Have you ever wondered if it’s worth installing solar panels? In this article, we will give you an overview of how solar panel works and how you can finance one using a solar loan calculator.
In addition, we will also provide several tools to help you appreciate the importance of your device and your energy efficiency.
Let’s dive in, shall we?
Table of Contents
What are Solar Panels?
A solar panel is a series of solar cells that can be used to produce electricity by photovoltaic effects. These units are grouped in a grid-like pattern upon the surface of the device. It can also also be represented as a series of photovoltaic modules, installed on the framework supporting it. A Photovoltaic ( PV ) module is a packed and attached 6×10 solar cell assembly.
These panels are long-lasting as they wear out slowly. In a year, their usefulness decreases by just one or two percent (sometimes less).
How much do solar panels cost?
Solar panel prices typically vary from $11,144 to $14,696. Also, the average value per watt for solar panels varies from $2.51 to $3.31.
Learning the overall cost per watt is useful, but what does $2.91 / watt really mean?
The cost of setting up solar for your home or company depends on how much energy you choose to generate. A larger installation would cost higher and you will need to purchase additional equipment and more time to install it. Are your expenses making you worry? Use the Solar loan Calculator now and get aware!
Pros of using solar panels
● Huge savings on energy bill
Net metering allows homeowners to cover their electricity costs with the energy generated by their solar panels. They then sell the surplus electricity to the utility. It can typically be added to their energy bills as a discount. Homeowners can use this discount to cover additional power costs.
● No more price increase in electricity
Solar panels shield you from that energy prices. Since you’re generating your own electricity, you don’t have to import the costly fuel from your company. So, rising energy prices are a preoccupation of the past. In reality, rising costs can potentially be a good thing when you add solar. You’d understand how much you’re saving if you checked your solar panel expenses on your solar loan calculator now!
● Lower installation cost
Although energy rates continue to be more costly, solar costs have begun to decline. Solar is cheaper than it has ever been; in fact, over 70% of the cost has gone down in the last decade. These low costs make solar energy more available to more customers than ever before. Solar construction will be much easier if you take advantage of solar benefits. For example, installing a solar panel by the end of 2020 may qualify you for a 26% federal tax credit.
● Make money on solar panels
Solar panels can not only reduce the energy charge, but they can also be a source of extra revenue. Net metering helps you to make money by selling the excess electricity your solar panels produce. Some states have certain performance-based rewards, such as Solar Renewable Energy Credits (SRECs). They have the potential to win you thousands of dollars a year depending on where you live. The revenue from net metering, your energy bill savings, and other benefits, will pay for the expense of the scheme.
● Unlimited energy
Another huge selling point for solar energy is that it is clean energy. This ensures that the supply is not drained when you consume the fuel. This means we are not wasting the energy of the sun in any way.
Cons Of Using Solar Panels
● High start-up cost
The high initial expense is one of the major disadvantages of solar panel systems. Right today, the solar energy cost in the US is around $3.18 per watt. So, a 6 kW solar panel system will cost you about $19,080 on average, regardless of the federal tax credit.
The total cost of the solar panel can vary based on the state and the benefits that you apply for. Luckily, there are opportunities for solar finance open. A zero-down solar loan allows saving money on your power bill and enjoy the rewards of buying a solar system. If you require a solar loan, a solar loan calculator helps to decide the amount you could afford to borrow.
● May require a wide area for installation
Solar panels need areas to fulfill energy needs. For example, a roof would almost always have enough space for residential installations. Even then, if you look at massive grid-scale solar arrays, space can be a little bit of a challenge.
● Moving solar panels can be a challenge
One of the drawbacks of building solar panels is the difficulty in moving them. The net metering arrangement with your utility is set on the house. In addition, seeking someone to uninstall and re-install the solar panels can be expensive.
Where Do I Get Loans For Solar Panels?
Major financial companies sell specialist lending programs to homeowners who plan to buy a solar energy device. They are either secured or unsecured loans. Homeowners can back secured loans by collateral, such as mortgages on your house. Unsecured loans do not require the borrower of the loan to have an asset for collateral; however, the rate of interest might be higher and the volume of the loan lower than that of secured loans.
● Solar panel producers provide loans, mostly through their solar installation networks.
● Credit unions around the country are designing renewable energy lending programs for homeowners and are also selling low-cost solar loans.
● Global lending agencies are selling specialized loan packages that target residential solar panel systems.
● Public-private alliances will provide services to fund renewable energy loans. Local government agencies are working with private developers to provide solar loans with reduced interest rates and no fees.
Use the solar loan calculator to predict monthly installments on your debt and how much cumulative interest you pay.
Solar Tax Credit
The State Solar Tax Credit allows you to subtract 26% of the cost of building a renewable energy system.
A solar energy plant qualifies you to earn a solar investment tax credit. Insufficient tax liabilities will “rollback” the remaining deductions in the future as long as the tax credit is in place. However, by agreeing on a solar installer lease or PPA, you are not really the owner of the facility. As a result, you cannot earn a tax credit.
Solar Loan Rates
The solar panel loans have the same fundamental requirements as other forms of loans:
● Lower interest rates lead to lower net payments for borrowers.
● Shorter-term loans usually have low solar loan interest rates and higher installments over the duration of the loan.
● Solar panel loans can be guaranteed or unsecured. It results in a broad variety of interest rates, term periods, and collateral requirements.
● You can also find interest in free solar panel loans in various places.
There is an important difference between solar panel loans and other home renovation loans. A solar panel loan helps you to own a property that produces considerable financial benefits. This covers the amount of electricity produced by the solar power system. It also covers 30% federal investment tax credit, and other related discounts, such as solar renewable energy certificates (SRECs).
Solar Panel Financing
Solar loans are a perfect choice for solar panel finance when you lack the cash to pay. Certain solar energy bonds cover the full expense of your device. It is only in return for lifetime savings on your electricity bills.
Step 1– To start with, make sure you choose the right partner. Financiers assess the creditworthiness of the counterparts that use the solar power generated. You need the right partner to carry out the project carefully.
Step 2– Developers require a construction loan, a term loan, or both, on accepting the key aspects of the project. They also ask for and review different debt finance solutions.
Step 3– Before choosing a financier, developers need to consider the entity’s context which will supply their money. Any main questions may include: What is the track record for the financier? How long will their funding process usually take, from submission to fund issue? Are there any hidden risks or the risk of refinancing if one fails to recover the debt completely?
Step 4– Some investors have also tried an external source of tax equity. The expected amount of tax appetite depends on factors such as the scale and expense of the building.
Step 5– Developers also need to provide the required documents and check the status of each. For example, if the PPA is in the drafting process or has been implemented by all relevant parties. Many ventures are delayed when the contracts are not finished. Unexpected problems too delay the execution of the project.
Benefits of Solar Financing
The solar loan helps to remove the financial burden of paying for your solar system in one blow. This is also a major challenge for future solar customers. Alternatively, you can pay off the solar panel over time by making monthly installments. Customized solar loans, or renewable loans, vary from 3 to 10 years.
The other big advantage is making instant money on your electricity bill, and then pay off your investment over time. You could be in a position where your solar energy savings will outweigh your debt repayments.
Best Way to Finance Solar
Green loans are low-cost personal loans that commercial banks provide. These loans support the environment and society. Green private loans have interest rates almost matching your home loan, as long as you use funds for renewable uses. If you prefer not to invest your money, the next best choice for you is a green personal loan.
A financial firm benefits those who cannot afford further on their home loans. It also helps those who choose a reduced interest rate bonus by ensuring that the debt is repaid easily. A personal loan can work out as a cheaper choice despite high-interest rates. Some creditors take into account the intent of the loan, the homeownership status, and other factors to lend loans on low-interest rates.
A finance firm pre-approves your loan. It also encourages you to compromise as a cash purchaser and ensures the best deal for your money. Solar loan calculator loanpal will help you track and be aware of your expenses when you take a solar loan.
Using solar panels could be an efficient source of energy at a cheaper cost. When considering installing solar energy for your house, there are financial opportunities for homeowners to review.
You should consider the advantages and disadvantages of leasing or financing solar panels. On a positive note, you will normally get an excellent return on investment, even when paying for debt on the loan. This can also have several other advantages, such as higher land prices, lowered grid dependency and a lower carbon footprint.
Make sure to do the math and use the solar loan calculator!
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