Solar financing is a way for homeowners to pay for solar panels and other renewable energy. There are several ways to get a solar loan, and if you get the best deal, you may be able to get a lower interest rate. There are also several benefits of solar financing, including cleaner energy and a boost in home value.
First, you may be able to take advantage of the Federal Solar Investment Tax Credit if you finance your solar system through a loan. In addition, some states and local governments offer low-interest loan programs for clean energy systems. If you are eligible for these programs, you can qualify for solar financing at no interest.
Another way to get solar financing is through a power purchase agreement (PPA). A power purchase agreement is similar to a lease. In a PPA, the solar developer installs solar panels on a property and the owner purchases the electricity generated by the solar system through a long-term contract. The initial rate is usually much lower than the utility rate for the same amount of electricity, but it increases annually at a fixed percentage. Depending on the rate of increases in utility rates, the PPA rate may actually end up higher than what the utility charges. In a PPA, the developer also owns any SRECs or other tax incentives related to the solar system.
For those who have bad credit, it’s a good idea to delay solar panel installation until your credit has improved. To improve your credit score, you should pay off high-interest debt and establish a payment history. You may also want to apply for a personal loan for bad credit. This option will help you minimize the risk of your application being denied. Make sure you pay your loan on time every month. If you don’t, you’ll only hurt your credit score.