Financing Options with Project Solar

Project Solar partners with a few lenders to offer financing options without dealer fees or prepayment penalties. We also accept any third-party financing, including Home Equity Line of Credit (HELOC) options.

This article will outline the following topics:

Dealer Fees

Many solar companies offer low-rate loans, but these almost always include dealer fees. Dealer fees (also called origination fees or preparing fees) are essentially processing charges, and generally make up 15-25% of the project total (depending on the loan).

For example, financing a $20,000 system with a 25% dealer fee would raise your principal amount to $25,000.

Dealer fee loans are designed to be attractive at a glance, especially since they commonly include a low APR and/or low monthly payments. However, in many cases they can actually end up costing more in the long run.

Project Solar works with lenders to provide loans without dealer fees or prepayment penalties. With these loans, your principal financed amount is simply your project's total price. Plus, any early payments will go directly towards the principal.

This means that if you decide to pay your loan off early, you can avoid paying excess interest, and you don't need to worry about paying any dealer fees.

This is especially cost-effective for those who only own a home for a relatively short period of time, like most homeowners (a recent study showed that the median home tenure is about 13 years).
 
If you are planning to stay in your home for upwards of 20 years, a lower-rate loan can sometimes be beneficial.


Financing with Project Solar's Partnered Lender

Financing companies we've partnered with include Clean Energy Credit Union, Dividend Finance, and Climate First Bank (to name a few).

Rates for dealer-fee-free loans through our partnered lenders are typically between 6.49-8.99% (depending on lender, term length, and credit history).

You can review your financing choices with our free online calculator, which also provides a video walkthrough of loan options with a low monthly payment and loan options with a lower overall cost. 

If you've made a deposit and started the process with us, your Onboarding Specialist will have access to information about the exact lender and loan options in your area. They can also submit an application for you.


Financing Options for DIY Projects

Our financing partners cannot finance DIY projects, so DIY customers will need to pay cash or finance their project with a third-party.

This is mostly due to the fact that DIY systems will require payment prior to the shipment of equipment, which does not line up with our financing payment schedule.

In the past, some customers have opted to go with a financing company called LightStream for DIY projects or short-term financing alternatives. 


Financing with an Independent Lender

If you are a DIY customer interested in financing, you were not approved through a Project Solar partnered lender, or you simply would like different financing options, we also accept any independent financing alternatives.

It's important to note that we treat independent financing as a cash payment on our end, so you will be required to follow the cash payment schedule that is outlined in your contract. 

This unaffiliated list of solar financing companies can be a great resource when shopping around: Solar Loan Providers.

I's also a good idea to check with your own bank or credit union: they may have resources available to finance your system, particularly if you are considering a home equity loan or HELOC.

To read more about home equity financing options, check out this article from EnergySage.


Concerning the 30% Federal ITC & Solar Financing

The Federal Solar Investment Tax Credit (ITC) is a tax incentive that can reduce your tax liability by up to 30% of your project's total price.

For more information on the Federal ITC for Solar, check out our article titled The Federal Investment Tax Credit for Solar or this page from the Office of Energy Efficiency and Renewable Energy. As always, Project Solar does not offer tax advice, and we recommend speaking with a tax professional for the full information in regards to tax incentives. 

Most financing companies that include options for this federal incentive will structure their loans in one of two ways:


Automatic re-amortization loan structures

Some lenders will automatically re-amortize your loan after you've paid down the 30% credit, or after a specific amount of time.

For example: our California partner, Dividend, will re-amortize the loan after 16 months or after you've paid the incentive difference--whichever comes first.

If you use the incentive to pay down your loan, the loan will be re-amortized to keep your monthly payment lower and avoid excess interest.

If you choose to not pay the incentive amount, the loan will be re-amortized and your future payments increased to cover the difference.

 

Solar combination loans

Other companies--including one of our partners, Clean Energy Credit Union--will use a solar combination loan. A solar combination loan finances the 30% federal incentive and the remaining 70% cost separately. 

70% of the loan is financed for a longer term (~10-25 years), while the remaining 30% is financed for a short term (12-18 months) until you receive your tax credit.

Clean Energy Credit Union provides more detailed information explaining this process, which you can find here: How a Solar PV Combo Loan Works

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