Solar Energy Financing
Solarponics will help you understand, apply for, and manage the solar energy financing process to get the most out of a financing option. It is important to understand your options for getting a solar energy system. A little bit of knowledge can save you a lot of money in financing charges and interest. In addition, tax rebates can be considered as part of your financing program, helping reduce long-term borrowing. Although residential and commercial financing programs are completely different, it is important to involve your tax advisor in any discussions about solar energy payment options. A lease option is good for an individual who does not plan on ever moving, has no tax appetite to take advantage of the 30% federal tax credit, and does not have available cash to purchase. The total savings are the lowest of the three options, but there is little to no upfront costs or financial commitment. Leases can have a high rate of interest. Financing via a loan, such as a home equity line of credit, or other unsecured loan, is good for a homeowner who may sell their home in 10 years or less, who has good credit, but doesn’t want to commit to the full upfront costs of a cash purchase. Of course, loans have varying interest rates, which will eat away at some of the savings. Paying cash outright yields the highest rate or return on your investment.
What is PACE (Property Assessed Clean Energy)?
Property assessed clean energy, or PACE, financing allows property owners to fund energy efficiency, water efficiency and renewable energy projects including solar PV with little or no up-front costs. With PACE, residential and commercial property owners living within a participating district can finance up to 100% of their project and pay it back over time as a voluntary property tax assessment through their existing property tax bill.
Why use PACE financing?
- 100% solar financing on qualifying improvements
- PACE can eliminate the need to pay out of pocket for your project
- TERM: 12 to 20 year repayment options
- TRANSFERABLE: Because PACE ties the solar loan to the property, not an individual, the loan transfers upon sale.
Eligible for the 30% federal Tax Credit • No credit checks • 100% Financing • No Banks • No Added Debt • May be Tax Deductible • Fast & Simple Approval • Easily Transferrable If Property Is Sold
GOOD FOR A HOMEOWNER WHO: • wants greater solar savings than a lease offers • wants to OWN their solar energy system • doesn’t have great credit and cannot qualify for other unsecured loan • MAY sell their home in the next 20 years • wants the added benefit of deducting the interest on the solar financing (consult your tax advisor).
Want to see how PACE can save you money?
WHAT IS IT?
A solar financing partnership with Coast Hills Federal Credit Union and Ventura County Credit Union to offer unsecured loans with low rates and flexible terms of loan repayment up to 15 years in order to achieve manageable monthly costs on energy efficiency upgrades.
The program is funded in part by the American Recovery and Reinvestment Act via the U.S. Department of Energy’s BetterBuildings program and the California Energy Commission. emPower is also funded by California utility ratepayers and administered by Southern California Gas Company, Southern California Edison Company and Pacific Gas & Electric under the auspices of the California Public Utilities Commission.
WHO IS ELIGIBLE?
Every homeowner in SLO County who is current on their property taxes and mortgage payments. EmPower is funded in part by the American Recovery and Reinvestment Act, US Dept of Energy, SO Cal Gas, PG&E, So Cal Edison and the Public Utilities Commission.
- INTEREST RATE: as low as 5.99%
- TERM: Up to 15 years
- BENEFITS: • Making your home more comfortable, efficient and safe just got easier. emPower provide a variety of services that includes rebates up to $6,500, low interest financing, free expert energy advice, personalized customer support • Be More Comfortable • Save Energy and Lower Bills • Improve Air Quality • Update outdated Equipment • Solar energy system is eligible for the 30% Federal Tax Credit
- GOOD FOR A HOMEWOWNER WHO: • has a grossly energy inefficient home that needs multiple energy saving upgrades. Multiple upgrades can be financed together, saving more money • doesn’t have great credit and cannot qualify for other unsecured loan
**emPower financing is restricted to eligible projects. Solar electric systems are only eligible if completed with other eligible energy efficiency packages. See Eligible Projects page for more details
GOOD FOR A HOMEOWNER WHO: • has good credit • wants the lowest possible monthly payment • Does NOT want to finance a lot of upfront fees • wants flexibility in their financing • wants extended warranty, maintenance and production guarantee. Ask a Solarponics energy analyst if you have ANY questions about ANY solar energy proposal contract. We are here to help.
WHAT IS IT? Solar Energy Green Loans are renewable energy and efficiency loan administered by community bank or credit union. Traditionally called unsecured loans.
WHO IS ELIGIBLE? Most every homeowner with a 650+ credit score, 10% equity in home
INTEREST RATE: as low as 2.99%
TERM: 12 to 20 year repayment options
BENEFITS: • Eligible for the 30% federal Tax Credit • Interest may be tax deductible • Available with ANY panel manufacturer and equipment • Greatest flexibility of terms and equipment option(s)
GOOD FOR A HOMEOWNER WHO: • can take advantage of the 30% federal tax credit • does not want to take out a second mortgage, but wants a lower interest rate than an unsecured loan offers. A green loan must be used for qualified energy efficient upgrades only, which includes solar electric
• The 12-year, 2.99% option offers the LOWEST INTEREST RATE.
• 7 to 12-year, SESLOC Member Sustainability Loans, as low as 6.49% APR.LOWEST INTEREST PAID
• The 20-year, 5.99% option offers the LOWEST MONTHLY PAYNENT.
WHAT IS IT? Also referred to as a second mortgage, you borrow against built-up equity in your home. Traditionally considered a secured line of credit.
WHO IS ELIGIBLE? Every homeowner with a 680+ credit score • Current on first mortgage and 70% LTV (loan to value)
INTEREST RATE: as low as 3.99%
TERM: 10-years, renewable, or 30-year fixed
BENEFITS: * Eligible for the 30% federal Tax Credit • Historically low interest rates • You are investing in your home • No pre-payment penalty • Long-term repayment options for low monthly payments • Interest may be tax-deductible (consult your tax advisor) • Allows for interest only payments, keeping more money in pocket
GOOD FOR A HOMEOWNER WHO: • can take advantage of the 30% federal tax credit • doesn’t want to add any reported debt • has equity in their home • wants to take advantage of the historically low interest rates • wants the flexibility of interest only payment or prepayment without penalty
• The 10-year, 3.99% HELOC offers the LOW OUT-OF-POCKET financing, but the rate is variable.
• 30-year, 5.99% HELOC offers the LOWEST MONTHLY PAYMENT, but you pay more in interest over the 30-year life of the loan.
If you have NO tax liability, do NOT plan on selling your home in the next 20 year, and have no other means of paying for a solar energy system, a lease may be a good option for you. Leases come with 20, 25 or 30-year repayment term, with equipment warranties and production guarantees. DOES NOT quality for the 30% federal tax credit.
NOTE: Although a cash purchase or a fixed loan solar energy system will save you the most money, a lease can still save homeowners more money than doing nothing. As wilt all financing companies, make sure you are leasing thru a reputable institution. There are a few national companies who also have solid lease programs.
COMPARING A $0 DOWN LOAN VS. LEASE or PPA
San Luis Obispo County – Santa Barbara County – Monterey County
The California Solar Initiative Thermal Program for Commercial Swimming Pool Heating
• Rebates cover 50% of system costs, or more
• Includes multi-family residential, commercial, governmental, educational and non-profit
• Incentives are for gas customers of PG&E.
WHAT IS IT? Solarize San Luis Obispo County (Solarize SLO) is group purchasing power offering pre-negotiated, lower system costs. Sponsored and administered by Community Environmental Council, serving as homeowner advocate.
WHO IS ELIGIBLE? Every homeowner with a 680+ credit score, 10% equity in home, living in SLO County.
BENEFITS: • Typically 15% below market costs for same system • Allows for 30% federal tax credit • Installers (Solarponics) are pre qualified and vetted for quality assurance • Trusted advocate negotiating on your behalf.