Newspaper article The Topeka Capital-Journal

After You've Decided to Invest in Solar Panels

Newspaper article The Topeka Capital-Journal

After You've Decided to Invest in Solar Panels

Article excerpt

Buying solar panels requires an investment and more decision- making than leasing, but over the long term, the benefits of owning your system are hard to beat.

Consumer Reports offers this overview:

Best Ways to Pay For Your Panels

- Cash. Buying your solar electric system outright is best.

It usually costs $15,000 to $20,000 after tax credits, and it can reduce your electricity bill by 70 to 100 percent, depending on the size and orientation of your roof and local regulations. Most systems pay for themselves in five to seven years.

- Home equity loan. If you need to finance your solar panel purchase, the most cost-effective way to do it is to use a home equity loan or a home equity line of credit.

Because your house serves as collateral, these options have low interest rates (currently about 3 to 5 percent). The interest you pay is tax-deductible.

- Solar loan. There are unsecured and secured solar loans. With an unsecured loan, your house doesn't act as collateral and the interest isn't tax deductible.

Many solar installers work with lenders that offer solar loans, but you'll probably find better rates by directly checking with banks and credit unions. Consumer Reports says to watch out for high origination fees. Fannie Mae also offers consumers financing for solar system installations through its HomeStyle Energy Mortgage Program when they buy a new house or refinance.

Why Leasing Is Not a Bright Idea

The steep up-front costs for a residential solar system can make a leasing company's sales pitch sound pretty appealing: Pay little or nothing and save hundreds of dollars per year on average. (The premise is that you save because the combination of your lease payment and your electric bill is less than what you currently pay for power. …

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