Solar Financing

Renewable and sustainable energy with solar power. How to get solar panel financing.

Skill Level
20 Min

Incentives and Rebates

Chapter 8

Table of Contents

What is Solar Financing?

Now that we’ve covered the basics of solar panels let’s discuss the costs. It’s one of the most important determining factors. For most people, affordability is crucial when deciding whether to buy solar panels or not.

Understandably enough, you wouldn’t want to invest a lot of money on something  1 deposit casino  that you’re not sure you will reap the rewards. So, how do you know whether solar power is worth it?

Solar panel systems are a smart investment for your house, especially in the long run. Solar energy significantly reduces household expenses and saves money. No more worrying about paying electricity bills! Moreover, solar panels can even profit you. How?

Well, for starters, adding solar panels to your property increases the value of your home. With a net-metering system, you can also receive credits per kWh of electricity your solar panels produce. These credits will go directly towards your energy bill, decreasing your costs.

A shortage of electric power is common in third-world countries. No matter where your location is, it’s wise to start thinking about conserving electricity. Not only is it healthier for the environment, but it is also more efficient for your household energy.

How Much Does a Solar Panel Cost?​

solar panel cost

On average, the installation of a solar system can cost up to $24,000. Most people pay between $16,532 and $30,820. With the advancement in technology, solar panels are becoming cheaper and more convenient to set up.

Meanwhile, for a single solar panel, you can expect to pay about $2.50 to $3.50 per watt – with most of the systems in the 3 kW to 10 kW range.

Is It Worth the Cost?​

Despite the investment, you may be wondering whether solar panels are worth the initial cost. With the rise of energy prices every day, this may be the perfect time to shift to solar energy. Innovative technological enhancements in the solar field have made solar panels easier and cost-effective to set up.

As solar technology makes significant strides, the developments make it even more affordable. In turn, this means that the overall installation costs gradually lower after some time. Property holders have a few choices accessible to them – which weren’t available in the past. The options can fit an assortment of financial plans. We will discuss this in detail as we move forward.

Overall, it takes about $0.70 to $1.50 per watt to purchase a solar panel. After including labor and other factors, solar panel installation can round up to a total of $2.50 to $3.50 per watt.

Types of Solar Panels?

There are three main types of solar panels for the residential market. Each has its advantages and disadvantages, from the cost to durability. It’s essential to understand their disparities before purchasing.

There are a few different types of solar panels that you can install. Depending on the material of these panels, prices can vary.

Monocrystalline​ Solar Panel Cost

On average, monocrystalline solar panels cost $1 to $1.50 per watt. Monocrystalline technology is typically the most energy-efficient for your system and takes up the least amount of space.

The panels’ solar cells are made up of high-purity silicon, which is highly efficient in converting sunlight into electricity. Wondering how these are made?

The process of manufacturing involves cutting a sheet of silicon to form solar cells. These are then arranged to create panels.

Monocrystalline solar panels usually have the longest life expectancy. They have a 20 to 25-year warranty.

Polycrystalline​ Solar Panel Cost

If you’re looking for a more budget-friendly option for your solar panels, this might be the best.

How Is the Cost Reduced?​

Currently, Polycrystalline solar panels cost between $0.90 and $1 per watt. Even though they have a lower efficiency than monocrystalline, they are more suitable for smaller budgets and don’t take up much space.

In the manufacturing process, multiple crystals of silicon are melted and poured into molds to form the solar cells. As a result, the silicon becomes less pure and less efficient. However, it does reduce waste and production costs.

Thin Film​ Solar Panel Cost

 Lastly, thin-film solar panels can cost between $1 and $1.50 per watt on average. These are adaptable and flexible, made by layering photovoltaic material on metal or glass. The efficiency of thin-film solar panels relies on the photovoltaic material used. They cost less but require significantly more space for residential power homes.

Thin-film solar panels tend to have a shorter life expectancy, enduring a normal of 14 to 17 years. Therefore, they come with relatively lower warranties.

Should You Choose Thin-Film Solar Panels?​

Thin-film solar technology has a higher tolerance for heat than other solar panel materials.

Solar Panel Cost in Different Regions

Although the initial solar panel installation cost per watt ranges from $2.50 to $3.50, it differs regionally. The most significant difference is between the Southern and New England districts. This doesn’t necessarily imply that solar panels are less cost-effective in New England than in other areas. Different regions have varying returns on investment, which depends on other elements. What does that mean?

Factors that Influence Solar cost​

1. State and local incentives

Some state authorities, local governments, utility companies, and other organizations offer solar cash rebates to homeowners. The solar incentives are usually available for a limited time and end once a certain number of solar systems are installed in the area. 

Cash rebates can help you reduce your solar system cost even more. In some cases, you can lower costs by as much as 10% to 20%.

2. Average Electricity Bills

How much were you paying for electricity before going solar? Depending on your electricity bills, you can see how much you’ll save by investing in solar energy.

3. Climatic Conditions

Specific types of solar PV panels are known to respond to climate factors differently. In the following pages of this ebook, you can find the average rates of installing a solar panel system, according to region and wattage.

Estimated Solar Panel System Costs Per Watt

















Estimated Solar Panel Installation Costs by Region


Midwest, Southwest & West














New England









































How Much Does One Solar Panel Cost?

Solar panels retail for around $1 to $3 per watt and range between 150 and 350 watts for every board. This makes the price of one solar panel around $200 to $350.

If you’re installing one panel, high-quality, high-output options are ideal. Let’s take a look at the varying efficiencies of solar panel types:

  • Monocrystalline PV modules: 17%-24% efficient
  • Polycrystalline boards modules: 15%-20% efficient
  • Slender/film PV modules: 7%-14% efficient

Numerous retailers sell solar panels individually and as part of a more extensive system. It’s essential to factor in hardware and installation costs. Installation can make up as much as 30% of your total expense!

Types of Solar Financing

There are four main ways of financing solar panels for your home:

  1. Solar Leases
  2. Solar Loans
  3. Power Purchase Agreements or Solar PPAs
  4. Solar Cash Purchases

The solar financing option that you choose depends on what you can afford and other personal preferences. Fortunately, one of the advantages of solar panels is that there’s likely to be a financial benefit no matter how you choose to finance them.

In the following part, we will discuss all four payment methods in detail to help you understand them better. Let’s begin with solar leases.

Leasing Solar Panels

A solar lease is a payment mode for residential solar panels. The homeowner rents the panels from a solar company (instead of buying them).

How Do Solar Leases Work?

If you opt to go for a solar lease, you pay to rent the solar power system. The payment is usually 20% less than you were paying for electricity.

Meanwhile, Power Purchase Agreements (PPAs) also work like solar leases. However, instead of renting the system, you pay a set price for the electricity the system produces. But we’ll talk more about that later.

A solar lease contract lasts for about 5 to 20 years. There’s often no down payment. The solar company takes responsibility for solar panel maintenance.

The homeowner does pay a fee to the utility company to stay connected to the grid. But some states also offer net-metering in case the panels produce more energy than is needed.

You can renew the lease at the end of the contract, buy the panels (often for a discounted price), or have them removed.

Pros of Leasing Solar Panels

  1. With solar leases, you can lock your power prices.
  2. Solar leases lead to significant savings over your utility bill.
  3. Most solar leases are zero-down financing. This means you don’t have to worry about spending too much money at once.
  4. Leases include a power production guarantee. In case the panels don’t produce enough power, your lease payment goes down.
  5. The maintenance of the system is the company’s responsibility during the lease. If an inverter stops working, the company fixes it.

Solar Loans

solar financing

Another excellent solar financing option is loans. Even though solar loans have annual interest rates and monthly payment requirements (like other loans), they can still help you a lot. 

For example, you might see a $20,000 solar loan with a 4.5% interest rate and a fifteen-year payback period. These loans work quite similarly to a home improvement loan or an auto loan.

If you want to install solar panels but can’t afford them yet, numerous companies are more than willing to offer loans. Solar installers, banks, credit unions, PACE program participants, and independent solar financing companies all provide loans.

These providers also create new loan options all the time. Therefore, it has become easier than ever to find a loan that works for your solar financing needs.

How Do Solar Loans Work?

Full Ownership of Your Solar Panels

For starters, if you decide to finance solar using a loan, you’ll get full ownership of your solar system (unlike other options like leases). Even though you’ll have to pay off the cost in monthly installments, you’ll have full control over the system. For a lot of people, this is a priority as they don’t like renting out panels.

You Pay the Loan Back Over Time

Just like any other loan, you can pay off your solar loan over time. The period can be month to one year or a couple of years. The loan is used to finance the installation cost of your solar panels. So, you can rest assured that this money won’t go to waste, most loans are 0 down.

This means that you don’t have to make an initial down payment when your loan gets approved. As a result, you can start receiving the benefits of solar power immediately.

Incentives and Rebates

As a perk to solar loans, you are entitled to receive several incentives and rebates. Sometimes, the government offers solar incentives, especially if solar energy will benefit more than one family. After all, you may pay less than you’re expecting. Check all the available options in your area to reduce the installation cost.

Different Solar Financing Options

There are several solar loan providers to choose from. Whether you go for a well-endowed bank, solar company, or another third-party, you’ll have options! Thus, you can carefully consider all variables and consequences before deciding.

Advantages of Solar Loans

  1. Solar loans usually have the highest net savings from all financing methods, apart from cash purchases.
  2. Solar loans allow you to own your solar panels, unlike leases or PPAs.
  3. Because you’ll own the solar panels, you receive the federal tax credit in the first year. This means that the government will pay you the first year (if you take advantage of the tax credit).
  4. You’ll be entitled to receive state and local incentives – because you’re the owner of the solar panels.
  5. Solar loans offer immediate savings over your electric bill.
  6. Most providers will offer a zero-down loan option, which means you can invest in solar panels at any time.

Solar PPA

Power purchase agreement or Solar PPA offers an alternative approach to going solar. How is this done?

In most cases, solar providers install solar panels on your roof, and you can purchase the electricity they produce at a discounted rate.

The solar provider owns and maintains the panels on your roof. They provide power from the panels, hence, the name “power purchase agreement”.

Unlike with solar power loans, you pay just for the power that your solar panels produce in a PPA. If the boards have significantly less power, you also pay less. Meanwhile, the opposite is also true.

Like solar leases, solar PPAs are set below the current electricity rate. They have a lift, a percentage increment every year that takes care of inflation and maintenance costs.

How Does Solar PPA Work?

You Only Pay for the Power

Even though you won’t own the solar panels, a solar PPA will significantly reduce the cost. You’ll only pay for the power that you use.

You Don't Have to Worry About Maintenance

Your solar provider will maintain the panels for the duration of the agreement. Therefore, you won’t have to worry about cleaning or other costs.

Saves You Money

Solar PPA is a relatively cheaper method to go solar. You only pay for the power you use and save money that you can use on other expenses.

Zero Down Payment

Most power purchase agreements are zero down. You practically don’t have to pay anything for your solar panels (initially). With zero down financing, you can get solar panels as soon as you want and pay the cost when you can afford it, according to the agreement’s terms.

Solar PPA Advantages

  1. You can lock your energy costs for the future.
  2. As a result of installing solar panels, your electricity bill will reduce. You don’t even have to spend too much money on the investment.
  3.  Almost all PPAs are zero down.
  4. You don’t have to worry about the responsibility. The company providing the solar PPA does everything for you.
  5. Most solar PPAs have a “bracket” you are guaranteed power within to prevent your power bill from going too high on sunny days.

Solar Cash Financing

Cash is another solar financing option you can use to buy and install solar panels.

A solar panel purchase means that you buy your solar panels with a full installment when you have them installed. This strategy is common among people who wanted to go solar. But with time, it has become less popular.

However, that doesn’t mean there’s anything wrong with cash purchases. Despite what might be expected, it allows mortgage holders to catch a larger number of investment funds than other solar financing alternatives. 

If you can afford it, then buying solar panels in cash is a good deal. You gain energy independence and protection from the market forces while your panels are creating power. Mortgage holders who decide to go solar with a cash purchase can exploit all government and local tax incentives.

How Do Solar Cash Purchases Work?

Requires Payment Up-Front

Despite the numerous advantages solar cash financing can bring, it requires a significant initial investment. But once you invest this money, you can fully own your solar panels and never worry about the cost again.

Maintenance of the Panels

Buying solar panels via cash will also mean that you’re fully responsible. With full ownership also comes the duties of maintenance and solar panel cleaning. You must prioritize this to keep your solar panels in optimal condition.

Energy Credits for Excess Power

Similar to solar loans, cash purchases come with various incentives. Owning a solar plant is an energy-efficient choice that your government profoundly values, no matter how small. Once you install solar panels, you’ll be eligible for some pretty cool benefits and incentives, depending on how much power your plant produces and who it benefits.

Also, you can receive credits from your utility for any excess power you produce. You not only make your power system completely efficient but also helping others in the process!

Protection from Fluctuating Energy Prices

Because you’ll have your independent power system, it will protect you from fluctuating energy prices. You won’t have to worry about electricity bills anymore. All of that will be eliminated and replaced by a solar plant you have full control over.

Advantages of Solar Cash Financing

  1. By purchasing your panels with cash up-front, you can maximize your savings (more than any other payment method).
  2. As mentioned earlier, you can easily take advantage of state tax credits and rebates.
  3. After your initial purchase, you won’t ever have to worry about paying for power produced by your panels again.
  4. As you go solar, your home value immediately increases by the cost of your panels.

Cost of Solar Panel Maintenace

Yes, you read that right. Now that we’ve discussed all sorts of buying and installation costs, there’s still one area left. That’s maintenance costs!

The installation of solar panels is a long-term investment that can profit you for decades while requiring only minimal maintenance. But that does not mean you shouldn’t take care of them.

Ideally, you can have your solar panels inspected annually. You should also prioritize cleaning and preventing potential problems such as storm damage.

But as long as you professionally maintain your solar panels and clean them regularly, your investment is safe.

Usually, the average cost to maintain solar panels can range from $300 to $700. The average homeowner spends around $400 for cleaning and inspecting a basic 2 kW solar PV system.

Overall Solar Panel Maintenance Costs

Usually, the average cost to maintain solar panels can range from $300 to $700. The average homeowner spends around $400 for cleaning and inspecting a basic 2 kW solar PV system.

National Average Cost


Average Range

$300 – $700

Minimum Cost


Maximum Cost


Solar Panel  Cleaning Costs

On average, it takes about $150 to clean solar panels. But keep in mind that this is only done once a year.

Cleaning charges can vary depending on roof orientation, the height of the house, and system size. Companies can charge anywhere from $3 to $10 per single solar panel. Some charge a flat rate, which lies within a range of $150 to $350. In most cases, annual solar panel inspections are $150, before the cost of cleaning.

No matter the solar panel system you have, it’s likely to require minimal maintenance throughout the year. But this doesn’t involve a lot of hassle.

Most come with automatic monitoring, which alerts you immediately about issues and low efficiency. It’s still essential to get an annual inspection and cleaning so that your system operates at peak performance.

Factors that Affect Solar Cleaning Costs

  1. System Location: normally, you’ll pay less for ground-mounted solar panels than on a two-story house, considering the safety measures and extra labor involved.
  2. Level of Build-Up: depending on how long ago you cleaned your solar panels, you might need more work and cleaning supplies.
  3. Size: an extensive array will take more time to clean, adding to labor costs. A small system attracts a low fee to cover the contractor’s costs.
  4. Proximity to Contractor: depending on your distance from your contractor’s location, you may encounter a higher minimum fee than someone who lives within a 20-mile radius.
  5. Maintenance Agreement: if you purchased your solar panels on a maintenance agreement, then you may not have to pay for cleaning at all (or significantly less).

Should You Pay For Professional Solar Cleaning Services?

At this point, you might be wondering whether it’s worth hiring professional solar panel cleaning services.

A professional can remove debris from the glass solar panels using proper tools, soap, and water to prevent damage. They will also assess any damage to the system and recommend the next steps.

You can wash the solar panels too.  However, before doing so, it’s imperative to call your solar installation company. They can advise the best way to clean your solar panels because they know how they work. This can ensure that you don’t lose your warranty.

For most systems, annual cleaning will be sufficient. However, areas that get less rain may have a more frequent need. The value of this service will be unique to your specific circumstances.

Key Takeaway

Are solar panels worth the expenseAs shown in this chapter, solar panels require considerable initial capital. It can seem a bit too much for most people with middle-sized homes. However, the return on investment (or ROI) they offer is fantastic.

In the long run, solar panels benefit you immensely. After dealing with initial costs like buying the panels and installation, you won’t have to worry much. As far as maintenance costs go, you only pay them once a year. 

Let’s remember that solar panels will drastically reduce your electricity bills. And not just that, but they also contribute to conserving the environment! With solar panels, you’re creating clean, green, and efficient energy that powers your home for as long as you want!

You can opt for any solar financing method to go solar. In the end, you’ll be saving a lot more than you’re spending. 

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