26 Mar Should I finance my solar system?
Purchasing a solar system is a big financial decision. For solar shoppers who don’t have the money upfront, is it wise to finance a system? There are now solar loan products available in Maine that allow you to install a system for as little as no money down.
Until a few years ago, solar leases were a very popular way for homeowners to install solar. For no money down, a family could get a solar system installed on their roof. In some areas, this would result in lower energy prices from day one.
Now there are more financing programs to many households which have caused solar leases to decline dramatically in popularity. Sundog Solar offers financing with a rate of 2.99% for 12 years. For many of our customers, the reduction in energy costs on your electric bill is greater than the loan payment, making the system cash flow positive from day one.
The financial profile of a solar system with a solar loan depends on several factors:
- Total price of the PV system (after incentives)
- Price of electricity that the solar system displaces (rate you pay the electric company)
- Interest rate of the solar loan (2.99%)
- Length of the loan (12 years)
When the cost of energy is higher, it is easier for solar to be cost competitive. For example, solar power is very popular in Hawaii and California, largely due to high electricity costs. This makes it easier for people to save money right away when financing a solar system.
In the past, some solar energy installers did provide solar loans, but the terms were typically relatively short so the loan payments were higher than the cost savings. Now, the term of many solar loans is around twelve years. Having a longer term makes it easier and more common for the solar system to be cash flow positive right away. Once the loan is paid off, the solar panel system will provide free energy for decades.