Solar Financing

[compchat]

So I am taking out a loan through the solar recommended credit union to purchase my solar system. Basically it is an 11 KWh system with cost of $44,000. Interest is 6 1/2 percent over 20 years.

Here's the odd thing. As we know the owner can take a 30 % federal tax credit from the price of the installation. What they've suggested I do is to take out two loans. One for the loan - tax credit = 31K and the second loan for $13K tax credit. THe 13 k loan would sit at zero interest for 18 months. After that I could repay it or it could be financed for the remainder of the term of the first loan with same rate. From what I understand I still get the tax credit too.

I'm not understanding exactly what/ why they are doing but it seems they are concerned that I would take the tax credit due me and pay down the 44K loan thus leaving them with less interest earnings over the term of the loan.

I'm thinking they don't want people paying down their solar loan early and hope that you burn through the 13K they loan you in the 18 months that it's interest free. Any other ideas? Good deal or bad deal ?

[inetdog]

So I am taking out a loan through the solar recommended credit union to purchase my solar system. Basically it is an 11 KWh system with cost of $44,000. Interest is 6 1/2 percent over 20 years.

Here's the odd thing. As we know the owner can take a 30 % federal tax credit from the price of the installation. What they've suggested I do is to take out two loans. One for the loan - tax credit = 31K and the second loan for $13K tax credit. THe 13 k loan would sit at zero interest for 18 months. After that I could repay it or it could be financed for the remainder of the term of the first loan with same rate. From what I understand I still get the tax credit too.

I'm not understanding exactly what/ why they are doing but it seems they are concerned that I would take the tax credit due me and pay down the 44K loan thus leaving them with less interest earnings over the term of the loan.

I'm thinking they don't want people paying down their solar loan early and hope that you burn through the 13K they loan you in the 18 months that it's interest free. Any other ideas? Good deal or bad deal ?

I do not see how it gets them any more interest with the $44k loan, and I see administrative reasons for dividing it into two loans.
I would do it the way they propose.

[J.P.M.]

So I am taking out a loan through the solar recommended credit union to purchase my solar system. Basically it is an 11 KWh system with cost of $44,000. Interest is 6 1/2 percent over 20 years.

Here's the odd thing. As we know the owner can take a 30 % federal tax credit from the price of the installation. What they've suggested I do is to take out two loans. One for the loan - tax credit = 31K and the second loan for $13K tax credit. THe 13 k loan would sit at zero interest for 18 months. After that I could repay it or it could be financed for the remainder of the term of the first loan with same rate. From what I understand I still get the tax credit too.

I'm not understanding exactly what/ why they are doing but it seems they are concerned that I would take the tax credit due me and pay down the 44K loan thus leaving them with less interest earnings over the term of the loan.

I'm thinking they don't want people paying down their solar loan early and hope that you burn through the 13K they loan you in the 18 months that it's interest free. Any other ideas? Good deal or bad deal ?

As long as you buy the system and are the owner, you will get the ITC as long as you're up/running/POCO sign off by 12/31/2016. As for financing shenanigans, as long as both loans have the same interest rate, term and conditions, I think it's about a wash. HOWEVER, if there are fees for each loan that are fixed - like origination fees, servicing fees and other crap banks and other financial slugs are fond of, then I'd think one loan vs. 2 would be preferable. ALSO, if it was me, (only), I'd know that I'd be looking at a chunk of 18 mo. interest free cash and think of things to do with it that don't involve repaying a 30 % incentive, and get my knickers in the wringer. I'm probably not much diff. from most folks in that respect. My high regard for financial slugs leads me to suspect that's what they have in mind when they make suggestions such as 2 loans. Watch out for the fees/tricks/B.S.

[solar_newbie]

One thing to remember your tax must be more than $13k

[compchat]

North Facing Panels

Is it cost effective to have panels installed facing North ? By facing the panels North how much power generation loss would you expect assuming irradiance of 1000 KW/M2 due South. I've walked the neighborhood in southern california and have seen several installations with perhaps 5 panels facing north.

As the Sun (equator) is South of my roof why would the installer suggest a few north facing panels ?

Thanks

[solar_newbie]

Is it cost effective to have panels installed facing North ? By facing the panels North how much power generation loss would you expect assuming irradiance of 1000 KW/M2 due South. I've walked the neighborhood in southern california and have seen several installations with perhaps 5 panels facing north.

As the Sun (equator) is South of my roof why would the installer suggest a few north facing panels ?

Thanks

Do you have enough space for 11kw system in south, west and east ?

[compchat]

Don't know yet for mine. I was asking a general question as I noticed there were panels facing North on other installations.

[SunEagle]

Don't know yet for mine. I was asking a general question as I noticed there were panels facing North on other installations.

If you live in the Northern Hemisphere (Equator to the South) then any North facing pv panel will have a significant reduction in output to the point of them being useless during the Winter Months.

[8.4]

One thing to remember your tax must be more than $13k

If installed by this year, you can spread that out over two tax years. For most people that is doable.

[J.P.M.]

Don't know yet for mine. I was asking a general question as I noticed there were panels facing North on other installations.

Try running PVWatts with orientations of tilt and azimuth as you see them wonder about, and note the diff. in annual output for equal size systems of, say. 1 kW at those, or any orientation for that matter.

[thejq]

So I am taking out a loan through the solar recommended credit union to purchase my solar system. Basically it is an 11 KWh system with cost of $44,000. Interest is 6 1/2 percent over 20 years.

Here's the odd thing. As we know the owner can take a 30 % federal tax credit from the price of the installation. What they've suggested I do is to take out two loans. One for the loan - tax credit = 31K and the second loan for $13K tax credit. THe 13 k loan would sit at zero interest for 18 months. After that I could repay it or it could be financed for the remainder of the term of the first loan with same rate. From what I understand I still get the tax credit too.

I'm not understanding exactly what/ why they are doing but it seems they are concerned that I would take the tax credit due me and pay down the 44K loan thus leaving them with less interest earnings over the term of the loan.

I'm thinking they don't want people paying down their solar loan early and hope that you burn through the 13K they loan you in the 18 months that it's interest free. Any other ideas? Good deal or bad deal ?

The reason for breaking it into two loans is due to amortization and prepayment. Your loan is amortized based on 20 yrs, hence the monthly payment is fixed, and they don't like you to payoff early (watch for prepayment penalty clause in the loan paper). Because they know you will get back $13K due to tax refund/credit, it's easier to have 2 loans, so the first loan is not affected when you payoff the 2nd loan. If you have only one loan, and payoff 1/3 after a few month, the total loan duration will be shortened even with the same amortization. In that case your month payment will be higher (comparing to 2 loans) in addition to prepayment penalty (if any). Since the bank wants you to hold the note longer, as well as simpler accounting for them, 2 loans are normally preferred. Loan origination fees etc. shouldn't be a factor since they are a percentage of the total amount.

As for your price, $4/W sounds high for 11KW system. Depending on where you're, low $3/W is more reasonable. But your price probably has the loan closing cost (which varies widely) included.

[Naptown]

Don't know yet for mine. I was asking a general question as I noticed there were panels facing North on other installations.

I am willing to bet money that they are in landscape orientation with a bottom skirt and were installed by Solar City.
I see that around here more than I can remember all the spots.
That and under huge trees.

[J.P.M.]

I am willing to bet money that they are in landscape orientation with a bottom skirt and were installed by Solar City.
I see that around here more than I can remember all the spots.
That and under huge trees.

FWIW, Vivant is also using skirts around here as well as Solar****y. They're the only 2 I've noted.

[cebury]

FWIW, Vivant is also using skirts around here as well as Solar****y. They're the only 2 I've noted.

Are they for aesthetics or do they help installers align modules somehow?

[J.P.M.]

Are they for aesthetics or do they help installers align modules somehow?

I believe they are mostly for aesthetics, as most arrays seem to have good alignment without them.

My guess is that if more folks knew that such appurtenances may well degrade performance slightly due to the possible tendency of such things to inhibit air circulation beneath the array and thus raising array operating temps., there might be fewer of them.

I suspect it's also a nice way to add profitability to a job as in: "Of course you want to make your array look good don't you Mr. Ferndock ? Well, for only $250 more we can address your concerns and solve the problem" (That problem being the one they just created BTW).