Why Finance Your Solar?
Don’t let costs get in the way of pursuing your solar project. There are several benefits that make solar financing a smart choice for homeowners seeking cleaner and more affordable energy sources.
Lower Upfront Costs
- Solar financing eliminates the need for a large upfront payment. This makes it easier to invest in solar energy without the immediate financial burden of a full cash purchase.
Immediate Cost Savings
- Start saving on energy costs right from the beginning. Offsetting your monthly loan payments enables a faster return on your investment as you generate electricity.
increased property value
- Adding solar panels can boost your property's worth. Research shows that homes with solar panels sell faster and at higher resale values than homes without solar panels.
|HELOC for Solar
|Unsecured Loan for Solar
|Requires home equity as collateral.
|No collateral required; home not at risk.
|Typically lower interest rates due to home collateral.
|May have higher interest rates compared to HELOC.
|Loan amount depends on available home equity.
|Loan amount based on creditworthiness and lender policies.
|Flexible terms with interest-only or variable payment options.
|Fixed repayment terms with predictable monthly payments.
|Interest payments may be tax-deductible (consult a tax advisor).
|No tax benefits directly related to the loan.
|Longer approval process involving home appraisal.
|Quicker approval process, often with same-day decisions.
|Impact on Credit
|Can impact your credit if not managed responsibly.
|May have a lesser impact on credit compared to HELOC.
|Risk to Home
|Your home is at risk if you default on the loan.
|No risk to your home; no lien placed on your property.
|Lower interest costs over time due to typically lower rates.
|Higher interest costs compared to HELOC.
|Access to funds as needed during the draw period.
|Lump-sum payment at the loan's outset.
|Offers more financial flexibility during the draw period.
|Less financial flexibility due to fixed monthly payments.
|Use for Other Purposes
|Can be used for other home improvements or expenses.
|Loan specifically for solar; not available for other purposes.
Is financing solar worth it?
While each person’s financial situation is different, financing solar eases your upfront financial burden, making it easier for most people to begin their projects.
Can I finance solar if I have a low credit score?
Your credit score can influence your loan approval and interest rates. While lower credit scores may pose some challenges, there are financing options available, such as secured loans or co-signers, which can help individuals with lower credit scores access solar financing.
It's essential to explore these alternatives and discuss them with your financing provider to find a suitable solution.
What happens if I sell my home before the solar loan is paid off?
If you sell your home before your solar loan is fully paid, you have a couple of options. You can either:
- Pay off the remaining balance with the proceeds from the home sale
- Transfer the loan to the new homeowner (if they qualify).
It's essential to discuss these possibilities with your lender and the potential buyer to find the most suitable arrangement that ensures a smooth transition of the solar system.
What is the typical payback period for a solar installation?
The payback period for a solar installation can vary based on factors like system size, location, and energy savings. The exact timeframe depends on your specific circumstances and financing options, so it's advisable to discuss this with your solar provider to get a more accurate estimate.
Can I still use solar incentives if I finance my solar installation?
Yes, you can still take advantage of solar incentives if you choose to finance your solar installation. Many solar incentives are available to both cash buyers and those who finance their systems. These incentives can include tax credits, rebates, and other financial benefits, making solar financing a smart choice for homeowners seeking clean energy solutions and savings.