Much has been said about the availability of commercial solar financing these days, which is particularly lopsided thanks to the recent moves by Fannie Mae and Freddie Mac to close down residential access to PACE program funding, but there is actually a surprising amount of financing and funding available to the average homeowner as well. Not only are there a ton of government programs available that help you offset the installation costs with tax credits and equipment depreciation, but a variety of direct financing methods have been developed as well.
One of the most common direct solar financing options is choosing to take out a home equity loan. This is the standard option for a homeowner looking for financing, and it has become far more popular now that many loan providers are calculating the value added to the home by the solar panels in the cumulative loan to value ration (CLTV). According to the Appraisal Institute, solar panels add more than $20 to the value of the home for each $1 of annual energy savings.
Another interesting financing model is evolving with peer-to-peer direct unsubsidized loans. Originally known for microloans and whatnot based in online lending communities, these loans have grown to cover a significant chunk of the installation costs. Sometimes the interest rates offered in these microloans are even significantly lower than rates offered by major financial institutions, making them an attractive alternative to begging to big banks for financing.
No matter how you cut it, it is simply getting easier to pay for new energy efficient and renewable improvements to your home or business. Between private and public financing and government grants and tax breaks the average homeowner can expect to cover only half (or much less) of the actual cost of the solar panel system. As the prices of solar panels and the accompanying systems continue to decline installing them on the average home will become increasingly more attractive to homeowners.