Own Your Solar Panels for Zero Down!Posted by Samantha on October 29th, 2014
These days, due to falling prices on panels and a rise in local and federal incentives that cover up to 100% of the investment, solar is more affordable than ever before! However, one downside continues to be that the entire installation cost must be paid for up front, with the majority of the incentives and tax credits coming back to the homeowner over the next several years. Even with an ROI of 4 - 6 years, an average upfront investment of $20,000 to $40,000 can still be difficult for many customers to come up with on the spot. This pricing predicament eventually gave life to the “solar leasing” model, wherein a company installs the solar and charges the homeowner a fixed rate lower than their current electrical rate for all power produced by the solar. In return, the solar company would front the entirety of the installation cost, and take advantage of all the incentives. Though leasing is currently not available in Washington State, SolarCity, the company that has become the household name for solar leasing, has championed this model across the US- they experienced huge losses as they continuously fronted all the money for equipment and installation of panels, but their business model predicts huge returns over time as their customers' solar power generates a quick payback.
This West Seattle customer financed their solar system with zero out of pocket costs!
While more solar is always a good thing, we at SolTerra believe that if you are staying in your home for more than 5 years, you benefit exponentially more from owning their solar rather than leasing it. As solar becomes more popular, pricing has dropped to $3 to $5/watt (down from $8 - $9/watt just a few years ago) and banks have become more familiar with the projects, creating specific lending programs targeted for renewable energy remodels like solar! In many cases, these programs allows homeowners to front 100% of the cost of their solar, requiring no money out of pocket. Homeowners get all the long term benefits of owning their system outright and reaping all the power that their solar produces, while not tying up their cash reserves indefinitely as the incentives pay back. Many of these programs also tout no prepayment penalties, so that homeowners can apply their tax credits and other incentives back onto the principal, paying off their loan even faster. Customers can take out a long term loan with a low monthly payment, reamortize after the first year, and continue to apply their incentives to the loan over the next several years, often paying it off in the same year as though they had paid for the project in cash!
This customer's 15 year loan term will actually be paid off in six years due to Washington State incentives!
SolTerra does not offer in-house financing, as we prefer to focus our efforts on our areas of expertise and constantly improving our solar installation services. However, we have vetted many financial institutions in the search of a bank that we can partner with and feel completely confident in recommending to our customers. In Washington, Puget Sound Cooperative Credit Union’s solar loans make up a huge percentage of the overall solar financing in the State. Unsecured and starting at 4.49% with no prepayment penalties, roughly 85% of SolTerra’s solar customer choose to finance their solar through one of PSCCU’s $35,000 or $50,000 solar loan options. In Oregon, there are a few more competitors: Umpqua Bank’s Green Street Lending Program has been a popular lending option for many years among Oregonians going solar- however they have been seeing more competition since SolarWorld finished their long search for a financing partner by choosing national institution Admiral’s Bank. Their solar loan can go as high as $50,000, and has a “step down option” that allows the lender to apply a large payment and lower their monthly loan payment once within the first 18 months. Local credit union First Tech is also rising in the solar game, though only popular among homeowners who already bank with First Tech, due to the length-of-account rules for their particular $50,000 solar loan.
Have your cake and eat it too: you can own your own PV solar system,
and pay for it entirely thought local, solar-specific financing programs!
With the incentives in Oregon and Washington still covering up to 100% of the cost of solar, there is no need to sacrifice your long term financial and environmental gain by leasing a solar electric system. If you have the ability to do so, you can finance the entirety of your solar system with one of the many available zero down loans with generous terms, keep your savings untouched, and lower your monthly electric bill AND your dependence on the grid! To see what solar can do for your home and how you can own your solar electric system for zero out of pocket, contact SolTerra at firstname.lastname@example.org today!