RMSWI’S Transparent Solar Financing
The real cost of solar financing is often hidden from the customer because solar companies tend to have two prices. They offer a price for customers that want to pay cash and a higher price for customers that want a loan. Rocky Mountain Solar & Wind, Inc. (RMSWI) offers financing using one solar system price: the lower price. Solar financing companies that offer quick financing and charge the “lowest” interest rates usually have the highest origination (contractor) fees. However, you will not see these charges because they are added into the total price of the solar system that the solar company quotes you. Other solar companies usually charge an origination fee of 10-16% of the loan value. RMSWI offers financing through four different companies.
We have ranked them generally according to desirability or best deal, especially lowest interest rates, although each customer’s situation is unique:
1. Green Bank of Colorado (located in Colorado Springs)
2. RENU Loan (Colorado Energy Office and Elevations CU)
3. Generations Credit Union Summer Solar Loan
4. Home Loan Investment Bank
If you called a solar company other than RMSWI, and wanted to buy a 5 kW solar electric system with cash, they might quote you $20,000 (before incentives); however, if you called the same solar company and asked for a zero-down solar loan then they would likely quote you a system price of $23,000. Other solar companies will quote you a monthly repayment amount on the loan rather than tell you the total price of the system including the price of the loan, since the total price of a financed solar system is much higher than a system paid for with cash. These solar loans from other companies sometimes advertise rates of 2.99%, which sounds very attractive, but the real cost is much higher because the system cost has been inflated by 10-16%. A financed solar system can still be economically feasible if it has enough of a return on investment.
For example, and IRR of 8-15% is a fantastic return. The return on your solar investment could be better if you are able to finance the solar system based on the equity in your home. Then, it’s possible to pay the solar company the cash price for the solar system.
For more information on solar financing please email: firstname.lastname@example.org
Additional information: Solar Loans: Everything You Need to Know (solarreviews.com)