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  • Buying with Bank Financing

    Has anyone used credit union or bank financing to purchase their solar system? It appears that there are a number of local (San Diego) and national banks that will do solar loans based on credit score. Does anyone have any good or bad experience with such financing?

    Thanks in advance.

    ~Joe

  • #2
    Many have but a very bad idea. If you cannot afford to pay in cash, don't do it.

    For example borrow 25K, 10 year term, 7% interest. For the next 10 years you owe the bank $302 month plus an electric bill on top of that each month.

    Invest the same 25K and in 10 years you more than double your money.
    MSEE, PE

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    • #3
      Originally posted by Sunking View Post
      Many have but a very bad idea. If you cannot afford to pay in cash, don't do it.

      For example borrow 25K, 10 year term, 7% interest. For the next 10 years you owe the bank $302 month plus an electric bill on top of that each month.

      Invest the same 25K and in 10 years you more than double your money.
      Under what assumptions is that derived?
      And if a secured loan what about the interest deduction.
      Further money can be had at about 4% now a days
      NABCEP certified Technical Sales Professional

      [URL="http://www.solarpaneltalk.com/showthread.php?5334-Solar-Off-Grid-Battery-Design"]http://www.solarpaneltalk.com/showth...Battery-Design[/URL]

      [URL]http://www.calculator.net/voltage-drop-calculator.html[/URL] (Voltage drop Calculator among others)

      [URL="http://www.gaisma.com"]www.gaisma.com[/URL]

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      • #4
        Originally posted by Naptown View Post
        Further money can be had at about 4% now a days
        4% on a mortgage with excellent credit, but a panel system?
        MSEE, PE

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        • #5
          Originally posted by Sunking View Post
          4% on a mortgage with excellent credit, but a panel system?
          Depends on how you do it
          Through a vendor unsecured plan on paying a lot more than 4%. These are generally unsecured so interest rates are higher and interest non deductable.
          HELOC money can be had for about that.
          NABCEP certified Technical Sales Professional

          [URL="http://www.solarpaneltalk.com/showthread.php?5334-Solar-Off-Grid-Battery-Design"]http://www.solarpaneltalk.com/showth...Battery-Design[/URL]

          [URL]http://www.calculator.net/voltage-drop-calculator.html[/URL] (Voltage drop Calculator among others)

          [URL="http://www.gaisma.com"]www.gaisma.com[/URL]

          Comment


          • #6
            Originally posted by Naptown View Post
            Depends on how you do it
            Through a vendor unsecured plan on paying a lot more than 4%. These are generally unsecured so interest rates are higher and interest non deductible.
            HELOC money can be had for about that.
            OK same amount and term but 4% works out to $288/month. My point is if you have to borrow payments plus electric bill will be a heck of a lot higher than just current electric billl. For many 2 to 3 times more for 10 years.
            MSEE, PE

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            • #7
              You can get short 1 year no interest loans for the 30% federal and in my case 10% state. If you don't pay off the amount in that year, then the interest is extremely high. You would still have to figure out the other 60%. If you have good credit, then you can get very creative on the other 60%. It really depends on your financial situation.

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              • #8
                Originally posted by Sunking View Post
                OK same amount and term but 4% works out to $288/month. My point is if you have to borrow payments plus electric bill will be a heck of a lot higher than just current electric billl. For many 2 to 3 times more for 10 years.
                Just to be clear: if someone gave you the same amount and term except the payment was $208/mo that would still be a bad deal, right?

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                • #9
                  Originally posted by Ian S View Post
                  Just to be clear: if someone gave you the same amount and term except the payment was $208/mo that would still be a bad deal, right?
                  Would be for me since my electric bill is never above $100/month.
                  MSEE, PE

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                  • #10
                    Financing solar isn't a bad idea at all, but at what rate matters. If you have excellent credit financing @2.9%, why not. If you don't have money and no strong credit, perhaps you just dig another hole for yourself. Don't do it, It is already proven that you are not good at making financial choice....

                    Comment


                    • #11
                      Financing Solar

                      There are a number of loans that specialize in purchase financing. Admirals, EnerBank, Matador, etc. Most have a high credit score requirement and a maximum loan amount of around $60K.

                      Comment


                      • #12
                        Originally posted by joeknowmoney View Post
                        Has anyone used credit union or bank financing to purchase their solar system? It appears that there are a number of local (San Diego) and national banks that will do solar loans based on credit score. Does anyone have any good or bad experience with such financing?

                        Thanks in advance.

                        ~Joe
                        For me, short honest answer to your questions is no.

                        If I may, FWIR, my $.02 on solar financing:

                        I'd respectfully and modestly suggest from a somewhat informed and probably unpopular opinion:

                        At this time, using just about any reasonable and [U]realistic[/U] criteria, most often the long term, levelized cost of electricity on even the most reasonably designed (not oversized) system in San Diego is still more than just plain old buying electricity from SDG & E thus making it, for the most part, cost [U]in[/U]effective at this time.

                        In the past it was financial insanity. Now, for the most part, compared to other ways to save on an electric bill, it's mostly improved to only being a poor first choice among alternatives. A large part of this is due to gross oversizing of solar electric systems.

                        Finance charges and fees from banks only make an already non cost effective system less cost effective.

                        It's a free country - pay your money, take your choice. I'm only suggesting that you walk in with you eyes, brain and opinion open.

                        Bottom line: Until and unless your prepared to run a proper cost analysis to find out if your long term choice makes any financial sense, know that before spending [U]multiples[/U] of $10K on a possibly/likely poor, long term financial choice, it will only become a poorer choice if financing is involved.

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                        • #13
                          With over 5 years of residential solar sales experience...I would agree 110% with the post above this.
                          Very well stated and factual sprinkled with sound opinions.

                          Comment


                          • #14
                            Well stated JPM. If you cannot afford to pay in cash, forget it. Even if you can afford to pay in cash, you are better off investing that money elsewhere. Take a loan and no wonder you are poor.
                            Originally posted by J.P.M. View Post
                            For me, short honest answer to your questions is no.

                            If I may, FWIR, my $.02 on solar financing:

                            I'd respectfully and modestly suggest from a somewhat informed and probably unpopular opinion:

                            At this time, using just about any reasonable and [U]realistic[/U] criteria, most often the long term, levelized cost of electricity on even the most reasonably designed (not oversized) system in San Diego is still more than just plain old buying electricity from SDG & E thus making it, for the most part, cost [U]in[/U]effective at this time.

                            In the past it was financial insanity. Now, for the most part, compared to other ways to save on an electric bill, it's mostly improved to only being a poor first choice among alternatives. A large part of this is due to gross oversizing of solar electric systems.

                            Finance charges and fees from banks only make an already non cost effective system less cost effective.

                            It's a free country - pay your money, take your choice. I'm only suggesting that you walk in with you eyes, brain and opinion open.

                            Bottom line: Until and unless your prepared to run a proper cost analysis to find out if your long term choice makes any financial sense, know that before spending [U]multiples[/U] of $10K on a possibly/likely poor, long term financial choice, it will only become a poorer choice if financing is involved.
                            MSEE, PE

                            Comment


                            • #15
                              Originally posted by J.P.M. View Post
                              Now, for the most part, compared to other ways to save on an electric bill, it's mostly improved to only being a poor first choice among alternatives. A large part of this is due to gross oversizing of solar electric systems.
                              I'm not even sure what this means. What constitutes a "poor first choice among alternatives?" Still a first choice I guess and still saving on an electric bill. What's not to like? I'm assuming of course that, however you finance, your total monthly cost after solar is less than before. Are you saying that's no longer possible in San Diego even if you don't oversize?

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