Soaking Up Rays and Savings: A Beginner’s Guide to Financing Solar Panels for Your Business or Home
Photo: Zbynek Burival/Unsplash
If you're looking to repower your home or business with clean energy, you have a myriad of options, from financing solar panels to getting a heat pump.
Switching to solar power seems daunting to many individuals and businesses. Yet, affording solar power is 100% possible as there are many options for financing these projects and multiple organizations who can help you with this goal. Many small businesses across the country have already made the switch. Following in their footsteps could save you money, help draw people to your business, and, most importantly, reduce greenhouse gas emissions.
“Having a smaller electricity bill frees up money so you can do those things that you want to do that you are struggling to do,” explains Olivia Nedd, Policy Director on the Access and Equity Team at Vote Solar. “Now there is more money to build your business.”
Options for financing solar panels range from paying in cash to allowing a third party to own your panels. You do not even need to have a solar panel attached to your home in order to access solar energy. Researching and financing solar is a multi-step process that can help you discover whether solar power suits you.
Step 1: Is Solar Right for you?
To begin, it is important to analyze whether your business or home is a good fit. With the current solar capacity installed nationwide, there is the ability to power 18.6 million homes. However, an old roof with a lack of sunlight may not be suitable for solar panels. Talking to solar professionals can help you figure out your eligibility. Multiple organizations help individuals and businesses find out if solar panels suit them, including Energy Sage, Sun Number, and Aurora.
Even if your roof is not suitable for solar, there are community solar projects that allow you to still receive its benefits. Community solar projects can help those who are not eligible for solar panels, prefer not to install panels, rent their homes, or live in shared housing. Essentially, you purchase solar energy from a remote location and receive the benefits of savings on your electric bill. These remote locations are the community solar projects themselves, and some of them can power hundreds or thousands of homes.
Energy Sage, a Green Business Network member, is a particularly popular organization that can guide you through the process of finding a community solar project, comparing different solar companies, and researching how to go solar. Meanwhile, for those who wish to join a community solar project, Green Business Network member Arcadia is a good company for those living in New York, Maryland, Massachusetts, Colorado, California, Georgia, New Hampshire, New Jersey, and D.C.
Step 2: Research Solar in Your State
Once you decide that your building is eligible for solar panels, it is time to do some personalized research on cost. Because prices can vary depending on the type of system and your electricity needs, it is difficult to give an average price for solar panels. However, the solar investment tax credit (ITC) and other initiatives within states reduce the price of these panels.
"You need to know what incentives, what carve-outs, and rebates exist in your state,” suggests Nedd. “The first step is knowing what is out there to help you with cost savings. From there, reach out to a friendly lender who can guide you through the process and who understands green financing.” No two states are the same when it comes to solar financing. Every state has different solar companies and prices that are accessible to them; therefore, it is important to start your solar finance journey with individualized research.
Step 3: Financing Solar Panels
No matter what state or region you are in, there will be more than one financing option. To begin, you can pay for the ownership of the solar panels. The cheapest route is to pay the full price upfront. Owning your solar can save you money over your lifetime, increase the value of your building, and makes you eligible for the Solar Investment Tax Credit (ITC). This tax credit is worth roughly 30% of the total cost of the solar panel system. However, paying for your solar panels upfront is not the only option:
You can also pay for solar panels through a loan. Each bank and credit union provides these loans in different ways, so it is important to talk to your financial adviser. Many banks and credit unions can help you finance panels.
Clean Energy Credit Union, a Green Business Network member, offers up to 100% financing with no money down, and you can essentially swap your monthly electric bill for a monthly loan payment on the solar electric system. Members of Green America and their immediate family members are eligible to join.
For those who are not yet able to own panels, there are third-party ownership options. A power purchase agreement (PPA) allows a third party to own and operate the solar panels on your home or business. The solar installation company is often the owner. PPAs do not make you eligible for the ITC but do allow individuals and businesses to purchase solar with no money down. Once you enter the PPA, you pay monthly for the output of the solar power system. This option is a good idea for those who do not want to pay any upfront costs, prefer predictable prices for their solar energy, and worry about being in charge of their solar panel operation and management.
Are You Ready to Go Solar?
The only overwhelming part of the solar process should be the number of options. Every day, it becomes a bit easier to afford solar as clean energy becomes more mainstream in the United States. While there still needs to be more policy work on solar access and equity, there are many opportunities today to help you transition toward solar. Researching how to step away from fossil fuels will bring you closer to saving money in bills and improving the state of the planet.
For more resources, check out Vote Solar—a team of solar advocates using a combination of deep policy expertise, coalition building, and public engagement to power just and equitable clean energy progress in states nationwide.
Along with helping you live green, for over 40 years, Green America has been working for safe food, a healthy climate, fair labor, responsible finance, and social justice.