Buying a solar PV system can be a significant investment. That is why we at Otovo offer different payment options to help you secure your solar system and enjoy emissions-free renewable energy, as we understand that not all consumers have the same financial conditions. We want to adapt to all situations and provide our services to as many people as possible. 

In this article we will tell you everything you need to know about financing your solar panel installation:

  • What is solar panel financing
  • What options do you have to finance your residential solar panel installation
  • The advantages of solar panels financing with Otovo
  • Frequently Asked Questions about financing solar panels in the UK

Solar panel financing

Like many home improvement investments, residential solar panel installation usually requires large upfront and or all at once payment. The concept behind residential solar panels financing is that as a consumer you can acquire your solar panel system without an upfront investment, spreading the cost of the installation over a longer period of time. Instead of these large payments, you are granted a loan to buy the system. The loan is usually granted to you by the installer or a third-party financial services institution. It generally carries  interest costs and is paid-out in monthly instalments throughout the term of the agreement.  


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What options do you have to finance your solar panels system in the UK?

There are several options you can choose to finance your solar panel system:

Subscription

Subscription models are financial arrangements in which a person pays to use something for a predefined period of time (known as a fixed term) with some maintenance and servicing included and also has the option to own it at the end of the term. When you choose to lease solar panels, an installer instals the system onto your property. You own all the generation from the system including any excess you would sell back to the grid using the Smart Export Guarantee. 

Subscription payments can increase over the term of the agreement. The rate at which the leasing payments increase will be determined in your agreement, so make sure you take this into account before you sign anything.

The fixed term of a solar panel leasing contract is normally 20 years, bringing monthly costs down. Once the leasing term is over, you have the option to buy the solar panel system outright, or have it removed. If you choose to go ahead with the option to buy the system you only have to pay the residual value of the contract to purchase the system, a nominal payment that is about the cost of one month’s payment. 

Solar panel leasing agreements can differ, so always check the terms and conditions carefully before you sign up. 

Personal loan

This type of financial product can be obtained through a bank or other financial institution and the terms are flexible depending on your credit worthiness and the duration of loan required. One should consider the interest rates which can vary according to the duration of the loan. 

Financing through the installation company

Installation companies will usually ask customers to put down a down payment to secure a contract and ask customers to pay portions of the remaining balance until installation. They may also have agreements with third-party financial services institutions to obtain financing for solar panel customers. The duration of these loans may vary, but usually tends to be between 1 to 5 years. Some lower interest rate products or even zero interest rate products are financed or subsidised by installation companies that may then pass along these costs to customers. 

Adding to your mortgage

Many mortgage providers will consider a solar panel installation accretive to the value of a home, like other energy and cost saving home improvement investments like improved insulation. If you have attractive mortgage terms it is worthwhile asking your mortgage provider to extend the borrowed amount to finance your solar panel installation

Direct purchase

Finally, the solar system can be acquired through direct purchase by paying the total cost of the system upfront. The main advantage of this method is that you own the installation entirely from day one and won’t be charged a single pence from then onwards. 

Do you want to know more about options for acquiring a photovoltaic system with Otovo?

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How to finance solar panels with Otovo

You can choose to finance your solar panel installation with Otovo through a subscription with Otovo or by being introduced by Otovo to a lender for a loan. Below you will find the advantages of this solution:

  • Peace of mind - With a subscription, Otovo is the owner of the solar system during the duration of the contract so we take care of the maintenance of the system, replacing defective parts even if they are no longer under warranty. We ensure the system is operating correctly and manage this for you so you can relax and enjoy emissions-free electricity.

  • Flexibility - With a subscription you always have the option to purchase your system outright at any point during the leasing contract.

  • Start saving now - A subscription or a loan allows you to enjoy the benefits of generating your own electricity now without the need to save up for the full installation cost. As soon as the system is installed you benefit from reduced electricity bills equal to the electricity you don’t need to import from the grid and augmented by the excess electricity you are able to sell back to the grid. 

Frequently Asked Questions 

Who can get a loan to install solar panels?

To obtain a loan of any type,the following conditions must apply:

  • Be 18 years old or over -  Being of legal age is a minimum requirement to obtain credit as evidence of regular income and stable credit history will be required. 
  • Have financial solvency - For a financial institution to grant personal credit, it is essential to demonstrate that the sum will be returned under the agreed conditions. In this sense, having a stable income or a permanent job helps speed up the process.
  • Provide the requested documentation - ID, bank account details, photocopies of payroll that demonstrate solvency.

May I make overpayments to my financing agreement?

If you choose a subscription to your solar system it is possible to make overpayments without incurring penalties. This will help you reduce the time to ownership.  If you choose to finance with a different financial services provider your ability to make overpayments will be set by the loan provider. Please make sure to check with the provider to see if fees will apply. 

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