Now Available: A Free Guide to Home Solar Financing Options

Now Available: A Free Guide to Home Solar Financing Options

by on in Solar Energy, Solar Panels, Solar Power

Today (Feb. 12) The Clean Energy States Alliance (CESA) introduced A Homeowner’s Guide to Solar Financing: Leases, Loans and PPAs, a guide to help homeowners understand and choose the best solar financing option for their needs. The guide covers direct purchases, leases, loans, and power purchase agreements (PPAs), the most popular mechanisms for financing residential solar power arrays in the U.S.

As more solar installers, banks and other companies have gotten into the business of installing and financing solar, like Clean Power Finance and others, the choices for homeowners have grown dramatically. However, the myriad of choices can also be overwhelming to homeowners looking to go solar and buying a $15,000 to $30,000 solar array outright isn’t a possibility for many homeowners so the financing options offer viable alternatives that don’t hurt the pocket as much. 

“There are lots of financing options for homeowners who might not be able to afford the upfront cash outlay to buy a system outright,” said Nate Hausman, CESA project manager and author of the solar guidebook. “However, not every financing option is right for everyone. This guide is designed to help.”

Each financing mechanism has advantages and disadvantages. For instance, in a power-purchase agreement the homeowner pays a set price for the power produced by they array on the house on a kilowatt hour basis. This rate is sometimes higher than power from the grid and the prices are fixed over time. So if the cost of electricity from the grid goes down when it is expected to go up the homeowner isn’t likely to see the returns on the investment that were expected.

If the homeowner has a lease for the array the homeowner is paying a fixed price for the array every month. If the cost grid-supplied electricity goes up more than expected the consumer saves more comparatively.  

The report was made through the New England Solar Cost-Reduction Partnership, a project under the U.S. Department of Energy SunShot Initiative Rooftop Solar Challenge II. “CESA is working with states to provide consumer-friendly information that can help speed the widespread adoption of solar energy,” said CESA Executive Director Warren Leon.

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