Investing in solar energy is a smart decision that not only reduces electricity costs but also provides long-term financial and environmental benefits. However, choosing the right solar purchasing option is just as important as deciding to go solar. Homeowners have three primary ways to install a solar system:
Cash Purchase – Pay for the system upfront and own it outright.
Solar Loan – Finance the system over time while maintaining ownership.
Solar Lease or Power Purchase Agreement (PPA) – Pay little to no upfront cost but do not own the system.
Each option has its own advantages, depending on financial goals, homeownership plans, and energy needs. At Bullet Solar, we help homeowners navigate these choices to find the best fit for their situation.
Cash Purchase: Maximum Savings & Full Ownership
For homeowners looking to make a long-term investment, purchasing solar panels with cash is the most financially beneficial option.
Advantages of a Cash Purchase
Lower Lifetime Costs – Avoids interest payments associated with loans or leases, making solar more cost-effective over time.
Immediate Return on Investment (ROI) – With no monthly loan payments, homeowners immediately benefit from lower electricity bills and net metering credits.
Increased Home Value – A fully owned solar system can increase property value without the complications of transferring a lease or loan.
No Credit Requirements – Bypasses the need for financing approvals, making the process simpler and faster.
Full Access to Incentives – Homeowners can claim federal and state tax credits, rebates, and Solar Renewable Energy Credits (SRECs) to offset costs.
While a cash purchase requires a larger upfront investment, it provides the fastest return on savings and the highest long-term financial benefits.
Solar Loans: Financing Ownership with Flexibility
For homeowners who prefer to spread out the cost of their solar investment, solar loans provide a path to owning the system while making manageable monthly payments.
Key Benefits of a Solar Loan
Ownership and Incentives – Homeowners own the system and qualify for tax credits, rebates, and increased home value.
Flexible Payment Plans – Loans offer fixed monthly payments, making solar more accessible without requiring a large upfront payment.
Interest Rates & Loan Terms – Competitive rates and loan terms ranging from 5 to 25 years help homeowners choose a financing plan that fits their budget.
Balloon Payment Considerations – Some loans include a larger one-time payment, often intended to be covered by federal tax credits.
When choosing a solar loan, it’s essential to compare interest rates, loan terms, and potential balloon payments to ensure the best financial outcome.
Solar Lease vs. Power Purchase Agreement (PPA): No Upfront Costs, But No Ownership
For homeowners who want to go solar without upfront investment, leasing a system or signing a Power Purchase Agreement (PPA) allows access to solar energy without owning the system.
Solar Lease: How It Works
A solar lease allows homeowners to use a solar energy system for a fixed monthly fee rather than purchasing the system outright.
Advantages of Solar Leasing:
No Upfront Costs – Ideal for homeowners who don’t want to pay out-of-pocket for a solar system.
Lower Energy Bills – Reduces electricity costs by replacing grid power with solar energy.
No Maintenance or Repairs – The solar company handles all system upkeep.
Considerations:
No Ownership – The homeowner does not own the system and cannot claim tax credits or rebates.
Fixed Monthly Payments – Homeowners pay a lease fee regardless of energy usage.
Savings Dependent on Solar Production – Savings may fluctuate based on sunlight availability and personal energy consumption.
Power Purchase Agreement (PPA): Pay for Energy, Not the System
A PPA is similar to a lease, but instead of paying a fixed fee, homeowners pay only for the electricity the system generates.
Benefits of a PPA:
Zero Initial Investment – No upfront cost for installation.
Lower Energy Costs – Solar electricity is typically cheaper than utility rates.
Hassle-Free Maintenance – The provider handles repairs, monitoring, and performance guarantees.
Considerations:
No Ownership – The homeowner does not own the system and cannot claim tax incentives.
Long-Term Agreement – PPAs often last 10 to 25 years, with fixed or escalating rates.
End-of-Term Options – Homeowners may have the choice to extend, purchase, or remove the system.
Which Solar Purchasing Option is Best for You?
Feature | Cash Purchase | Solar Loan | Lease/PPA |
Upfront Cost | High | Low/None | None |
Monthly Payments | None | Fixed Loan Payments | Fixed Lease or PPA Payments |
System Ownership | Yes | Yes (After Loan) | No |
Tax Credits & Incentives | Yes | Yes | No |
Maintenance Responsibility | Homeowner | Homeowner | Solar Provider |
Long-Term Savings | Highest | High | Lower |
Home Value Increase | Yes | Yes | No |
If you want maximum savings and full ownership, cash purchases or solar loans offer the best return on investment. If you prefer no upfront cost and hassle-free maintenance, a lease or PPA might be the right choice, but keep in mind that you won’t own the system.
Get Started with Bullet Solar Today
No matter which solar financing option you choose, Bullet Solar is here to help make the transition to clean, renewable energy as simple and affordable as possible.
Custom solar solutions tailored to your home
Expert guidance on financing options
Hassle-free installation & support
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