Options of financing photovoltaics

Profits generated from financing photovoltaic
fot. Money, flickr.com

Everybody who wants go solar wonders about financial aspects of this investment. People are not sure if they can afford to install solar so it is very important to find the best option of  financing photovoltaic for them. In this article, we mentioned some the most common ways to get solar.

Outright purchase

Purchase provides you the quickest financial return but it involves a lot of cash at the beginning. It is good option for well-off investors who want to see the biggest income in the future. A payback time is a very important factor in this option because in this time installation pays off itself and then makes you money. The average payback time in the U.S is about 10 years but it might drop down to even 4 years, depending on state. Lifetime of PV installation is over 25 years therefore it can make money even for 13-18 years. What is more, you can get a Federal Tax Credit what makes your purchase 30% off, and still get some local rebates and state solar tax credits which will make your installation even cheaper.

Loan

Loan is the good option for people who don’t have cash but own some equity what can be collateral. In the U. S very popular is HELOC (Home equity line of credit). It provides attractive way of financing solar. In many cases it allows to come out way ahead after the first year and annual cost of loan is less than annual savings during all time. Moreover, you can still get Federal Tax Credit so your loan can be 30% cheaper.

Lease/PPA

One of the most common options of going solar is to get a solar lease or PPA (power purchase agreement). Instead of paying for a solar system, you pay a fixed monthly amount to install solar panels and use the electricity they generate. It’s easy and affordable. Of course, it provides smaller income than outright purchase or loan but it still makes you savings. What is more, it’s worry-free. You don’t own the equipment, so you don’t have to worry about installation, monitoring, and repairs.

Which option of financing photovoltaic is the best?

You can’t answer this question. It all depends on investor and his capability. Everyone has to analyze their own individual case and chose the best option for him. Moreover, options can vary, depending on the state, so you should do research in your area.