Paying For Solar - Tips For Financing a Residential System
Editor’s Note: This blog post is part of the SunShot Initiative’s series on solar and real estate.
After you’ve made the decision to go solar, the next step is figuring out how to pay for it. Assuming you don’t have the cash to buy your solar energy system upfront, like the vast majority of Americans, there are a variety of financing options to help you hitch onto the solar bandwagon and start increasing the value of your home.
A new type of loan is making solar energy accessible to even more people. Fannie Mae’s HomeStyle® Energy mortgage gives borrowers the ability to complete clean energy upgrades up to 15% of the as-completed appraised property value of the home. Borrowers are able to finance energy-efficient upgrades when purchasing or refinancing a home, eliminating the need for a subordinate lien, home equity line of credit, Property Assessed Clean Energy (PACE) loan, or unsecured loan. The mortgage requires homeowners to attain a home energy report in order to show the value gained through energy savings over time is greater than the installation price tag.
The HomeStyle Energy mortgage changes the solar loan landscape. It will encourage solar installation companies to revisit their loan practices, allowing for more competition within the industry and reducing soft costs—such as permitting and installation—for consumers. People buying homes or refinancing mortgages now can have the cost of a solar array wrapped into their mortgages without worrying about higher interest rates.