What is the best way to go Solar?

Going solar by installing solar panels on your roof offers three common options, each with its own benefits and considerations:

  1. Solar Lease or PPA (Power Purchase Agreement): This option is similar to a long-term auto lease, typically lasting 20 to 25 years. With a solar lease or PPA, you don’t have any upfront costs, but you make monthly rental payments for the solar panels. The savings with this option are usually the lowest, ranging from 10% to 30%. However, there’s a new fixed-price solar PPA available that can offer savings similar to a loan purchase, typically in the range of 40% to 60%.

  2. Solar Loan or Solar Financing: This ownership option allows you to purchase the solar panels by taking out a loan. You won’t have upfront expenses, and the savings from solar often exceed your monthly loan payments, typically resulting in savings of 40% to 60%.

  3. Solar Purchase or Cash Purchase: With this option, you buy the solar system outright, enjoying immediate savings. You can recover your investment in 5 to 10 years, and this option offers the highest savings potential of around 90%.

Let’s break down the differences between these options:

Solar Lease/PPA:

  • You don’t own the solar panels; it’s like renting solar power.
  • No upfront payments required.
  • Monthly rental payments for 20 to 25 years.
  • Typically, no earnings from state incentives.
  • No increase in home value.
  • No lien on your home.
  • Savings range from 10% to 30%.

Solar Financing:

  • You own the solar panels, financed through a loan.
  • No upfront payments required.
  • Monthly loan payments for 5 to 10 years.
  • Potential earnings from state incentives.
  • Increased home value.
  • No lien on your home.
  • Savings range from 40% to 60%.

Solar Purchase (Cash):

  • You own the solar panels outright.
  • Upfront payment required (though you’ll receive a tax credit).
  • No monthly payments after purchase.
  • Potential earnings from state incentives.
  • Increased home value.
  • No lien on your home.
  • Savings of around 90%.

In summary, the best way to go solar depends on your financial situation and preferences. Cash purchase offers the highest savings, followed by solar financing. Solar lease or PPA is a good option if you don’t want upfront costs, but the savings are relatively lower. When considering a lease or PPA, make sure to choose a fixed-rate option without annual escalators for the best long-term savings.

Regardless of your choice, it’s essential to calculate your savings and understand your specific state incentives before making a decision. Additionally, it’s advisable to consult with a reputable local solar installer to get a customized evaluation of your solar options based on your location and energy needs.

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Jon is a professional Solar and Battery Sales and Installation specialist with over 15 years of industry experience. He runs the MySolarHome YouTube Channel and helps homeowners and businesses go Solar.

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