Whether you choose to purchase or finance your solar energy system, you’ll start saving on utilities from day one.

Purchase

By buying solar panels, you own the system and the energy it produces. Purchasing makes you eligible for the 30 percent federal Investment Tax Credit (ITC), which lowers the net cost of your system, as well as any state or local rebates. Between these incentives and utility bill savings, most systems pay for themselves within 20 years. Plus, purchasing solar can increase the resale value of your home.

Loan

A loan gives you the flexibility of owning your solar panels and paying for them over time. There are various terms and conditions available to make going solar work within your budget, including $0 down. With a loan, you can take advantage of the federal ITC as well as state or local initiatives you may be eligible for. You can also deduct loan interest from both your federal and state income taxes.

Leasing or signing a Power Purchase Agreement allows you to enjoy the benefits of solar power without paying up-front costs for panels, equipment, and installation.

Lease

With a solar panel lease, the solar vendor you choose to work with, such as Sunrun or SunPower, owns your solar energy system. Instead of making payments on the system itself, you pay a fixed monthly amount to use the energy the panels produce. For many customers, the cost of their lease and energy usage is lower than their previous electricity bill.

PPA

With a Power Purchase Agreement, you have a solar energy system designed and installed on your roof at little to no cost. As part of the agreement, you pay a fixed price per kWh of energy produced by the system. A PPA allows you to enjoy the benefits of going solar without worrying about up-front costs, maintenance, or performance.

With a PACE loan, funds allocated by the local government are made available to those who want to invest in solar. Instead of repaying a loan in monthly installments, PACE funds are paid back once a year through an assessment that is added to your property tax bill. Unlike other loans or leases, a PACE loan is attached to the property itself, which simplifies the transfer process if you decide to move.

As a homeowner, you have the option of using the equity in your home to pay for solar panels. Contact your lender to find out how much equity is available and what the terms of a home equity loan for solar installation would be. Since a home equity loan is backed by collateral, your credit isn’t as important as it would be with another type of loan.

Another option is to refinance your entire home loan, adding the cost of a solar energy system to the balance. This wraps the cost of your solar panels into your monthly mortgage, eliminates your electricity bill, and allows you to take advantage of the federal tax credit.