FAQs

How are you planning on paying for your system? Understanding finance.

Leca

April 1, 2021

5 Mins read

How you pay for your solar installation can make a difference to what it ends up costing
you over time. There’s no one right way to finance - it depends on a range of factors, such as your
energy demands, how much flexibility you want and more.
Here are some of the solar finance options and the pros and cons of each :

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.

Pay cash upfront

Green Loan

How you pay for your solar installation (LINK 4) 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.

Pay cash upfront

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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