One of the keys to success for residential solar installers has been the various financing methods that have come up over the past few years. A major driver has been in the form of third-party ownership (TPO) options like solar leases and power-purchase agreements (PPAs). But now a small but increasing number of companies are starting to offer another alternative—loans. These loans allow homeowners to own their system outright without still needing to make an expensive upfront investment.
On Oct. 9, OneRoof Energy became the latest company to offer loans as an alternate financing method for installing solar. “Giving homeowners increased choice when considering clean energy will ultimately accelerate the already amazing growth of rooftop solar,” said OneRoof Energy CEO David Field. “Our new loan options are a complementary addition to our signature SolarSelect lease product, which provides an extremely attractive option for homeowners who want to see immediate savings on their monthly utility bills without big upfront costs.”
The company, which serves homeowners in Arizona, California and Hawaii, is offering both secured and unsecured loan options. The secured loan options have up to 20-year repayment times, depending on which option is chosen while the unsecured loans have terms up to 12 years, according to OneRoof. By offering loans as opposed to leases, OneRoof is joining other companies that are making such options available, including Admirals Bank’s Admirals Alternatives and SunPower.
Unlike a lease or PPA, a loan program allows the homeowner to own the PV array from day one. It also allows them to capitalize directly on the federal and state incentive programs, rather than having a TPO company capitalizing on the solar rebates and incentives. Unlike other home improvement loan options, the solar loans carry longer repayment terms. This is more ideal for solar energy, since it continues to pay off over a long period of time.
The growth of the solar industry as the housing market recovers, has allowed these specialized solar loans to become available. As banks and other financiers have watched the stability with which the residential solar market has grown and the relatively few defaults homeowners with solar have experienced, it has helped them understand the value of offering such products. “OneRoof Energy has increased choice through loans in an effort to make the residential solar market even more accessible,” the company said. “Few solar leasing providers are expanding product suites to create equivalent loan offerings for their customers.”