Over the past few years, homeowners in South Bay Area have found that solar panels are more accessible than ever. The panels often prove to be a worthwhile investment. After purchasing the hardware, the panels end up cutting your electric costs considerably. Not only do solar panels rely on a renewable energy source, but manufacturers design them to last for roughly two decades.
As a resident of South Bay Area CA, solar panels could save you tens of thousands of dollars during this time. However, many people struggle to find ways to fund their solar panel investment. Fortunately, this article contains some of the industry’s vehicles to finance your solar panel investment.
A Secured Solar Loan
One of the best ways to finance a solar panel purchase is with a secured solar loan or with a Home Equity Line of Credit. These loans take advantage of the equity homeowners have already invested in their home. Homeowners should consider this a viable option only if they can secure a loan with an interest rate of less than seven percent.
These loans are secured, which means lenders guarantee them. These loans also allow homeowners to purchase the solar equipment up-front. This, in turn, makes them eligible for certain benefits. For instance, homeowners can take the federal solar tax credit, worth 30 percent. They could then use the savings to pay down their loan quickly. Homeowners could also receive numerous other tax deductions as a result of solar panel installation as well.
An Unsecured Solar Loan
Unsecured solar loans are conceptually similar to secured loans. The critical difference is the fact that homeowners aren’t backing the loan with any collateral. This is what causes the loan to be “unsecured.” Homeowners will likely find that the rates on an unsecured loan are higher than those of a secured loan. Additionally, the terms tend to be shorter as well. Unsecured loans could be much more expensive than secured loans, but could still end up saving customers money.
The upside to an unsecured loan is that homeowners need nothing more than a good credit score to secure funding. Although this could be a more expensive option, many view it as a less risky choice. Many solar panel manufacturers offer unsecured solar loans to customers directly during the installation process.
Power Purchase Agreements Or Solar Leases
A Power Purchase Agreement allows homeowners to begin saving on their electric costs immediately. When entering into one of these agreements, the solar company acts as a second utility provider for homeowners. However, solar energy costs less than fossil fuel energy that homeowners typically burn to power their homes. Homeowners can see immediate savings of up to 30 percent with this plan.
Solar leases are a similar option. Under this plan, customers can rent the solar panels for a pre-determined price. Then, homeowners receive energy from the panels, which they can use to fuel their homes. Homeowners should weigh whether the monthly cost of the lease is cheaper than their current heating and electric bill.