Residential Solar Financing

Residential Solar Financing with Modern SolarWhen financing your homes solar system there are lots of options so it’s important you pick the right one. The following is a crash course and need to knows about residential solar financing.

Residential Solar Financing Options:
There are several ways to finance solar for your home. You can get a loan, lease, PPA, or Pace. These options are very different from one another and will change how profitable going solar will be for you. The right choice will leave you feeling confident that you just made one of the smartest investments you’ve ever made. The wrong choice will leave you feeling like you’ve been tricked with no way out of a bad long term deal.

Best Financing Option:
You’ll receive the maximum benefits with none of the headaches if you go with a loan. Surprisingly loans are the least offered method of financing in the solar industry. With a loan you’ll get:
1.) Monthly utility savings
2.) Property value appreciation
3.) Tax credit
4.) Lowest total cost of financing
5.) No lien on your home
6.) Easy transfers to next homeowner
7.) Flexible terms 5, 10, 15, 20, and 25 year terms
8.) Lowest interest rates

Good Financing Option:
Pace which stands for property assessed clean energy is a financing method that gets you money for energy upgrades like solar using your house as collateral. The repayment is made through your property taxes twice a year. The interest rate is decent, the tax deductions are potentially very high which is a good option for people with a lot of tax liability. The terms are good too 5, 10, 15, and 20 year terms. The interest rate is decent and the loan fee is also reasonable. Utilizing this method can potentially get you no payments for up to 24 months depending on what time of year it is and what specials are going on. This finance method is considered a loan and has all the benefits of a loan except that the home is used as collateral in the event of defaulted payments.

Worst Financing Options:
Leases and PPA are the most offered financing methods in the industry. This is because finance companies and larger solar companies like to own your system and keep your tax credit, depreciate your system for more tax credits, charge you interest, charge you loan fees, add an annual payment escalator, and then take back the system years down the line leaving you with nothing but mounts on your roof or they’ll give you the option of buying the system from them after you’ve already paid them many times the price of the system. All of this while holding a lien against the home as collateral the whole time.

What Makes Us Different:
We tailor solutions specifically to you because we care about you getting the best deal in the market. There are at least a dozen loan options with different terms, rates, and conditions. We’ll help you select the option the best fits your plans. Whether you plan on keeping your home or selling your home in a few years, we’ll make sure the option you select best suits you, your family, or the next family who purchases your home.

Getting Approved:
The approval process is easy and approvals happen within minutes. The minimum credit score needed to get financed is a 640, if you can’t qualify you can have a co-signer added to the agreement.

Understanding The Tax Credit:
The 30% federal tax credit is a huge incentive for those who pay taxes at the end of the year. If you receive a refund check at the end of every year then you really can’t utilize the 30% federal tax credit. Here’s an example:

System Cost:                         $40,000
30% Tax Credit:                    $12,000
You owe IRS:                         $10,000
After Tax Credit Applied
You owe IRS:                                   $0
Rollover Credit:                      $2,000

For more information on residential solar financing please contact us, we’d love to assist you through the process.