Do I Need To Finance Solar: Explained is an in-depth look at how and why financing is at the forefront of the solar revolution. The majority of companies are hyper-focused with financing.
The solar industry is structured with specialty lending companies that have researched the products the industry offers. In the majority of cases, these loans are low-interest twenty-year terms. These lending institutions have very strict enforcement guidelines for qualifying buyers because of the twenty-year term.
Financing solar equipment slows down the “Accelerated Savings Rate of Power Costs” for the homeowner.
Companies who predominately rely upon this option are putting their own short term gains ahead of the homeowner’s long term benefits.
The reason all the solar companies use these finance companies is that most homeowners can’t afford to pay cash. Another reason is that they can sell the buyer a payment instead of the actual cost of a system. The homeowner is less resistant with a loan payment because they don’t have to put any money down and they’re saving the power bill money. But by the time they pay it off because of a 20-year loan and the system can become antiquated, which means it’s a wash when they could have made tens of thousands of dollars.
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.
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.
| Add-Ons To Every Solar Proposal | Cost of Add-Ons |
| The Cost of Salesperson | $3000 |
| Sales Manager | $1500 |
| Proposal Builders and Permitting Department | $1000 |
| Overhead: Rent, Auto Insurance, Vehicles, and Utilities | $1000 |
| Cost of Leads and Marketing | $1000 |
| Points for Low Interest 20 Year Loan Terms (Frequently Hidden Cost) |
$2500 |
| Solar Panels, Inverter, Installation | $17,000 |
| Solar Company Profit | $5000 |
| Total | $32,000 |
| Add-Ons To Every Solar Proposal | Cost of Add-Ons |
| The Cost of Salesperson | |
| Sales Manager | |
| Proposal Builders and Permitting Department | $1000 |
| Overhead: Rent, Auto Insurance, Vehicles, and Utilities | $1000 |
| Cost of Leads and Marketing | |
| Points for Low Interest 20 Year Loan Terms (Frequently Hidden Cost) | |
| Solar Panels, Inverter, Installation | $17,000 |
| Solar Company Profit | |
| Your Solar Advocate Target Price $2.75 a Watt Totals for 7K | $19,250 Tax Credit – $5,005 Net Cost Is $14,245 |
“Your Solar Advocate” provides Upfront Pricing before you meet with a home solar contractor. This will give you something to compare against any other home solar proposal you receive. Our service is free, and you can use it to determine what will work best for you. Many solar contractors in Florida don’t like to provide the most important information without meeting you first and running a credit check. Avoid dealing with high-pressure sales techniques to get the answers to your questions. Our service reverses the process of going solar by providing upfront pricing directly from the contractor without all the structural costs of managers and sales managers. We get you the very best pricing from the very best home solar contractors, and the process is completely transparent. Please complete the form and provide your address and daily kilowatt consumption to receive an accurate solar system price in advance of any meeting.
Hello I’m Ron Hunnewell Owner and founder of Florida Solar Report
I have created Your Solar Advocate to connect you with the industry’s very best Home Solar Installers. You have many choices and may not be certain whom to work with? As Your Solar Advocate representing your interests, “I Cut Out The Middle Man” and set you up directly with the very best in the business! The best quality solar panels, Installation all for the lowest cost!