Paying for Solar Is a Common Obstacle for Customers
Solar offers so many advantages to homeowners that it is often hard to understand why more homes don’t have solar installations. For many, the main obstacle to going solar is the cost. Between the equipment and the installation costs, the upfront expense for a homeowner can be more money than they want to part with at any given time.
So, cost will inevitably be one of the most common hurdles you will have to overcome when selling solar to homeowners. One way to help make the expense more palatable is to educate your customers about the various solar financing options available to them. Here are four ways your solar customers can finance their solar power systems.
#1: Unsecured Solar Loans
Unsecured solar loans are easy to get, but the borrower does need to have good credit in order to qualify for one. On the plus side, no collateral is needed with this type of loan, and some loan providers even include extra features in their loans at no extra cost, like system monitoring and extended warranties.
#2: Secured Solar Loans
If the customer has less-than-perfect credit, then they may want to consider a secured solar loan. This type of loan is typically issued with the home serving as collateral. Plus, the homeowner can take the 30% federal tax credit on the full cost of the installation after just making a couple of payments.
Secured loans also tend to have lower rates and longer payment terms than unsecured loans. The biggest downside to this loan is that a lien will be on the home until the loan is paid in full, and this can pose a problem if the homeowner will be planning on moving before the loan is repaid.
#3: Solar Leases/PPAs
Solar leases and third-party power purchase agreements (PPAs) provide the ability for homeowners to have their systems installed for no money down. Instead, they simply make monthly payments, so they are essentially renting their solar panels. The biggest challenge for some homeowners will be the fact that not all states allow solar leasing or power purchase agreements through third parties.
#4: Personal Loans
Personal loans are easy to get, and the homeowner can still qualify for the 30% federal tax credit after making just a few payments. But unsecured personal loans are notorious for having high interest rates and this can really cut into or completely wipe out any savings the homeowner will enjoy from their solar system. For this reason, personal loans aren’t the best option, unless, that is, the borrower can get a very good rate on their loan.
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