Financing Options for Solar Energy in Maine & New Hampshire
Financing your solar project is one of the safest, most secure investment options on the market today.
Because the solar array harvests free 'fuel' from the sun and converts it into highly valuable kilowatt hours of electricity, the monthly loan payment is covered by the 'solar cashflow' generated by the array.
Once the valuable clean electricity generated by the solar array repays the loan, you will continue to enjoy the economic benefits of the solar cashflow for your household for another 20+ years, all the while eliminating thousands of pounds of pollution from the atmosphere annually.
A number of excellent financing options with favorable rates are available for you if you're ready to go solar but can't afford to pay for it all up-front.
Available Solar Financing Programs
- PACE or Power Saver Loans - Limited to Maine, 4.99% APR and no money down for eligible homeowners
- FHA Home Improvement Loans - Available throughout New England, eligibility based on credit score, competitive rates, doesn't tie up home equity
- Lake Sunapee Home Equity Loans - 4.99% fixed rate over 10 years, no prepayment fees and ability to re-amortize
- Mortgage or Refinance Through Your Local Bank - Can offer better interest rates if timed when buying or refinancing your home
Solar Financing at a Glance
|FHA Home Improvement Loans||Home Equity Loan||Power Saver||Mortgage or Refinance|
|Max Financed Amount||$25,000 + $15,000 more with "Plus 1" for qualified customers||Based on home's value||Up to $25,000||N/A no fixed cut-off|
|Availability||All Markets, we can refer you to a bank||All of NH, parts of ME & MA||Anywhere in Maine||All Markets, you find a bank willing to lend|
|Equity||No equity required||Loan tied to home's equity||Loan tied to home's equity||Varies depending on situation|
|Special Considerations||Interest and HUD insurance fees may be tax deductible*||Can use solar's value to add equity to home||Project must include air sealing or air source heat pump||Interest may be tax deductible*|
|Rates||4.95-9.95% depending on Creditworthiness||Fixed 4.99% APR||Fixed 4.99% APR||Varies 3.5% - 4.5% is national average as of 8/12/2013 (Source: Bankrate)|
|Mortgage Type:||2nd mortgage||No less than 2nd position mortgage||Primary mortgage|
* Table for informational purposes only. Consult your tax advisor.
Financing a solar array allows you to invest in clean energy technology without going out of pocket for the entire cost of the system. By owning, rather than leasing, a system, you have the opportunity to recoup federal and state incentives and apply them to the principle of the loan.
In many cases, a financed solar energy system will be cash flow positive either from Day 1 or from the moment you can "Step Down" the loan payments. In other words, you can spend less money each month making solar payments than paying the power company. As the cost of utility power rises, your financed rate stays fixed. Over the life of the system, you'll save thousands of dollars in energy costs.
Power Saver Loans for Solar
As of November, 2013, Efficiency Maine's PowerSaver loans have more flexible requirements that make it easier to finance solar projects. This is great news, as PowerSaver offers up to $25,000 in financing at a rate of 4.99% over a period of up to 20 years. With those terms, virtually all solar projects will be cash flow positive from day 1, meaning that the projected savings from the solar system exceed the cost of the loan.
Key points on PowerSaver:
- Maximum loan amount of $25,000
- No longer requires an energy efficiency model, however, to qualify a solar project must either be accompanied by air sealing and building assessment ($600 service, $400 of which is paid by Efficiency Maine), or with the installation of an air source heat pump (which also qualifies for a rebate from Efficiency Maine)
- Project limited to residents of Maine
- Fixed rate of 4.99%, 5, 10, 15, or 20 year term, no pre-payment penalty or closing fees
No closing costs, no downpayment, and reasonable financing rates make PowerSaver an excellent loan to use for financing solar. Here are how the economics work on a few common solar projects:
- Solar hot water replacing oil boiler:
Total cost: $11,100 (including $600 of air sealing)
Rebates/incentives: $3,150 as 30% solar federal credit, $400 Efficiency Maine air sealing rebate
Financed amount: $7,550 (about $50/month over 20 years)
Savings: Offsets up to 300 gallons of oil at $3.60/gallon, resulting in an annual savings of $1,080
Bottom line: The solar loan saves you $480 a year!
- 4kw Solar photovoltaic array:
Total cost: $14,600 final project cost
Rebates/incentives: $4,200 as 30% solar federal credit, $400 Efficiency Maine air sealing rebate
Financed amount: $10,000 (about $66/month over 20 years)
Savings: Offsets ~5,080 kWh of electricity at $0.16/kWh, resulting in an annual savings of $813 ($67/mo.).
Bottom line: The solar loan is break even with utility rate, with savings over time as utility rates increase, and system ownership after 20 years.
- 5kw photovoltaic array with air source heat pump (ASHP):
Total cost: $22,100 ($17,500 of solar and $4,600 for heat pump)
Rebates/incentives: $5,250 as 30% solar federal credit, $500 heat pump rebate from Efficiency Maine
Financed amount: $16,350 (about $108/month)
Savings: Offsets 300 gallons of oil at $3.60/gallon. The ASHP will consume roughly 3,000 kWh in heating, leaving you with an excess 3,125kWh of solar electricity worth $500 at today's prices. Overall you'll have an annual savings of around $1,580.
Bottom line:The solar loan saves you $300 a year!
Note that all expectations of system production can vary widely site-to-site and based on specifics of your project. ReVision Energy presents a science-based system modeling estimates as part of every formal proposal.
How Do I Apply?
You will need a scope of work from an Efficiency Maine registered vendor (such as us!) to start the loan application process. As part of our full-service approach, we'll provide assistance determing the most cost-effective solar project for your home, and provide support throughout the loan process to the finished installation to ensure a seamless renewable energy experience for you. Contact us for a free, no-obligation solar consultation.
Visit: http://www.efficiencymaine.com/at-home/energy-loans/ for general information about the Efficiency Maine loan programs.
Lake Sunapee Bank Home Equity Loan
Lake Sunapee Bank offers a flexible approach to home equity loans that make them ideal for financing solar projects:
- Fixed 4.99% over ten years - close to 'break even' vs. utility rate and then substantial savings when loan is paid off
- Eligibility based on credit score (FICO Score 650+) and equity in home
- No prepayment penalties, and can re-amortized after you've received state and federal incentives for lower monthly payment
- Can use additional value in home generated by solar to count towards equity
Learn more by visiting Lake Sunapee bank directly: https://www.lakesunbank.com/ (click 'mortgage center') or call: (800) 281-5772.
FHA Home Improvement LoansConsists of two parts - a 'step down' loan, and an optional 'piggyback' loan available for qualified homeowners.
Solar Step Down Loan
ReVision Energy customers can now access up to $25,000 in FHA Home Improvement Loans as part of a loan program designed specifically for solar projects. This program is unique in that it allows the homeowner to use post-construction solar tax credits, rebates and/or incentives to pay down and re-amortize their loan at no cost. This can result in lower their monthly payments for the duration of the loan.
Qualifying solar projects may be paired with other general home improvements, including roofing, window, energy efficiency solutions, garages and much more.
Loan terms range from 5-20 years and interest rates range from 4.95-9.95% depending on the creditworthiness of the applicant. A minimum FICO score of 650 is required to qualify. Additional advantages to this loan program include: no equity or appraisal required, no pre-payment penalties, fixed rates, interest and HUD insurance fees may be tax deductible (consult your tax advisor).
Solar Title I Plus I Renewable Energy Loan Program
Qualifying Solar Step Down customers also have the option to borrow up to an additional $15,000 through an exclusive unsecured 'Solar Title I Plus I' loan. This innovative program gives homeowners the ability to borrow up to $40,000 for a single set of home improvements.
This loan is only available as a 'piggy-back' to the $25,000 Solar Step Down Loan described above where the customer requires additional funding for its renewable energy project. The minimum FICO score required to qualify for this additional $15,000 is 700. No interest is owed if the principal balance is paid completely in the first 18 months from the date of funding. The borrower is not required to make installment payments during the first 18 months from the date of funding. This loan is unsecured, meaning that no collateral is required.
A solar energy system proposal is required to start the process of applying for this loan. Sign up for a free, no-obligation solar site evaluation to get started.
Mortgage or Refinancing Loan through your Local Bank
If you are buying a new home or refinancing an existing home mortgage, you may find that you can roll in the cost of a solar array into your financing. By doing so, you can benefit from what are generally excellent interest rates, and save money immediately vs. what you would otherwise pay the utility company. However, this varies bank to bank, and you are responsible for starting the conversation with your bank to explore this avenue. If you need some information to provide to your bank - system economics or ROI information, for example, we'd be happy to assist. Just contact us.
What About Solar Leasing?
Solar leasing products are popular in states with high costs of electricity and generous solar rebates, such as California, Colorado, Massachusetts, and New Jersey. In a solar lease, rather than pay to own your solar panels, you pay no money for your solar installation and instead lease the panels over a term.
No company currently offers solar leasing in Maine or New Hampshire. The availability of state rebates and other incentives plays a large role in enabling companies to afford to finance solar leases. Should a solar leasing product become available in Northern New England, we will be the first to spread the word about the new program.
We also have this article from a Massachusetts homeowner explaining why solar financing (finance to own) was a better financial deal for him than leasing.