Nearly one year ago, the cumulative number of U.S. solar installations broke one million, according to the Solar Energy Industries Association. Solar is accounting for a large portion of new electricity generating technology. 64% of new energy generating capacity in the first quarter of 2016 was solar energy. Many homeowners are adopting this rapidly growing alternative energy. However, installations are still expensive. The price is often more than $10,000. Solar companies do offer leases on solar panels, but many homeowners are choosing to own the panels outright. Homeowners can pay cash or take advantage of lending options like a 20-year solar loan or home equity line.
If you’ve got the cash, paying outright for a solar installation can be cheaper in the long term than a lease or loan. A married couple of financial managers in California, profiled by Consumer Reports, calculated that it would take only 6 years for their $17,668 installation to be paid off. After those six years, the couple estimates that they will be saving nearly $3000 per year. The couple also took advantage of federal tax credits and a rebate from the State of California.
Home Equity Line
Often used for home improvement projects, a home equity line allows homeowners to take out a line of credit using their home as collateral. A homeowner in Arizona took advantage of her available home equity line to install solar panels for $10,258. For her small 1,400 square foot home, this installation provides all of her electricity needs. Her only electric bill is a $10 per month connection fee. She paid off her line of credit in 37 months and only paid $300 in interest. Now she saves more than $65 per month on electricity.
A 20-year solar loan has the advantage of no up-front costs. A family in Maryland installed their solar panels using this option. Although the solar installation covers all their energy needs, the family is only breaking even. Their previous energy bills equal the current cost of the loan repayment and connection fee. While they are not saving money yet, their energy prices will drop when the loan is paid off.
Homeowners have many options to pay for the installation of solar panels. In some cases, the switch makes monetary sense. The cash-paying family in California will start saving on the installation in six years. For other families, installing solar panels fulfills a personal need more than a monetary desire. The Arizonan homeowner who used a home equality line of credit can say with pride that she has been living with clean energy since 2011. Whatever your reasons for going solar, it’s possible to pay for an installation with a loan, lease or line of credit.