Do Zero-Down solar financing options work in Ohio, and if so, which is best for you?

Having a solar array installed at your home or your business can result in substantial financial savings. In some parts of the country, it is possible to choose a zero-money-down plan, which could lead to immediate savings.  Does this work in Ohio? Solar leases, Power Purchase Agreements (PPAs), and Solar Loans are popular financing plans with zero-down options. Let’s take a look at three of these plans to see if they might work for you.

Zero Down Solar Financing

Solar Leases

With a Solar Lease, you would contract with a leasing company, who actually owns and maintains the system, which entitles them to any rebates, tax incentives, etc., that are available with solar installations. You will pay a fixed monthly fee, based on the electricity that your system produces. Once the solar array has been installed and is functional, your payments begin. Many solar leases include a rate increase of 1 percent to 3 percent each year, based on the projected increase of your electricity rates. In some areas of the country, and with what OGW Energy Resources would consider less product, there can be month-to-month savings. For Ohio, this does not currently work for high-quality product for residential projects.  For commercial projects, lease rates tend to be lower and terms can be longer, to where this is a viable option.

Power purchase agreements (PPAs)

A PPA (Power Purchase Agreement) works much like a Solar Lease, in that you settle on a set price for your electricity, and you still get all of the benefits from your system. The basic difference in a PPA and a Solar Lease is your payment calculation. With a PPA, your monthly payment is based on a pre-determined per-kWh rate, as opposed to the fixed rate that is paid with a Solar Lease.

Again, as with a Solar Lease, your PPA provider is the owner of the system, and will reap the accompanying benefits (rebates, tax incentives, etc.).  For Ohio, this does not currently work for high-quality product for residential projects.  For commercial projects, PPAs can be a viable option.

Solar loans

The final option we will discuss is the Solar Loan. This is really just a basic loan, where you borrow money from a lender, and monthly payments are made until the loan is paid off. You are the owner of the system, and you will receive the financial benefits (tax credits, etc.) that come with the installation.  In Ohio, when it comes to solar PV, there are subsidized loans for residential and small business.  At OGW Energy Resources, we never carry the loan, because the State, in conjunction with a quality bank, can get you a better rate.  If someone is offering you a solar loan, please consider that the extra money you’re spending on a higher interest rate could go towards a high-quality OGW Energy Resources Solar PV system.

Bottom-Line on Ohio zero down solar financing

If you would rather have payments over several years versus putting money upfront, the Ohio zero down solar financing option could be the right choice for you.  Just remember that when you go with a loan, your system cost, over time, will be higher, versus paying for the system up front…but even this is generally better over time versus paying the utility company.

One last thought: installer in-house financing is convenient, but can be costly. If you need financing, don’t just go with the offering of the prospective installer. Several states offer subsidized programs with favorable terms and interest rates. Third-party financing can take longer, but it’s your money! In Ohio, we have the Re-Energize Program for small business and the Eco-Link program for homeowners. With these programs, we’ve seen our customers’ get rates as low as 2.1 percent versus six percent to eight percent. The OGW take here is to shop for the best rate so that you can get more quality solar at your business or home.

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