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January 22, 2022

How to Finance Solar Panels: The Ultimate Guide

The average cost of solar panel installation is about $12,000, after-tax incentives.

Solar panels have their benefits. You reduce the cost of utility bills, increase the value of your home, and contribute to a better environment.

It does take a while to see a return on investment. The upfront costs of solar panels don’t have to dissuade you from installing solar panels.

You can finance solar panels. Read on to discover how to finance your solar panels.

1. Home Equity Loan

Have you owned your home for several years? You’re likely to have equity in the home.

A home equity loan lets you borrow against the equity in the home. You repay the loan just like any other loan. You have installment payments of equal amounts for the life of the loan.

A home equity line of credit lets you have rolling credit based on the amount of equity you have in the home. A line of credit is similar to borrowing against a credit card.

2. Renovation Loan

A traditional loan like a renovation loan is straightforward. You borrow a specified amount of money from the bank.

The bank combines the interest and principal into monthly installment payments. You can pay the loan back over a period between two and five years.

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3. Installer Financing

Solar installation companies know that financing solar panels isn’t always easy. Many simplify the process by offering to finance solar panels.

You’re only dealing with one company for the purchase, installation, and financing of solar panels.

4. Lease Agreement

Lease agreements are becoming popular. With a solar lease, the installation company or bank owns the solar panels.

You pay a certain amount of money each month for the right to use solar panels. The advantage of a lease is that you pay no money down. If you want to see an installer that has financing with zero down, visit site and learn more.

A power purchase agreement is similar to a lease. You agree to purchase the power produced by solar panels, while another company owns them.

What You Need to Finance Solar Panels

How can you proceed with financing solar panels?

Start with your credit score. Lenders look at this to determine your creditworthiness. Your credit score also determines your interest rate.

Lenders ask for additional documentation. They’ll want to see recent payroll stubs, a complete loan application, and possibly recent tax returns.

Have that paperwork ready to go before your first appointment with installation companies.

How to Finance Solar Panels

If there’s a drawback to installing solar panels, it’s the upfront costs. It’s possible to finance solar panels to defray those costs and start to reap the benefits of solar.

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You can lease solar panels, finance solar panels with installers, get a loan, or use existing equity. With so many options, it’s easy to finance solar panels.

Do you want more tips to make your home amazing? Check out the Home Improvement section of this site.

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