How to Pay for Home Solar
Oct 25, 2022
by EmPower Solar
As solar professionals, we encounter a lot of solar myths. One of the biggest ones is that solar is only for people who have enough expendable income to cover the purchase of a system outright.
The reality is far from this. Going solar can help homeowners save money on their electric bill. We estimate that over a system’s 25-year lifetime, you can save over $100,000 on electricity costs. In today’s world or rising heating and electric costs, investing in solar is worth the ultimate savings.
That being said, it can be a sizable investment. Luckily, there are many options available when it comes to owning and financing your system.
How Much Do Solar Panels Cost?
Our in-house engineering team will consider several key factors in order to properly size and design your system, including roof space, shading, and more. These factors will ultimately determine the final cost of the solar panels and installation, though most systems fall within the range of $20,000 to $40,000 before incentives. System enhancements, like the Tesla Powerwall, will increase the overall cost, but can be financed along with your panels.
How to Pay for Solar Panels
When it comes to paying for solar, you have three main options: financing through a loan, purchasing with cash, or leasing. Ultimately, it comes down to what option makes the most financial sense for you. Here is a breakdown of the differences:
Home Solar Loan Financing and Ownership
By financing your system, you can switch to solar for $0 down and see savings from day one. Home solar loans tend to be the most popular option among homeowners. Especially since it gives them direct ownership of their system. Plus, with fixed interest rates and fixed loan payments, payments are predictable, unlike volatile energy prices.
A home solar loan is also a strong choice for those who have the ability to take advantage of solar incentives, including the newly increased 30% federal tax credit.
One thing to keep in mind is that, just like for any other big purchase or home improvement project, financial lenders have credit score requirements. If you do not meet the minimum requirement, typically around 650, a home solar loan may not be the best option for you.
Though many homeowners who choose to finance their home solar systems this way tend to remain in that home for the lifetime of their system (~25 years), home solar loans are easily transferable should they choose to sell instead.
We partner with select financing providers to offer low-interest loans with term options between 5 and 25 years. The flexible nature of these options is part of what makes solar loans attractive to homeowners.
Home Solar Purchase and Ownership
As with a loan, you will also own your home solar system when purchased outright. Cash purchases also allow homeowners to receive maximum benefit from federal, state, and local incentives.
Solar is one of the best investments you can make. The typical homeowner can expect to see an annual return of about 15-20% per year on their home solar system. On average, our solar panels pay for themselves within 4-7 years when purchased with cash. After that, they simply enjoy generating their own free power.
Home Solar Lease and Ownership
Similar to the loan option, there are also leases that allow homeowners to put $0 down and benefit from fixed low monthly payments and immediate savings. When you lease panels, however, they are owned by a third party. For example, panels leased through SunPower are owned by SunPower. With leasing, you can expect to be paying for panels for around 20 years.
Depending on your contract, once the lease ends, you will have the option of renewing the lease, removing the system or purchasing the system.
One major point to remember is that you are not able to claim any federal solar incentives under a home solar lease, though you may claim the NYS rebate. This makes them a great option for homeowners with little to no tax appetite.
Will My Home Solar Financing Choice Affect My Warranty?
All three options provide you with coverage through SunPower’s industry leading 25-year warranty. Any replacement or repairs that your system may need are covered at no cost to you through SunPower’s warranty program, no matter which financing option you choose. You are also able to access any servicing or maintenance through EmPower Solar. You can also see real-time energy production using SunPower’s app.
Solar can help homeowners across Long Island and New York save money each month on their electric bill. Every home is unique, and that’s why EmPower offers personalized financing options to help you save money each month by harnessing the sun’s energy.
Home Solar Incentives and Rebates
Now really is the best time to go solar. By combining different incentives and rebates, many homeowners are able to cover up to 50% of the cost of their system. Financing or purchasing your system provides you with the most offers. This includes a $5,000 (maximum) rebate from New York State and a 30% federal tax rebate. Those who lease their home solar systems are not eligible for the federal tax credit, but can receive the NYS rebate.
Contact us today to explore your solar options and start saving money.