Table of Contents

  1. What Are Solar Panels?
  2. What Is Solar Financing?
  3. 5 Advantages of Going Solar
  4. Factors to Consider Before Financing Solar Panels
  5. The Bottom Line

What Are Solar Panels?

A solar panel, also called a photovoltaic panel or module, is a device that converts the earth’s most abundant renewable resource—sunlight—into usable electric energy. Electricity generated by solar panels is used to power your home, banked for later use, or sold to a local utility grid. As you might expect, solar panels are most efficient—and can save you the most money—when they’re installed in sun-drenched areas, but they can still lower your energy bills in cloudy climates.

What is Solar Financing?

Solar financing provides homeowners with the funds they need to buy or lease solar panels and have them installed at their home. Solar financing works similarly to loans made for cars and other home improvements. That means different lenders and loan options can have a range of impacts on the total cost of your solar installation and payoff period.

Solar loans and leases can be a worthwhile option for homeowners who want or need to bypass the large upfront costs of expensive solar energy systems.

5 Advantages of Going Solar

1. Solar Energy Has Environmental Benefits

What are the benefits of solar energy? Among the most talked about are environmental. Most of us know going solar can reduce your dependence on non-renewable fossil fuels. But are you aware it also has the potential to significantly offset some of the planet’s most harmful greenhouse and other gases? For instance, installing a 10-kW solar energy system can counterbalance more than 500,000 pounds of carbon dioxide in the atmosphere.

2. Solar Panels Can Lower Your Average Monthly Electric Bill…for Good.

How do solar panels work with your electric bill to save you money? By offsetting the amount of electricity you need from your utility company’s grid.

The amount of electricity your home system produces depends on a variety of factors, including its size, the type of solar panels used, the orientation and tilt of your roof, and the amount of sunlight or shade it sees. The more electricity your system produces, the more money you’ll save—it’s how solar keeps your bill low.

Installing solar panels on your rooftop can also keep utility costs down when energy rates increase. Homeowners who add solar batteries to their home systems can save even more money long-term by banking energy for use at night or on cloudy days. And, if your municipal grid offers net metering, you can even sell excess power by the kilowatt-hour back to your utility company. Not only will you benefit from higher energy rates, but you can help decrease your community’s reliance on non-renewable resources as well.

3. Solar Panels Can Free You from the Grid

Many homeowners who go solar choose to stay connected to their community power grid, and there are important reasons for doing so (like drawing from the grid for supplemental energy or taking advantage of net metering).

Even so, installing solar panels can help you maintain energy independence from local and state power grids—especially if you amplify your solar energy system by adding a solar battery. Banking excess power can turn your system into an emergency backup and help you keep the lights on during a power outage.  

4. Low Maintenance Costs Help Solar Panels Save You More Money in the Long Run

Upfront costs for solar panels are significant, but they are also mitigated by how much money you save through long-term maintenance costs and reduced energy bills. As long as they remain unaffected by environmental factors, most home solar panel systems need little maintenance after they’re installed, helping your savings add up. High efficiency also means that you’ll continue to see increased savings—before and after you break even on your initial investment.

5. Solar Panels Can Increase Home Values

Global surges in green technologies have led many people to ask whether buying solar panels is actually worth it. An unexpected advantage of adding a solar installation to your home is that it will likely increase your home’s market value. A recent Berkeley National Laboratory study found that residential solar energy systems are seen as upgrades—like refreshed design and renovated interiors—and that buyers were willing to pay a premium for them.

Factors to Consider Before Financing Solar Panels

Save Money on Your Solar Investment with Federal Tax Credits

Current tax incentives, credits, and rebates can maximize your solar panel investment and help you save even more money. The federal solar tax credit affords homeowners a tax reduction of 30% of installation costs through 2032, and other state and local incentives may be available in your area. Whether you pay cash or get a solar loan, owning your panels outright means you can take advantage of incentives right away.

Interest Costs and Repayment Terms of Solar Loans

Homeowners who opt to finance their solar panel installation with a solar loan can have panels installed and begin using them with little or no money down—and they can take advantage of the federal incentives, too.

Interest rates will add to the total cost of your solar energy system and extend your payback period, but trustworthy, credible lending partners like Lumifi have fixed, low-interest rates to keep your payments consistent. Our loan options balance low interest rates with other, less tangible lending features, such as the security that comes with Lumifi’s bank-backed, federally insured offerings.

Solar Lease Transfer and Buyout Options

Solar leases can be a great option when cash purchase or solar loans aren’t. They allow a homeowner to pay a fixed rate to use solar panels each month—while saving money on their energy bills. Solar leases are typically long-term agreements—10 to 25 years on average—so before entering one it’s important to consider your future plans.

Let’s face it: life happens. Look for solar leases that offer flexibility in the form of transfer and buyout options—and let Lumifi help future-proof your life.

The Bottom Line

The verdict? While there are lots of factors to consider, the advantages of solar power far outweigh the disadvantages. In other words, going solar is worth it.