Solar Panel Financing Options for Homeowners
The country’s solar-friendly policies help make solar panels more affordable in Illinois so everyone can reap their benefits. This is possible thanks to various solar panel financing programs and incentives.
If you’ve wanted to switch to this energy source for a while but need to know where to start, now is the time! Let’s explore all the possible benefits of using panels.
Types of Solar Panels and Their Cost
Several solar panel options for homes and businesses differ in terms of production technology, efficiency, and cost. The most common systems are:
1. Monocrystalline solar panels
Made of silicon crystal, they are characterized by high efficiency (about 15 – 22%), long service life (20 – 25 years), and productivity. The cost per watt is $0.30 – 0.60 (excluding installation).
| Advantages | Disadvantages |
| The highest efficiency of all types | High cost of production |
| Take up less space to achieve the required capacity |
2. Polycrystalline solar panels
They are made by melting silicon crystals and are more environmentally friendly than their monocrystalline counterparts. Less silicon is consumed during manufacturing, so they are cheaper.
However, these batteries cost more per watt of output power because they are less efficient (approximately 13 – 16%). The service life is 20 – 25 years, and the approximate cost per watt (excluding installation) is $0.20 – 0.40.
| Advantages | Disadvantages |
| Lower production costs | Higher price per watt |
| Good performance in bright sunlight | Lower efficiency |
| Less attractive aesthetic appearance |
3. Thin-film solar panels
They are created by placing several layers of photovoltaic material on each other. They have a lower efficiency rating (7% to 13%), but their main advantage is flexibility.
This is an excellent solution for homes with a small roof area because they can be placed around objects. Suitable for mobile homes.
They are usually not expensive, but the price can vary depending on local suppliers. The cost per watt of energy is $0.50 – 1.00 (excluding installation).
| Advantages | Disadvantages |
| Low cost of production | Low efficiency |
| Flexibility and lightness | Requires a large footprint to achieve the required output |
| Good performance in low light and high temperatures |
Which panels you choose will depend on your budget, available installation space, desired efficiency, and operating conditions.
Source: Treehugger
Is It Possible to Save Money on Solar Panels
Electricity rates in Chicago have increased over the past three years. Installing solar panels can help you save money in the following ways:
- Lower bills: Generating power to your home reduces your dependence on traditional electricity providers. If your panels produce excess energy, you can sell it by installing a home battery.
- Long-term savings: Solar panels provide a fixed cost of electricity, so you won’t experience tariff increases. Their long service life allows you to receive free electricity for years after the initial investment is repaid.
- Government incentives and tax breaks: In the US, additional credits for installing solar panels partially reduce the initial cost of the system.
- Increase in property value: Installing solar panels will increase the value of your home, as properties with low energy costs are more attractive to buyers.
- Environmental benefits: By using a solar panel battery, you reduce your dependence on fossil fuels and reduce greenhouse gas emissions, helping to preserve the environment.
The initial investment in an installation may seem high. However, the benefits of your battery make it worthwhile. Therefore, this idea is a good choice, given the possibility of financing a solar system practiced in Chicago.
How Are Solar Panels Financed
Thanks to residential solar panel financing, you can save on electricity and are eligible for government and financial incentives. The main thing is to read the terms and conditions and solar panel financing options before installing the equipment.
Solar Leases
This is a lease of panels from a company, which means you simply pay a monthly fee for the electricity the panels consume. This is the best solar panel financing option if you plan to save money on your electricity bill and support renewable energy.
| Advantages | Disadvantages |
| There are no initial costs | You are not eligible for tax credits because you are not an owner |
| There are no maintenance and repair costs | Long-term contracts may limit selling the home or moving |
| Stable monthly payments |
Solar Panel Loans
This is one of the most popular solar energy financing options, as you can take out a loan and spread its cost over a certain period. Can you finance solar panels this way? Yes, if you have a good credit history and are eligible for a low-interest loan.
| Advantages | Disadvantages |
| You can additionally take advantage of tax benefits | Payment of interest |
| Ability to build payment plans for solar panels over a long period | Must have a good credit history |
| Various options for interest and repayment terms |
Power Purchase Agreements, PPA
This is a good option if you still need the initial amount for a down payment. How does financing solar panels work? You agree with the company to purchase electricity at a fixed rate for a certain period.
| Advantages | Disadvantages |
| No initial costs | You don’t own the storage system |
| Fixed tariff | Long-term contracts |
| You are not responsible for maintenance |
Home Equity Loans and Lines of Credit
Thus, you can use your home’s equity for solar panel financing. Loans are:
- Pledge of real estate, where a fixed amount with specifics is indicated solar panel financing interest rates and their maturity date.
- Home equity lines of credit (HELOCs) have a revolving line of credit that has a variable interest rate.
| Advantages | Disadvantages |
| Lower interest rates | Using housing as collateral |
| There may be non-taxable interest | Payment of interest |
Therefore, what is the best way to finance solar panels? The choice of solar panel payment options will depend on your financial situation, credit score, and long-term goals.
Source: EcoWatch
State and Municipal Incentives
Incentives and reimbursements play a crucial role in taking the first step toward installing solar panels. The main incentives in Illinois and Chicago, in particular, are as follows:
Federal Incentives
As of 2024 (until 2035), the Federal Investment Tax Credit (ITC) allows a 30% deduction if solar systems meet the requirements. To qualify, a solar battery must be installed and put into operation by the end of the tax year.
State Incentives (Illinois)
➥ Illinois Solar Renewable Energy Credits (SRECs): The Illinois Shines (Adjustable Block Program) program promotes the sale of SRECs for residential, commercial, and community solar projects. This incentive typically covers 30-35% of the system cost and introduces energy storage.
➥ Illinois Solar for All: It provides incentives for low-income households and non-profit organizations to install solar energy systems and make them more affordable.
➥ State tax credits and exemptions: The state offers this credit for property tax relief. However, solar energy systems can qualify for a particular assessment that ensures they are not assessed at a higher value than a conventional energy system. This prevents property taxes from being raised by the installation of solar panels.
Local Incentives (Chicago)
- ComEd Residential Renewable Distributed Generation Rebate: The program offers rebates directly for residential solar batteries. Panel owners can receive a refund for each kilowatt (kW) installed solar capacity.
- Chicago’s Solar Express program: The program simplifies and makes it more affordable to obtain permits for solar batteries. Benefits include reduced permit fees and a faster review process for solar projects.
Utility Incentives
A net metering process that allows solar panel owners to sell excess electricity back to the grid. And thus earn credits on their utility bills.
Special Programs
Such a program in Chicago is PACE (Property Assessed Clean Energy), which allows property owners to invest in solar installations and recover these costs by assessing their property tax bill. There are no upfront costs or long repayment periods, and the loan is tied to the property, not the individual.
Is Financing Solar Panels Worth It?
As you can see, Chicago offers several incentives to make residential and commercial solar panel financing options available to everyone. By taking advantage of these, residents and businesses in the city can significantly reduce their energy bills and minimize their carbon footprint, contributing to a sustainable future.
Get started on your solar journey today — request your free solar quote and discover the best solar financing options for your home.
