Solar loans

[cthetoy]

It's not that the installers are jacking up the installation prices...it's that these super low interst rate loan have very high loan fees. There are many solar finance companies out there...Green Sky, Enerbank, and Mosaic to name a few and their fees are 15% - 19% of the total price.

I was told that the extra premium was called dealer fee. 28k cash or find my own finance or 33k 2.9% financed with Mosaic loan. Payments were lower with the Mosaic loan because you have to put the federal tax credit back to your loan but the dealer fee of 5k is outrageous

[SunEagle]

I was told that the extra premium was called dealer fee. 28k cash or find my own finance or 33k 2.9% financed with Mosaic loan. Payments were lower with the Mosaic loan because you have to put the federal tax credit back to your loan but the dealer fee of 5k is outrageous

You would be surprised what it cost companies to take out a loan which is what they would have to do to finance that install. They just pass those fees on to the customer and add a "slight charge" for their time.

If you purchased the system with cash or from your financed loan then there is no need for them to mark up the price.

Unfortunately it is called business and most companies do not have the capital to purchase the installation so they have to borrow first and then charge the customer to cover the interest rate of what they borrowed.

[tatumjonj]

I'm paying a dealer fee which is 12% of the total. My installer has worked to make the price low enough where some of the fees are absorbed by them and some by me. Small price to pay for 3.99% versus 8.35% for HERO or 10% for some of the other loans I've seen. Run the numbers on a loan amortization calculator and look at how much interest you pay at 3.99 vs 8.35% taking it to term or paying it off in even 5 years. I will have my system paid off in 39 months. We're not financing the entire thing, I'm putting down 5k and I will use the tax credit to further buy down the loan. In all, my system will be paid off in just over 3 years and I figure the system will have paid for itself inside 6 years. If you're going to throw money at something, this is the thing to throw it at. We have no other debt, our house will be paid off in 7 years, so in 7 years our biggest bill until retirement will be what I spend on golf every month.

[SunEagle]

I'm paying a dealer fee which is 12% of the total. My installer has worked to make the price low enough where some of the fees are absorbed by them and some by me. Small price to pay for 3.99% versus 8.35% for HERO or 10% for some of the other loans I've seen. Run the numbers on a loan amortization calculator and look at how much interest you pay at 3.99 vs 8.35% taking it to term or paying it off in even 5 years. I will have my system paid off in 39 months. We're not financing the entire thing, I'm putting down 5k and I will use the tax credit to further buy down the loan. In all, my system will be paid off in just over 3 years and I figure the system will have paid for itself inside 6 years. If you're going to throw money at something, this is the thing to throw it at. We have no other debt, our house will be paid off in 7 years, so in 7 years our biggest bill until retirement will be what I spend on golf every month.

Everyone has a different set of numbers to look at. For you it works out for a short pay back.

I have run the numbers and if I "purchased" a 6kw pv system today, based on what my POCO charges me (~$0.12/kWh) and what I use a year it will take me about 9 years for me to get back what I spent. If I go through any type of loan it will take longer. So for me it is not worth going with solar yet.

[solarfrank]

I'm paying $3.51/watt before tax credit.

Can you tell us after you sign the contract at $3.72/watt how make it to drop price to $3.51/watt ?

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[tatumjonj]

Can you tell us after you sign the contract at $3.72/watt how make it to drop price to $3.51/watt ?

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Sorry, my original $/watt was based on me erroneously thinking I was getting 30 panels versus the 31 I'm actually getting. I received several quotes and every one of them quoted me a different number of panels. So what I thought was a good deal turned out to be even better.

[josefontao]

I've heard good things about HERO, but at 10% rate I dont see anything good about it.

[tatumjonj]

I've heard good things about HERO, but at 10% rate I dont see anything good about it.

I think the best thing about HERO is that it's super easy to qualify for. We didn't look into it too closely but my current installer told me the interest rate was "around 8.35%." That was enough to make me look elsewhere. I have no idea if that information was true though.

[J.P.M.]

I think the best thing about HERO is that it's super easy to qualify for. We didn't look into it too closely but my current installer told me the interest rate was "around 8.35%." That was enough to make me look elsewhere. I have no idea if that information was true though.

HERO loans can be a source of funds, but the up front fees can be harsh, and less than a decent FICO score will jack the interest rate, putting the easier qualifying aspect of the HERO loans in a light that may make them look like another trap for those who can't get funds any other way.

[tatumjonj]

HERO loans can be a source of funds, but the up front fees can be harsh, and less than a decent FICO score will jack the interest rate, putting the easier qualifying aspect of the HERO loans in a light that may make them look like another trap for those who can't get funds any other way.

We never really looked into them too hard, but no wonder nobody could say exactly what the rate was. I had no idea the rate could be variable.

[HX_Guy]

Everyone has a different set of numbers to look at. For you it works out for a short pay back.

I have run the numbers and if I "purchased" a 6kw pv system today, based on what my POCO charges me (~$0.12/kWh) and what I use a year it will take me about 9 years for me to get back what I spent. If I go through any type of loan it will take longer. So for me it is not worth going with solar yet.

That doesn't make sense to me when people look at it that way. How much are you spending now per month/year on electricity? Why not put that money toward a loan instead as long as it doesn't cost you more?

[KRenn]

We just got approved with Matador Credit Union (MCCU) at 3.99%. 12 year term, we'll have it paid off in 4. And a one time principal reduction in the first 18 months. So after you get your Federal Tax credit, you can pay down the principal and they'll adjust the loan payment. No pre payment penalty. Seems like a pretty good deal if you don't want to do cash for the entire thing today.

That is a pretty stellar deal, a lot of the solar financing offering typically follow either one of two models->


A. You have no interest or very low interest for 12-36 months but the dealer jacks up the price per watt to account for the cost that they must pay for the loan service


OR


B. Long term financing options running from 2-10 years with interest rates ranging from 6.99 to 9.99%




3.99% for 12 years is outstanding.

[cthetoy]

That doesn't make sense to me when people look at it that way. How much are you spending now per month/year on electricity? Why not put that money toward a loan instead as long as it doesn't cost you more?

For me a loan makes sense since I know I will not move for at least 10+ years. Others it might not if they are not certain if they will move. It would be hard to swallow if you moved after 5 years and still have 5 years left on the loan.

[SunEagle]

That doesn't make sense to me when people look at it that way. How much are you spending now per month/year on electricity? Why not put that money toward a loan instead as long as it doesn't cost you more?

I do not plan on living in this house as long as it would take to pay off the "loan" of installing a solar pv system. To cover all my electric usage I would have to install a 10kw system (if it would fit). Even if I can get it at a final cost of $2/watt it would still take longer to pay back then I plan to live here.

IMO this is no different then deciding on getting rid of a perfectly good 5 year old vehicle that gets 25 MPG for a new $35000 vehicle that gets 40 MPG.

If I drive 15000 miles per year I use 600 gal of gas with the 5 yr old car or at $4/g ~ $2400/yr.

Driving the new car the same 15000 miles per year uses 375 gal of gas or ~$1500/yr.

So I save $900 per year but had to spend $35000 to do that. Even if gas goes back to $5/gal it will take > 20 years to pay if off the new car from saving gas which is much longer than the life of the car.

[carlsbad]

FYI HERO interest rate is 5.95% for 5 year term, with an one-time administrative fee of 6.95%. Does require a hard-pull on your credit report but approval is not based on FICO score. Interest rates are purely based on the length of financing.

https://energycenter.org/sites/default/files/docs/nav/policy/webinars/PACE%20Webinar%20Presentation%20Final.pdf

Also, since it's not a loan that shows up on your credit report, it doesn't affect credit scoring like HELOC (% utilization) would.