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Unsecured solar loans

2016 saw the rise of the independent solar company and a fall in the percentage of the residential solar market dominated by zero-down PPA and Solar Lease products.

The reason for this is that most small independent solar companies now have access to competitive financing offered through finance platforms like Dividend Solar, Greensky, and Mosaic.

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These loans often advertise low rates but what gets hidden from consumers is that there is an origination fee of between 10-15% that is built into the solar system price when you ask for a loan through your solar company. This is why average costs of cash purchased systems are usually $0.40 per watt cheaper than for financed systems.

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Pace solar loans

Residential PACE financing has doubled from $1 billion less than a year ago to more than $2 billion today, according to PACENow, a nonprofit that tracks the PACE market. It is a solar financing option only in areas where:

• There has been legislation passed to support PACE projects; and

• There have been specific projects launched and funded, usually through a partnership between a private financier and a local authority of jurisdiction.

The defining feature of a PACE loan is that the repayments are made through the local authorities property tax assessments over your house and this loan liability goes with the house when it is sold.

The second important point is that enabling legislation for PACE projects usually has provisions to make this finance available to low income earners and people with poor credit. As such this makes the savings of solar and energy efficiency available to more people.

Florida and Southern California were the first to see PACE projects emerge but they are likely to pop up in more and more areas over time.

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