As part of our commitment to making solar easy and affordable for everyone, AMECO offers a variety of solar financing options starting at $0 down. Often a loan or a lease can be structured so that you start saving money immediately by spreading the cost of the solar panel installation over time.
Below we explain the different types of solar loans and leases that we currently offer:
- Home Equity Loan
- Unsecured Loan
- Solar Lease
- Power Purchase Agreement (PPA)
The following explanations of our financing options will help you decide which option is the best for your solar panel project and budget. If you have any additional questions, contact us today and one of our solar experts will explain how solar financing can work for you.
Solar Loan Options
Home Equity Loan
A home equity loan uses the equity of your home as collateral for the secured loan. Sometimes referred to as a second mortgage or HELOC (Home Equity Line of Credit), you need at least 20% to 25% equity in your home to qualify. Usually this kind of loan must be paid off when you sell your home or refinance in the future.
Since you own the solar system with this option, you receive any rebates, incentives and RECs (renewable energy certificates) associated with the solar panels bringing down the initial cost considerably. You can also take advantage of tax-deductible mortgage interest and deduct it from your personal income taxes.
If the fixed monthly loan payments will be cheaper than your current electricity bill, you can realize immediate savings and your cash flow will improve right from the beginning. Secured loans offered by AMECO Solar have 10, 12, 20 and 25 year terms. There is no penalty for pre-payment so you may pay it off at any time.
An unsecured loan uses your credit score instead of your property as “collateral” for the loan qualification. Often, you need good to excellent credit to take advantage of the low interest rates available for this solar financing option.
Because you are considered the owner, you will be able to benefit from rebates, incentives and RECs, which could reduce the cost of your solar system by nearly half. Additionally, the monthly payments may be lower than your previous monthly electricity bill, which can result in immediate significant savings.
AMECO Solar offers unsecured loans with 5, 10, 15, or 20 year terms. Similar to a home equity loan, you may pay off an unsecured loan at any time with no penalty.
Solar Leasing Options
A solar lease allows you to rent solar panels for an allotted period of time. Similar to leasing a car, you do not own the solar panels and the lease provider is considered the owner. As a result, they take care of any maintenance of the system at no cost to you. You are also offered a free monitoring system that can be accessed online so you can see how the solar system is performing at any given time.
If your monthly electric consumption is large enough, you save immediately with a solar lease because the monthly payment will be less than the amount you currently pay for your electricity bill.
AMECO Solar offers a variety of lease options, some with locked-in monthly payments and others with payments that escalate annually from 0% to 4.5% over time. Most of the solar leases that we offer have 20 year terms.
Once the leasing period is over, you have the option to renew the lease, remove the solar system or purchase the solar system. Many leases allow the owner to make a one-time purchase before the lease period ends, usually in the seventh year of use. If you decide to sell your home before the lease is completed, you will need to transfer the lease to the new home owner or pay off the lease before selling.
Power Purchase Agreement (PPA)
A power purchase agreement is similar to a solar lease in that ownership is held by the PPA provider. However, instead of renting the solar system you are paying for the energy that the solar system produces. Since the PPA provider is considered the owner, they will monitor the system and take care of any maintenance needed.
The cost savings benefit is that you are purchasing electricity at a discounted rate compared to what the utility company would charge you. It’s similar to buying 20 years-worth of gas for your car at a cheap price instead of filling up your tank every time you run out and dealing with price increases.
Typically, a PPA term lasts 20 years. Similar as a solar lease, you have the option to renew the PPA, buy the solar system or have the company remove it from your roof at the end of the term.