What is a solar loan? | Personal finance

If you’re not able to get a solar loan right now but still want to take advantage of solar power, you’re in luck. There are many other options available. One downside, however, is that since you don’t own the solar panel directly, you won’t be able to claim tax breaks. But you can still stand out financially and ethically.

Solar leases

Some companies rent solar equipment from you. They will install it on your home as if you bought it yourself, but the company retains ownership and maintenance of it. You will basically pay a fee to rent the equipment.

It’s a good idea to do the math to verify that even with this additional price, your overall electricity costs will in fact be cheaper than without the rented solar system.

Power purchase agreements

A power purchase agreement is similar to a solar lease in that a third party company comes in and installs a solar system on your property. However, instead of paying a rental fee for the equipment, you pay for the electricity produced by the solar panel. It’s a similar cost, just paid for in a different way, like having a mini power plant in your home.

Again, it’s a good idea to verify that the electricity costs in this deal are cheaper than your normally purchased electricity.

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