Sponsored content written by: Amy Rooker, Vice President of Operations at Dividend Solar
Residential solar is still in its infancy: to date, less than one percent of single-family households have elected to go solar. Although the percentage is small, residential solar represents one of the fastest growing industries in the US. While historically considered part of the “green” movement, today residential solar’s rapid growth is largely being driven by both attractive economics, fueled by a decline in hard and soft costs, and a new financing option: convenient, attractively-priced solar loans that better allocate the economics of solar through ownership.
Prior to the recent industry pivot towards solar loans, solar leases and Power Purchase Agreements (“PPAs”) had driven industry expansion, allowing homeowners to save money on their utility bill through worry-free third-party ownership (“TPO”). TPO has its limitations, however, because it contemplates a third-party financing company realizing the tax credits and incentives associated with the solar system, often involves yearly escalators that decrease the savings realized by the homeowner over time and can complicate transferability of the system in the event of a home sale.
The increasingly apparent viable economics of solar, combined with homeowner education, have led to the rising momentum of the solar loan. The benefits of solar ownership are many. Analogous to building equity in your home versus paying rent to your landlord, solar loans make going solar an investment – not another monthly expense. With solar loans, solar tax credits and incentives (which include a 30% federal tax credit and any applicable state and local rebates and incentives) are reallocated to the homeowner – where some would argue they more appropriately belong. Moreover, there are no escalators with a solar loan: a homeowner who makes timely payments can expect their monthly payment to be the same or lower for the life of the loan; further, when they use their solar savings to reinvest in their system, the system can pay for itself in as little as four to five year in some markets, generating free electricity thereafter. Finally, solar ownership has been demonstrated to increase home values, making it more valuable upon home sale.
Dividend Solar’s EmpowerLoan
Dividend Solar is a non-bank lender that partners exclusively with quality-driven installers across the US. Our $0-down solar loan product, the EmpowerLoan, is designed to benefit all members of the solar value chain, while furthering the proliferation of clean, renewable energy. To that end, Dividend Solar delivers a simple, all-online application process that takes mere minutes to complete. Once a system is installed, the homeowner can enjoy their own mini-power plants that they own for the life their solar system – 25+ years – while earning significant savings, often from day one.
One area where loans have historically fallen short when compared to TPO: hassle-free maintenance and performance guarantees. But now, innovative financing providers, such as Dividend Solar, are filling the gap by providing comparable worry-free, turnkey warranty and performance guarantees. This allows Dividend Solar to combine all the benefits of TPO – $0-down, energy savings, maintenance and performance guarantees – with the financial upside of solar ownership, fusing the security of a lease with the confidence of ownership.
Advancing solar saves homeowners money, bolsters the economy, helps the environment, creates jobs and modernizes our energy infrastructure. Because solar loans better align interests along the solar value chain, they will be instrumental in propelling the industry forward, allowing more homeowners to realize the full economic benefits of solar ownership. Going solar is not a green, blue or red idea. It is an economic idea. Going solar makes sense, and it makes sense to do it now.