payments. 

Solar financing works like home improvement loans that you can take from banks. Every funding plan has a unique set of eligibility criteria and application process. Ensure that you read the policy terms and conditions, guidelines, and instructions before choosing one.

Why Should I Choose To Finance My Solar Panels? 

If you have the money to pay for the solar panels, you typically can go ahead with paying for the same from your pocket. Any advanced solar panel can cost your pocket substantially – almost $11,144 to $14,696, considering the technology you opt for.  

For most, it could be a substantial upfront price and drill a hole in the pocket if not planned properly. Therefore, the right way is to find a reliable solar finance company and apply for affordable solar panels.

Remember that solar panels help reduce your domestic and commercial energy bills – to the tune of $ 1,400 or more every year. Besides, solar energy is the best solution for protecting the ecology and the environment. 

Also, it is crucial to mention here that the US Government has been spearheading the cause of sustainability for decades now. The Government has been taking initiatives to design different plans and policies to support the cause of renewable energy sources. 

Types Of Solar Loans

1. Personal Loan

Look for loans that come with lower rates of interest and impressive borrowing terms.
Compared to an equity loan, in this case, you do not have to bring in any collateral – therefore, the risks are less compared to an equity loan, even though the interest rates are comparatively higher.

2. Solar Panel Financing

There are lots of solar financing options to choose from in the US. A few of these are:

Government Loans

The Federal Housing Administration or the FHA offers loans to help people convert their homes into energy-saving homes. The loans are supposed to support a range of technological up-gradation in their homes that include solar panels.
There are two types of loans – PowerSaverSecond Mortgage and the 203 (k) Loan. In both cases, the credit score required is quite high to get the loan. The interest rates, however, are equivalent to the rate of interest of a personal loan. 

Home Equity Loans

A home equity loan is a plan where homeowners can borrow money by keeping their home’s papers with the lender. The bank or the financial institution usually lends at least up to 85% of the home equity.

Solar Leasing

Solar leasing is another program where solar panels cannot be purchased but leased. Here, the solar panels are installed by the company on lease. Remember, you do not get to enjoy tax credits on installing solar panels in your home.

How Do Solar Financing Plans Work?

Here’s what the process of offering solar financing plans looks like:

  1. Choose a credible financial service company.
  2. Apply for the loan. Remember to submit the supporting documents.
  3. The company carries out a site survey.
  4. The loan is sanctioned. 
  5. Specialists are put on work to install the solar panels and systems. 

What Are The Factors To Consider When Financing Solar Panels?

Before you choose a solar financing plan, bear in mind that it should be flexible and spread over a duration to spread the panels’ cost, systems, and other related expenditures. You can read more details about the energy grants on an official website. 

Here are some pointers you should keep in mind before choosing your solar panel financing plan:

  1. Go in for a loan that has a low-interest rate. It’s always advised to find and compare the interest rates and pick one that is competitive enough. 
  2. Read the terms and conditions and chose repayment terms that are just right – neither too low nor too high.
  3. Go for plans with benefits, for instance, offering unemployment protection or not requiring any deposit. Also, some credible companies do not penalize you for early repayments.
  4. When choosing a solar finance plan, you need to choose a payment plan that is manageable at your end.

In Closing

From grants to helping save the environment, solar panels are a boon. Ensure that you choose the right solar finance company for a seamless buying of energy-saving systems.

There are many solar financing companies, but it is also advisable to read reviews of the company before making the right choice. For example, reading an Acorns review can show you the difference between a trustworthy company and an average service provider.

Not all finance companies give you the best of the deal. Keeping abreast with information and reading comparative analysis of the leading financing companies is the best way to make a well-informed choice.

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