How To Finance a Solar
Installation in Pennsylvania,
and All of Our Service Areas?

Several financing options are available for solar installations, each with its own set of benefits and considerations. Here are the most common options:

1. Cash Purchase

Benefits:

• Ownership: You own the system outright and benefit from all the savings on your electricity bill.
• Tax Incentives: Full access to federal tax credits (currently 30% under the ITC) and any state or local incentives.
• No Interest Payments: No ongoing financing costs, leading to the highest long-term savings.
• Increased Home Value: Potentially increases the value of your property.

Considerations:

• High Upfront Cost: Requires a significant initial investment which might be challenging for some homeowners.

2. Solar Loans - Secured (home equity loans) and unsecured loans.

   Secured Loans: These require collateral, usually your home, but offer lower interest rates.
   Unsecured Loans: No collateral is required, but they typically come with higher interest rates.

Benefits:

• Low Upfront Cost: Allows homeowners to install solar with little to no upfront cost.
• Ownership: You still own the system and can benefit from tax incentives.
• Fixed Payments: Predictable monthly payments over a set term.

Considerations:

• Interest Payments: The total cost over time will include interest, reducing overall savings.
• Credit Requirements: Approval depends on your credit score and financial history.
• Energy Management: You must be more conscious of your energy consumption and usage patterns.

3. Solar Leases

Benefits:

• No Upfront Cost: The leasing company installs the solar system at no upfront cost.
• Maintenance: The leasing company typically handles maintenance and repairs.
• Lower Electricity Bills: Monthly lease payments are often lower than previous electricity bills.

Considerations:

• No Ownership: You do not own the system and cannot claim tax incentives.
• Long-Term Savings: Generally lower savings compared to purchasing the system.
• Transfer Issues: Can complicate selling your home if the new owner does not want to take over the lease.

4. Power Purchase Agreements (PPAs)

Benefits:

• No Upfront Cost: The solar company installs the system at no upfront cost.
• Lower Electricity Bills: You pay for the electricity generated by the system at a rate usually lower than your utility's rates.
• Maintenance: The solar company handles maintenance and repairs.

Considerations:

• No Ownership: You do not own the system and cannot claim tax incentives.
• Long-Term Contract: Typically involves a long-term contract, which may include annual price escalators. system.
• Transfer Issues: Similar to leases, can complicate home sales.

5. Property Assessed Clean Energy (PACE) Financing

Benefits:

• No Upfront Cost: Covers the total cost of the system.
• Repayment via Property Taxes: Payments are made through an assessment added to your property tax bill, typically over 10-20 years.
• Transferable: The financing can be transferred to the new owner if you sell your home.

Considerations:

• Availability: Not available in all areas.
• Interest Rates: Can be higher than traditional loans.
• Tax Implications: Adding to property tax can affect mortgage escrow calculations.

Each financing option has its own advantages and trade-offs. The best option depends on your financial situation, credit score, and long-term goals. Consulting with a solar installer and a financial advisor can help you determine the best approach for your specific circumstances.

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