AFFORDABLE ENERGY CONCEPTS’ FINANCING OPTIONS
A solar system installed by AEC will have a typical life span of over 30 years.
A couple things to keep in mind:
- The average cost per kwh over a 25 year period to buy power from the utility is projected to be .2633 cents.
- The average American home uses 11,000 kwh of electricity, that means the average annual electricy bill at .2633 cents is $2,896.30. Thats $72,407.50 over the next 25 years.
- The average cost per kwh to go solar with upfront payment and tax credit in 2020 is .0703 cents.
- Goimg solar means you are spending on average $773.30 a year on electricty for the next 25 years. Over the next 25 years, thats $19,332.00, a savings of more than $50,000 dollars over the next 25 years when compared to the utility rate.
With these two things in mind, the upfront expense is still a deterrent to going solar and there are a lot of gimmicky finance options offered by others that don’t give you all the details or mislead you into making a bad financial decision.
That’s why, we have put together several finance options depending on your needs that will allow you to make a good financial decision that will allow you to go solar and enjoy the tax benefits while they are still available.
All options have their pros and cons and we are glad to discuss them with you in detail to insure you have all the facts. Please call us or email us to set up a time to talk.
Option 1: Home Equity Line of Credit From Local Credit Unio
20 Year Fixed Rate @4.99%
- Cost per kwh over 25 year period on average before tax credit is $.15 and after tax $.11
- Must complete credit application but credit is not a driving factor.
- Can only finance up to 100% of the value of your home minus what principle is left on mortgage. Your Home is used as Collateral to secure this loan.
- Variable rate available @3.50% and can be amortized over 20 years to keep cash flow.
- Keep Tax Credit or can be used to pay down principle. The fixed rate will not change payment amount if tax credit is not used as a downpayment before loan closing.
- Low Closing Fees
Option 2: Home Refinance Option through Solar One Financial
- Loan term ranges from 15 – 30 years. Picked by customer
- Low Interest Rates ranging from 3.5% – 5.125%
- Poor Credit can be approved. Minimum credit score is 500
- Can finance up to 120% of the value of your home minus what principle is left on mortgage. Your home is the Collateral to secure this loan.
- Keep Tax Credit. The fixed rate will not change payment amount if tax credit is used as a downpayment.
- Closing Fee is typical around 2,000.00 but is financed into the refinance.
Sample Monthly Savings:
- 23 years left on mortgage
- Current interest rate of 4.5%
- Current Mortgage Payment $1317.38
- Principle balance left on mortgage 226,735.00
- Home Appraised Value $260,000.00
- Average Monthly Electricity Bill that will be offset by Solar: $145.00
- Monthly expense for mortgage and electric bill: $1,462.38
- Solar Cost before tax credit with closing cost: $33,635.00
- Total Amount Refinanced @3.75% for 23 years: $260,370.00
- New Monthly Payment: $1,409.35
- Instant Monthly Savings: 53.03
- You keep the tax credit of $8,225.10
Option 3: Solar Loan with No Collateral
- 10 year fixed rate @ 4.25%, 15 year fixed rate @ 5.49% and a 20 year fixed rate @5.99%
- Cost per kwh over 25 year period after tax credit on average is $.097 for 10 year loan, $.116 for 15 year loan, and $.136 for 20 year loan. This includes closing fee.
- Must complete credit application and have a minimum score of 650 and minimum Debt to income ratio of 55%.
- 18 months 0% interest on the amount of the tax credit so you can use it as a downpayment. It is not required but if it is not used then that amount rolls over to the loan and increases the payment.
- Closing fee is 10-12% of cost of solar depending on term of loan