Solar Financing
Solar PPA and leasing solar panels can help you reduce your financial burden of going solar!
Solar PPA has been and is still is a great approach to going solar and has come along way from a time when this concept was like a pipe dream to now when almost everyone can go solar using solar PPA. The issue has always been the cost of going solar and how to overcome the high initial cost of solar panels that was a huge barrier. The cost of solar panels was about $100/watt in the early 1970s compared to it now at less than $1/watt.
“Solar as a Service” approach to going solar – Leasing solar panels & Solar PPA financing
Because of this high cost not so many people were able to afford going solar until when the concept of presenting “solar as a service” was pioneered and unlocked consumer demand for solar direct from their residential rooftops. The commercial sector was not left behind either and used the same approach to install solar panels on their rooftop.
Instead of consumers buying for solar panels to install into their rooftops, solar businesses adopted “solar as a service” approach where solar panels installed in a consumer’s rooftop are owned by solar investors (third-party ownership) and the only thing consumers are paying for is the electricity (in kWh) they consume from the solar electricity generated by these panels.
This approach reduced the financial burden of the solar buyers to own solar panels and instead of buying them; they are either leased or sourced using solar power purchase agreement (solar PPA) hence making it easier for them to go solar.
Solar businesses invented such solar financing schemes reducing the need for solar adopters to own solar panels and still enjoy the benefits of going solar such as reduced carbon footprint, reduced electricity bill and other solar benefits.
Under this approach, solar businesses are able to install many solar panels making use of the investment tax credits, rebates which solar investors would claim in their taxes and this idea helped to hasten the transition to a decentralized grid.
This approach is useful to overcome the initial cost of solar panels and is still applied today and people interested in going solar can go solar with zero down payment or with no money down and start saving money immediately.
It is estimated that using such an approach, solar adopters can save from 20% to 30% of their current energy bill if they decide to go solar. To determine your specific solar costs, you can check out this EnergySage Solar Panel Calculator to estimate your energy savings.
Solar loans and cash financing of solar panels
With the decreasing solar costs, solar loans and going solar on cash terms or paying the whole solar cost upfront (cash option) has become popular. The cost of solar even without subsidies in some countries like Germany is at grid parity.
However, solar PPA and solar lease are the financing options that are popular in many states in the US where such models have been approved.
Solar PPA and solar lease have approved solar PPAs and solar leases with the exception of states like Florida where solar leasing are prohibited. The average price of electricity in states that allow PPAs is about $.15/kWh while the average PPA price in the USA is $.11/kWh and rises with a solar ppa escalator of 2.9%.
To determine what solar financing will be ideal for your specific case you could start using the EnergySage online solar marketplace platform—an interactive solar platform that will present to you very specific information when it comes to:
- What financing options are ideal for you, solar ppa, solar lease, solar loan or cash options depending on your solar costs, the state you live in and financing available to you.
- How many solar panels do I need?
- By using a solar panel calculator, you can actually determine: is solar worth it for your home or business depending on your solar potential, solar costs and savings.
- Is leasing solar panels available in your specific state?
- What solar options are suitable for your case and approved in your state?
- Are solar panels worth it?
- How much are solar panels?
- Is solar worth it
- Solar panels review
Get started now with the EnergySage and learn more about your specific financing needs for your solar panels.