A few years ago, if you wanted to get solar panels installed on your roof at home, you had to make a big cash payment upfront. Even after the 30% Federal Tax Credit and other incentives, that could still have meant you’d have to pay $15,000 or more.
The problem was that few homeowners had that kind of money just sitting around. As a result, solar remained affordable only to a few families with ready cash.
We’re so glad that times have changed. Today, since the cost of solar panels has come down by more than 50% over the last five years, solar is more affordable than it’s ever been. And, as important, modern financing has made it easier for many families to go solar without having to pay much if anything upfront.
The Right Way to Get No Money Down Solar
No money down solar or zero down solar is the Holy Grail of the residential solar industry. More than anything else, this type of financing has helped solar go mainstream from coast to coast. And that includes Virginia.
It’s wonderful when it works. Zero down financing can help a homeowner get started on solar right away, without having to wait years to save up for a big upfront payment. And with financing that’s done right through a low-interest loan, you can start saving money right away since your monthly loan payments will be lower than the amount you’re saving each month on your electric bill.
That’s how it was for our customer Mark Rathke in Bridgewater, who financed his home solar system with a home equity line of credit (HELOC) from the local bank that already handled his mortgage.
Some solar installers in Virginia offer their own financing, as Main Street Solar does. Though the interest rate on a solar loan may be higher than you could get from your own bank with a HELOC, the rate is still competitive with other types of financing. For many families, a solar loan through their installer can be a convenient way to get started on solar now without the hassle of having to arrange financing from an outside source.
The Wrong Way to Get No Money Down Solar
Unfortunately, some solar installers offer no money down financing that’s less attractive. Not all solar loans are created equal and some companies are not able to offer all their customers a low interest rate or even a rate that’s competitive with other financing. They may get their customers into solar loans at high interest.
As a result, some solar customers find themselves making monthly loan payments that are so high that they eat up all the savings on the customer’s electric bill from solar. In this case, a customer will realize little or no savings with solar until their loan is paid off, typically after seven years, but possibly longer.
In the worst case, a customer may actually lose money during the period of a solar loan. The solar installer may have put up the wrong amount of solar, may have miscalculated how much money the customer would save, or may have slotted the customer into a loan with such a high interest rate that the monthly loan payments are actually higher than what the customer is saving on their electric bill. Ouch!
Of course, even the worst solar loan will be paid off at the end of its term. At that point, the customer will own the solar panels free and clear without having to make any monthly loan payments. Since solar panels are usually under warranty for 25 years at least and will produce power at a high rate for 30 years or more, after a seven-year solar loan is paid off, the customer can still get a couple of decades of free energy.
But losing money through high loan payments in those first years reduces the overall payoff of a home solar system.
The Best Solar Financing You Qualify For
Fortunately, you don’t need to lose money through bad financing terms just to get no money down solar. If you get the right kind of loan for your situation, you can get solar with no upfront payment that’s a good enough value to maximize your return from solar.
No type of financing is right for every homeowner. Getting a good interest rate on a HELOC or a solar loan depends on your credit, how much equity you have in your home or other factors.
An experienced solar installer like Main Street Solar can help you understand all the financing options available for solar in Virginia and give you smart advice to help you get the most out of your investment in solar. Contact us for a free quote and we’ll give you our best advice.
No money down solar can be more expensive than you think with the wrong approach. Good financing will make all the difference to making zero down solar a worthwhile investment for years to come.
— Andrew Brenner, Main Street Solar
