Solar Companies Pass Expenses On To The Customer
The biggest reason why solar companies love financing is that it is the same as getting paid in cash upfront. The deal is funded by the finance company within 5 days. Solar companies don’t pay for anything until they have the funds other than their facility and a couple of employees.
Your better off getting your own financing in the majority of the cases. The loan you receive from a solar finance company is 5% simple interest so it sounds like a really good rate. That simple interest loan over twenty years ends up doubling the cost of a home solar system. The solar company doesn’t tell you that they pay $2500 in points to get that low-interest loan. They don’t tell you because your the one paying the closing costs and they know you wouldn’t agree with that. The closing costs get buried in the deal and are not revealed to the customer.
Solar Buyers Get Better Deals Getting Their Own Financing
There are more ways than I can count to get financing but many homeowners just get a traditional loan and pay-off their system quickly. When you pay-off a solar system quick you get a better return on investment. So in the ideal scenario, it’s best to pay cash upfront and reap the maximum benefits of solar.
At the end of the day, you are working with the power company’s money with minimal risk but great upside potential. In 2020 because of the unprecedented low-interest rates, there never will be a better time to refinance your home with home improvements included. You’ll probably get the solar free because your mortgage payment will not increase due to the lower-interest.
The obvious thing about financing solar is it raises your cost of a solar system. It’s wise to trim those costs as much as possible so your solar system will be profitable.