Admirals Bank, with whom Focused Energy partnered for residential PV system financing earlier in 2012, has announced a higher project cap starting in September. In addition to the $25,000 available through the bank’s existing program, $15,000 more can be borrowed for solar and efficiency projects. While structured as separate loans, the two are serviced with a single payment.
Also, Admirals unveiled a new “no payments for 12 months” option to enhance its existing Solar Step-Down Program, in which the loan can be re-amortized once in the first two years after the homeowner takes advantage of Federal and State tax credits and other incentives, reducing the monthly payment and increasing the cash flow generated by the PV system.
Financing has become prevalent in deployment of residential PV projects. Often, leases and power purchase agreements are used as vehicles. However, borrowing funds instead provides homeowners with all the benefits of ownership, providing better cash flow over the life of the PV system and avoiding the end-of-lease terms that can significantly undermine any financial benefit: leased systems can be removed, re-leased, or purchased at fair market value, which will likely be a minimum of 20% of initial value even in 20 years. All three of these options entail substantial (and un-quantified) cost to the homeowner.
Furthermore, the solar leasing industry is under scrutiny for possibly inflating the initial value of the leased system to maximize the value of Federal tax credits and depreciation internalized by the leasing company or its investors. A PV system loan, in the form of HELOC, PACE financing, or through a program such as Admirals’, also increases property value and salability of a home.