Pay cash upfront
Pros:
- You immediately own all the solar assets and get to start saving on power costs.
- There are no repayments or interest costs to worry about.
Cons:
- You will no longer have that money available for other purposes (e.g. a new car or holiday).
- With the considerable savings you can make with solar, it could actually work out better to finance your system through a low-interest loan.
Green Loan
How you pay for your solar installation can make a difference to what it ends up costing you over time.
Pros:
- They generally come with lower interest rates than, say, personal loans.
Cons:
- Only available for people with a good credit score.
- Some loans come with additional fees you should watch out for.
Mortgage Extension
If you have an existing mortgage, you may have the option of adding a solar loan to it.
Pros:
- May be an easier option than setting up a new loan.
- Lower interest than most other loans.
- You get to consolidate your debts.
Cons:
- If you pay your mortgage out slowly (e.g. over 25-30 years) your solar installation could end up costing you a lot more than with a shorter-term loan.
Solar Lease / Rent To Buy
This is a type of rental agreement where the leasing company owns the panels, and you make regular fixed payments to pay them off over the term.
Pros:
- No upfront costs.
- Could be a good option for larger-scale commercial installations.
Cons:
- You won’t own the system until it’s all been paid off.
- You will need to pay any balance owing if you sell the property.
- Interest rates can be high.
Solar Power Purchase Agreement (Ppa)
With this arrangement, the Solar PV Retailer owns the system, and you buy the power they generate.
Pros:
- No upfront costs.
- The company is responsible for maintenance.
- Could suit businesses with high or constant energy demands.
Cons:
- You don’t get to own the hardware.
- Depending on the agreement, you could end up paying for energy you don’t actually use.
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