Education
How to Pay for Solar
There are four main ways to finance a solar panel system:
Paying upfront
Taking out a loan
Signing a power purchase agreement (PPA)
Leasing the system
Paying Upfront
The best way to maximize your long-term savings is to pay for your solar system upfront. By covering the full cost today, you’re essentially pre-paying for 25+ years of electricity at a fixed, low rate, shielding yourself from future utility price hikes.
Because solar provides double-digit returns in most cases, it can be viewed as an investment that typically pays for itself in 5–10 years, depending on your location.
The downside? The upfront cost can be high, which is why less than 10% of homeowners choose this option.
Financing Solar with Loans, Leases, or PPAs
For most homeowners, financing solar with a loan, lease, or power purchase agreement (PPA) makes it easier to get started without a large upfront payment.
When comparing financing options, consider:
How your monthly payment compares to your electricity bill
Whether the payment stays fixed or increases over time
How long you'll be making payments before owning or renewing the system
Solar Loans
A solar loan allows you to buy your solar system without paying for it all at once. Once the loan is paid off, your panels will continue producing free electricity for decades, typically lasting around 30 years.
Solar loans work like mortgages or car loans—key factors to consider include:
Loan term length
Interest rate
Upfront costs, such as origination fees
Solar Leases
With a solar lease, you make monthly payments for a solar system installed on your home—but you don’t own it.
Because a third-party company owns the panels, they are responsible for maintenance, performance, and warranty claims. However, most leases last around 25 years, and at the end of the term, you may not own the system or continue receiving free electricity.
If considering a lease, look at:
The monthly payment
Whether your payments will increase over time
Power Purchase Agreements (PPAs)
A PPA is similar to a lease in that you don’t own the system. However, instead of paying a fixed monthly fee, you pay for the electricity the panels generate.
With a PPA:
Your payments may fluctuate monthly based on energy production
The electricity rate is usually lower than utility prices
Rates may increase annually based on contract terms
Which Option is Right for You?
Each payment option has pros and cons depending on your budget, long-term goals, and energy needs. Whether you want to own your system outright or keep your upfront costs low, there’s a solar financing plan that works for you.
Interested in exploring your options? Contact us today for a free consultation!
Where to Reach Us
Address: 200 S. Bayard St. Waynesboro, VA 22980
Phone: (540) 649-7467
Email: [email protected]
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