If you are thinking about buying solar for your home or purchasing a house with solar already installed you need to read the following.
The cash buyer wants to own the system. They are investing to hedge against future utility price increases. The system will paying itself off it 5-7 years.
Buying solar panels with a cash purchase is the most straight forward path to going solar. Plus, the total costs of solar panels and installation can be reduced by as much as 30% through the federal TAX CREDIT. The U.S. federal government offers homeowners a big tax deduction with the 30% Investment Tax Credit (ITC).
4. A Home Equity Loan
A home equity loan makes sense if you have home equity available. This type of solar loan allows Home owner to take advantage of tax-deductible mortgage interest.
Financing solar panels with a home equity loan may make sense if customer:
• Loans allow you to take advantage of tax incentives such as the 30% Federal Investment Tax Credit (ITC) to help reduce solar costs.
• Need to spread out costs to own your solar panels
• Want all of the benefits of ownership, including tax benefits
• Want to own the system free and clear at the end of the loan's term
• Increases the value of the property.
Types of funding available to customers currently offered by Sullivan Solar Power
1. Energy Loan Network
Credit Worthiness: A score of 720 or more almost always qualifies homeowners for finance products offered by ELN.
Offers a combo loan. 30% of the system is a 18 month same as cash loan that needs to be paid back. The other 70% is financed at 2.99% for 12 years.
2. San Diego Metropolitan Credit Union (SDMCU)
- Credit Worthiness: A score of 650 or more almost always qualifies homeowners for finance products offered by SDMCU.OC territories if the customer joins the Zoological society.
- Unsecured Loan
- Homeowner or Borrower Eligibility:
- Owners of residential, single family homes (1-4 units) located in San Diego County
- Twelve months at current job
- Must be eligible for membership with SDMCU
- Credit score greater than 650
- Meet SDMCU underwriting criteria
- The application can be submitted by the contractor or SDMCU using their internet site, call center or in a branch office.
- The borrowers will be contacted with the decision.
- The Contractor will submit a copy of the signed invoice/contract to the Credit Union upon approval
- Checklist for SDMCU funding
- Multiple Loan options 2.99% - 6.99%
3. Prepaid Lease
A prepaid lease is a one-time payment that eliminates your electric bill for the next 20 years. You do not own the system but it is similar to ownership. The out of pocket expense is the 70% cost of the system. The 30% tax credit is owned by the leasing company and is deducted from the out of pocket cost. You are essentially buying power upfront for the next 29 years at a discounted rate. The system is warrantied insured and protected for the next 20 years.
4. Home Energy Renovation Opportunity (HERO)
- HERO is the #1 energy efficiency financing program in the United States. HERO partners with local governments to make energy efficient, water efficient, and renewable energy products more affordable for homeowners.
- HERO is unique in that it provides financing for approved energy efficient, water efficient, and renewable energy products. HERO finances 100% of the cost to purchase and install eligible products. HERO offers low-fixed interest rates, flexible payment terms including 5/10/15/20 years for most products, and repayments are made through your property taxes. Additionally, if the property is sold before the HERO Financing is paid in full, the remaining payments can be passed on to a new property owner.
- No Credit Requirements
- There are no fees to apply for HERO Financing.
- The interest rate for HERO Financing varies depending upon the term. Terms can range from 5 - 20 years and will affect your rate. HERO interest payments may be tax deductible, which can lower the effective interest rate.
- Just like a mortgage, interest paid on the principal balance is tax deductible. A property owner's initial payments will be comprised of more interest and less principle. Over time, payments will be comprised of more principle and less interest. Therefore, the amount that is tax deductible will vary over the term of the financing, just like it would be with a mortgage.
- Homeowners who meet the minimum criteria below are eligible for HERO Financing. Specific eligibility requirements for residential properties include the following:
- All mortgage-related debt must not exceed 90% of the value of the property.
- Mortgage payments must be current at the time of application, and property owner(s) must not have had more than (1) 30-day mortgage late payment over the past twelve months.
- Property taxes for the prior twelve-month period must have been paid on time and no more than one late payment within the past three years.
- No outstanding involuntary liens, such as tax liens or mechanic's liens.
- The property owner(s) must not have filed for bankruptcy in the past two years.
- If the homeowner has had a bankruptcy record between two and seven years old they will not qualify, the property owner(s) must not have had any additional late payments more than (60) days past due in the last (24) months.
- Mobile homes must be permanently attached to the property and the owner of the underlying property must be the applicant and be subject to real property taxes.
5. SunPower Lease
If a customer prefers a low monthly fee for access to solar energy, then a solar lease may be the way to go. A lease requires no down-payment $0 out of pocket and offers affordable monthly payments less than what they are currently paying for electricity. It is a fixed payment for 20 years so it is easy to budget around. Solar leases also include a performance guarantee and regular maintenance for the entire 20 years. The system is insure protected and warrantied for the full 20 years by the leasing company.
The lease is transferable and can the new owner can take over the monthly payments in the sale of the home.
• Offering Low Payments and a Performance Guarantee • Have a good credit score 680 required
- U.S. based (Silicon Valley) publicly traded with U.S. and worldwide manufacturing facilities
- Over $2.5 billion annual revenue
- Over 5,500 employees
- 7+ million panels installed worldwide
- Over 100,000 residential installation 60,000+ in US
- SunPower Leases offer:*
- Low or No down-payment
- Production guaranteed, or SunPower will pay or credit you Flexible options at end of lease term—renew your lease or SunPower will remove it at no cost
- SunPower Loan Programs:
- A score of 700 or more almost always qualifies homeowners for finance products offered by Sun Power Lease.
- Checklist for SunPower funding
Purchase Power agreement. This is similar to a lease but you pay a certain cost per kilowatt hour for the power produced by the syste, This # is set prior to signing a contract. From time to time we see that the rate at which you pay for the power you produce actually escalates at 2.9% for the 15-20 year term. You wind up owing the utility company money if their system is not designed to offset the whole bill. You will also wind up paying the monthly kilowatt hour charge to the leasing company. We would not recommend this solution.
Please contact me with any questions you may have.