Ways to finance a solar system

01/31/2019

A common question we tend to get is "What is the most cost effective way to pay for a solar system if I decide to get the install?" Taking cash off the table is the first thing I do because few people have "new car money" in their checking account. The most common route our customers tend to take is to re-finance their mortgage with their lender and add this home improvement loan to their mortgage payment. This is a smooth process in most cases and is nice because the homeowner doesn't add another individual loan, instead just making their mortgage payment go up slightly. This route will also usually give you the lowest interest rate. All of that being said the home improvement loan is not always an option for customers, so what then? When you don't have a lot of equity built up in your mortgage you might run into an issue asking for a large home improvement loan.  One option that you could consider is what is called "green lending". Believe it or not there are financing institutions out there that give loans on anything environmentally beneficial. This includes electric cars, geothermal, solar panels, and anything else that creates a sustainable future. These interest rates can be higher than your mortgage interest rates in most cases, but some lenders will stretch this loan out for you to 20 years if you wish. The more common loans are in the 5 and 10 year range though. We have had a few customers that have told us they did not need to put any money down with their green lender, which is very convenient. The green lending institutions will often consider you if you obtain a 650 credit score or higher, anything over a 700 will defiantly get you a loan upon your request. Keep in mind that every bank will offer you a loan for solar panels in the form of a home improvement loan with acceptable credit of course. The last topic I want to cover on financing your solar panels is your state and federal incentives. Just because you financed your system does not mean that you don't get all of your 30% federal tax credit, and state incentive. You absolutely do! Which could potentially mean that you could put zero or minimal money down, and then receive state money, and save money on your yearly taxes. If you have any more questions regarding solar financing please reach out to us and we can direct you to the companies that we have a good history with.