Posted by Todd Filbrun on Thu, Nov 01, 2012 @ 04:00 PM
These days, you have several different solar financing options available to you, including solar leasing, power purchase agreements and solar loans. While all of these options can help ease the burden of the initial investment, the financial benefits of a solar loan will allow you to reap the most long-term savings.
If you are planning to invest in solar for your home or business, consider these four financial benefits of a solar loan:
- Money - A solar loan provides you with the money you need to purchase the system that's right for your home. Whether you need to cover the entire cost of equipment and installation, or just a portion of the overall expenses, you have the flexibility to borrow as much or as little as you need. On the other hand, a solar lease locks you into a monthly payment that will increase every year, even if you have the money to make a partial investment upfront.
- Ownership - Much like renting a car or an apartment, solar leasing does not allow you to keep the equipment forever, and since you don't own the equipment the solar company can place a lien on your home and use it as collateral. You must return or buy the system when the term is up. Either option ends up costing you more in the long run. While it may save you a little money in the short term, a solar lease will cost you more money over time and require you to give your tax credits and rebates to the solar company. With a solar loan, you own the equipment, keep all of the finacial benefits for yourself, and have the freedom to sell it if you decide to sell your home.
- Tax value - Depending on the type of solar loan you get, the interest may be tax deductible, which will reduce your income tax liability and save you even more money. Purchasing the equipment also makes you eligible for solar tax rebates that will save you significantly on the cost of equipment and installation. In addition to the 30% tax credit from the federal government you could get up to an additional 25% rebate from your utility company allowing you to go solar for pennies on the dollar!
- Home value - Adding solar panels to your home can significantly increase its value, but not if you don't own the equipment. In fact, if you lease your equipment, selling your home can be more challenging because you must either end the lease or transfer it, and both of these options will cost you time and money. Most solar lease agreements last for fifteen years; if you decide to sell your property in the meantime, you could face financial penalties.
Look for a solar provider like Kurios Energy that offers no-money-down financing options that allow you to own the equipment and don't force you to give up your valuable tax rebates.