Financing is such an important part of the solar industry, and it plays a large role in making these investments more accessible for more people. Despite its ubiquity, solar financing is far less a part of the conversation as it ought to be. When we talk about going solar, much of the focus is on the many benefits that come with an installation, but it’s worth also exploring how financing helps people go from paying high energy bills to enjoying the perks and incentives of solar. Let’s explore some of the ways that financing can empower you to get into solar, and how a smart investment can ultimately provide you with meaningful returns.
Solar financing is a specific kind of financing offering designed specifically for the solar industry. The kinds of options available are tailored to the specific needs of a solar system, which are often distinct from the structure of other loans.
The reason that solar financing may be distinct from the financing options available in other industries is that the financial institutions that provide these various options make adjustments to their offerings based on the specific needs of the industry. To put this simply, the needs of a solar financing option are different from those of, say, a homebuyer or someone looking to purchase a car. There will of course be overlap, as in all cases someone is looking for assistance to access something expensive sooner than later, but solar systems have a different value proposition to something like a home or car, and they have different costs, risks, and payment timelines.
Take the simple comparison of assets between a home and a car. Cars have a large upfront value, given that they allow you to get where you need to go, but they also depreciate in value more quickly than many other assets. They also have a unique risk factor of being an asset on wheels, so there is some small consideration for the fact that you can take the investment and drive off with it. Compared to something like a house which is fixed in place, and also represents a valuable asset at any point in its lifetime, and which is also much more expensive – the needs of the financing options for a home are much different than a car.
Solar + Financing
When it comes to solar financing, there are a few key differences which set the available options apart from those discussed above. Firstly, when you decide to finance a solar system, you’re financing an asset which is affixed to your home and property. As we’ve discussed previously, one of the major benefits to solar is the increase in property value that comes just from having a solar installation. Then, you’d decide between a few key options – whether to buy your system, lease it, or enter into a power purchase agreement, or PPA. There are distinct financial needs for each of these options, which is why we’ve worked hard to develop relationships and partner with leading organizations as they work to develop industry defining options for solar financing.
Whether you want to buy your system outright, work with an organization to install and “rent” your system, or enter into an agreement to purchase power at a fixed low monthly cost, you can customize your experience to fit your needs and budget. Ultimately, the best option for many people will be to partner with a trusted solar provider to review the available options for solar financing, and to pick the one that best fits your project goals and desired outcomes. That way, you can get started with solar and begin to access the benefits of solar.
This is where the benefits of solar financing come into play – because once you’ve leveraged financing to invest in a solar installation, you get to begin accessing the benefits that come with it. To start, there are many federal and state incentive programs that provide tax breaks and discounts on solar and energy efficient technology. As many people are looking to install solar to cover their current energy usage and their potential future needs, you can use the opportunity of a solar installation to consider things like EV chargers and clean energy appliances such as heat pumps.
Without solar financing, you’d have to wait to access these incentives, and with a new administration headed to Washington this year, there is a real chance that those incentives may be adjusted in the future. Plus, once you’ve financed and installed your solar system, you’ll immediately have access to the most notable benefit of all – saving big on your monthly energy bills. With California rates as out of control as they are, you could either wait to budget for a system at the end of the year, or invest now with the help of powerful financing options and start saving on your bills now. With 4 rate increases already weighing down your bill from last year, and with more increases proposed for this year, the choice is simple – and it’s also made easier with financing.
