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.

 

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Scott, founder and president of The Stella Group, Ltd., in Washington, DC, is the Chair of the Steering Committee of the Sustainable Energy Coalition and serves on the Business Council for Sustainable Energy, and The Solar Foundation. The Stella Group, Ltd., a strategic marketing and policy firm for clean distributed energy users and companies using renewable energy, energy efficiency and storage. Sklar is an Adjunct Professor at The George Washington University teaching two unique interdisciplinary courses on sustainable energy, and is an Affiliated Professor of CATIE, the graduate university based in Costa Rica. . On June 19, 2014, Scott Sklar was awarded the prestigious The Charles Greely Abbot Award by the American Solar Energy Society (ASES) and on April 26, 2014 was awarded the Green Patriot Award by George Mason University in Virginia.

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