Solar Financing

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If you are considering a solar system but don’t have the money right now, there are several ways to finance it. While solar leases may not qualify for the Federal Solar Tax Credit, they can be beneficial for retired people who don’t owe taxes and/or who are on a fixed income.

The key to solar financing is identifying your needs and finding a lender that offers a low rate. The upfront investment is often the largest barrier to closing a deal. In addition to ensuring a good rate, you should look for the lowest fees. A solar loan should also have cash-flow neutral terms, which means that the loan payments should be lower than the savings on your electric bill.

Several solar financing options exist, including loans, leases, and PPAs. Some lenders are even willing to give solar panels loans without a down payment. These programs are meant to help homeowners finance home energy upgrades. To be eligible for a loan, you must have a credit score of 660 or higher. The debt-to-income ratio must be no higher than 45 percent.

The most attractive solar financing options can be obtained through the federal tax credit, which can amount to 26% of the total system costs. Some solar loans are zero-down options, which means you can use the federal solar tax credit while paying the remainder of the loan. The terms of most solar loans range between 10 and 20 years. Although longer-term loans offer more flexibility, shorter-term solar loans offer the best financial savings over the life of your solar system.

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