Storage

What Is the Best Way to Finance Solar Power for Home Improvements?

With all of your past experience with solar energy, how did most of the successful roof-mounted hot water systems get financed? Would the homeowner take out a second loan or refinance his/her home? –Monte L., Middleton, WI

Monte, solar water heating systems (for single family homes) range from $2,500 to $7,500, and many people use home equity accounts or unsecured loans to buy their systems.

Some solar companies finance their systems or partner with local banks or credit unions. Some use their income tax refunds. I financed my solar water heating system when I was already getting a home improvement loan, because if you spread out the payments, the monthly additional loan payments were less than my monthly savings, so I was actually making money!

Now I expect I am going to get a ton of e-mails about the higher cost limit, and yes, these are for typical for systems just heating the hot water tank, and not for larger water use or space heating (hopefully this one line will lessen the e-mail).

Finally, if you refinance your house, your Fannie Mae loan will give you a small interest rate credit for an energy efficiency improvement such as a solar water heating system.

With all the communications I get these days from businesses and homeowners who want solar, I always emphasize that solar water heating, photovoltaics (PV) attic vent fans and outdoor lighting are the absolute most cost-effective uses of solar today.

And I just wonder why more people aren’t doing it.