Finance Options

Learn about the different solar financing options

Determining The Right Finance Option

There are a few factors to consider when determining the right finance option for your decision to go solar.

 
  • Consider your budget: If you have the funds to pay upfront, a cash purchase may result in the highest savings. If not, explore alternative options that do not require any initial payment.
  • Assess ownership preference: If owning the system is important to you, your best choice is to either finance the system or purchase the system upfront.
  • Review your tax liability: If you have ownership options with cash or loan, you may be eligible for a tax credit. However, if you do not have any tax liability, you may not qualify for the tax credit. In that case, you should consider a lease or PPA instead.
  • Analyze long-term savings: Compare the potential savings, incentives, and costs associated with each finance option to determine the most cost-effective solution.
 

Remember that the right finance option varies from person to person. It's important to consult with a Better Earth Solar Professional and a Tax Professional to discuss your specific circumstances and find the best fit for your solar project.

 

Ownership Options

Cash Purchase:

How it works:

  • When you choose the cash option, you are electing to pay for your entire system upfront. With this option, you will not have any monthly solar bills to pay; only the monthly connect charges to your utility company.
  • To calculate your return on investment (ROI), divide your average monthly electric bill by the net cost of your system (after tax credits have been applied) to determine the total number of months to break even. Keep in mind that this is a conservative estimate and does not account for potential utility rate increases.

Pros:

  • No monthly solar bills
  • Enjoy long-term savings
  • The typical return on investment (ROI) is roughly 6-10 years

Cons:

 
 

Solar Financing:

How it works:

  • When you choose to finance your system, you have the option to select from a range of different finance terms and lengths. Many of our customers choose the longest terms available in order to maximize their day 1 savings.
  • It's important to note that all of our finance options require $0 down payment and can be prepaid at any time without incurring penalties. The monthly solar bill amount will vary based on the size of your system and the finance term you choose.
  • This monthly solar bill will replace your monthly electric bill. However, please keep in mind that depending on your utility company, you may still be required to pay them a monthly amount.

Pros:

  • No upfront cost or installation costs required
  • Switch your electric bill for a solar bill
  • Enjoy a predictable solar bill instead of a fluctuating and increasing electric bill
  • Once the system is paid off, no more payments will be required

Cons:

  • Interest payments can increase the overall cost
  • Adding debt to your credit report may have negative impacts on your credit rating
 

 

Non-Ownership Options

Solar Lease:

How it works:

  • By leasing your system, you can protect yourself from rising rates imposed by utility companies. With $0 down, you can have a system installed and pay a fixed monthly amount. It's important to note that leasing and Non-Ownership Options do not make you eligible for the Federal Tax Credit. The financier is the one who can claim this credit.
  • One of the major advantages of our Non-Ownership Options is that the financiers will also have it’s own warranties and guarantees for your system.

Pros:

  • No upfront cost
  • Have a fixed monthly bill
  • Maintenance, monitoring, and production are all guaranteed.

Cons:

  • You do not own the system
  • You do not qualify for tax incentives
  • Long-term savings might be lower compared to ownership options
 

Power Purchase Agreement (PPA):

How it works:

  • When choosing a PPA option, similar to the lease option, you protect yourself from increasing rates imposed by utility companies. You are currently in a "Power Purchase Agreement" with your utility company, which means you agree to buy power from them at a fixed rate and the utility can raise your rate any amount at any time. The Solar PPA operates in the same way, except that the rate you pay will be lower than the utility rate, and it can only increase by a fixed low amount per year.
  • Just like our other Non-Ownership Options, the financiers will also have it’s own warranties and guarantees for your system.

Pros:

  • There is no upfront cost
  • Pay less per kWh than what the utility company charges
  • You only pay for the energy produced
  • Maintenance, monitoring, and production are all guaranteed.

Cons:

  • You do not own the system
  • You do not qualify for tax incentives
  • Long-term savings might be lower compared to ownership options
 

 
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Last updated on November 29, 2023