Average monthly payment for solar panels
If you are looking to get a solar energy system for your home through leasing or a loan, you will want to know how much it will cost you each month. Different lease types have different costs per month. Multiple factors affect the amount you pay each month for your solar energy system. Although It is also worth noting that incentives can bring down the costs of your monthly payments.
Loans for solar panels
If you are looking to own your solar energy system. You can for your solar energy system through different loan methods. The options for financing will depend on the interest rates, repayment terms, and any perks that are offered with the loan. These loans typically come in the form of:
- Personal loans from a financial institution.
- Government loans are provided by the Federal Housing Administration’s (FHA) PowerSaver program.
- Home equity loan through a bank with your home as collateral.
These methods are ways you can finance the installation and purchase of your solar energy system. You are also eligible for benefits such as tax credits, rebates, and other incentives that you can claim. Our article on Solar financing goes into more depth regarding financing for solar energy systems.
Types of leases for solar panels
If you are leasing solar panels, there are different types of leases that you can choose. These lease types differ in terms of ownership of the system, their pricing, and how the tax benefits apply.
An operating lease is where the lessor owns the solar energy system, while you as the lessee make monthly payments to use the solar panels. The tax credits will go to the lessor, along with any other incentives.
Solar Power Purchase Agreements (PPA)
A solar power purchase agreement is similar to an operating lease, although the pricing is dependent on the energy generated by the solar energy system. This amount will be calculated by the kilowatt-hour amount used.
A capital lease is normally meant for commercial or business uses. The monthly payments of the lease are made to a financial institution, with the option to purchase the system eventually. These leases can last anywhere between 5 – 20 years at most. Although, with this lease, you will be able to take advantage of the tax credits and benefits.
Factors that affect solar costs
Generally, the factors that affect the costs of solar installations also affect the monthly costs of solar leasing.
- Location is one of the biggest factors. The local cost of electricity and solar installs will determine how much your solar energy system will cost. There is also the climate, which plays a part in offsetting the cost of your solar energy system. Different locations also have varying incentives and benefits for solar installations.
- Energy usage will also help you decide whether leasing solar is a cost-effective option. If your electrical bills are already low in comparison, you may not save any money through a solar lease.
- Your home and solar energy system will also factor into the monthly costs. A large, complex system with higher-end components will cost more than a simple system for a small home.
- Payment Escalators are included in a solar power purchase agreement and will directly affect the lease payment. The point of the payment escalator clause is to help you save money on energy costs. Although you would have to understand the anticipated rate of inflation for your state’s energy costs to avoid overpaying on your solar lease.
How much could I pay monthly for solar?
Monthly leasing payments
When leasing solar panels, you could expect to pay anywhere between $50 to $250 per month. With this amount, you’d still see savings on your utility bill in your home. Although you won’t be eligible for tax credits, and rebates since you don’t own the solar energy system.
Over longer leases reaching 10 years or over, you may have spent enough to buy a new solar energy system outright. Choosing whether to have a solar system of your own will help you decide whether to lease or take a loan for a purchase.
Monthly leasing payments
If you choose to take financing, the cost will be dependent on the system you wish to purchase and the rates on offer. You have to consider the interest rate and repayments terms of your loan. It would be best to use a loan calculator to help you figure out exactly how much you will be paying per month. It will also detail the number of payments you will make and the total interest. A solar loan calculator like the one on Nerdwallet can help you see the details of your loan.
There is also the advantage of being able to make the most of your tax credits, rebates, and other incentives when owning your system. Which can also bring down the cost of purchase. We have an article that goes in-depth about solar energy tax credits and rebates.
If you choose to finance a solar energy system with us, we will help you throughout the entire process. We have some of the best rates on offer in the industry, at 1.99% with a 25-year term.
We can help you get started with solar energy.
If you are looking to start your transition to solar energy, we are here to help. Our website also has a free online estimate tool that generates a personalized report for you from a simplified questionnaire. That report will contain the potential savings you can net, and the cost of a solar energy system installed on your property. You can also contact us directly via phone at +1 (602) 363-8919 or via email at Scott@elitesolarenergy.org for more information regarding solar energy for your property.