The cost to install solar panels decreased by 50% over the last 10 years. That doesn’t mean that you can pay cash to install solar panels. It still costs about $20,000 to install solar panels on your home.
There are financial benefits as well as environmental. However, you’d have to wait a few years to see an ROI on your solar installation.
How can you finance solar panels in the meantime? Read on to learn the top ways to reduce the cost of your solar installation and finance the rest.
- Tax Credits
The federal government created tax credits to move homeowners away from fossil fuels and to make solar more affordable.
In 2021 and 2022, you can receive a federal solar investment tax credit of up to 26% of the cost to install solar panels. The tax credit drops to 22% in 2023.
There are also state incentives and rebates, too. Blue Raven Solar says that South Carolina offers a 25% tax credit on top of federal tax credits.
You might be able to cut your installation costs in half or more when you learn what’s available in your state.
- Personal Loans
Personal loans are a way to finance the rest of the installation. These are loans that range from $1,000 – $50,000 that you can use for any purpose.
You pay the principal and interest back in monthly installment payments. The terms of the loan vary from 12 months to 15 years. You do need to have an excellent credit score to get approved and get a low interest rate.
- Installer Financing
Solar panel installers often work with financial institutions to make solar financing easier for customers. It’s easy to use one place for the installation and financing and saves you from contacting banks on your own.
You should compare the terms of the installer loan with other forms of financing. You may end up paying more in interest for that convenience.
- Home Equity Loan
Do you have a lot of equity in your home? With interest rates being as low as they are, it may make sense to get a home equity loan to finance solar panels. You can use the equity from the loan to pay for the installation.
Plus, the 2017 Tax Cuts and Jobs Act allows homeowners to deduct interest on home equity loans used for major improvements. Yes, solar panels fall under that category.
You should consult with a CPA before you move forward with this loan because the law may change.
You Can Finance Solar Panels
Solar panels aren’t out of reach because of the cost. With tax incentives, you can dramatically reduce the cost of solar panel installation.
A smaller bill means that it’s easier to finance solar. You can take out personal loans, work with your installers, or refinance your home.
It’s easier than ever to reap the benefits of solar panels. For more ways to improve your home, visit the Home Improvement section of this site.