How to Finance a Residential Solar Array

Solar Financing for Homeowners

The perception of solar costs being prohibitively high lingers from the early days of the industry. In actuality, solar equipment has become more efficient and less expensive in the last decade, as it has been adopted by homes, business and utilities across the globe. In addition, solar financing has become readily available for homeowners.

Financing Options Available in New Mexico

The Sunny family lives in Albuquerque and is able to offset 100% of the electricity usage in their home with a solar array. After solar installation, their average electric bill is only $8. The Sunny family chose to finance the system with a solar loan from Nusenda Credit Union. Nusenda used the solar equipment as collateral for the loan and did not place a lien on the Sunny’s home. The family had some cash saved and also a home equity line, but the solar loan allowed them to save these resources for other home improvement projects or for an emergency. The Sunny family, like most of our customers, chose to finance the entire $20,000 cost of their solar array, meaning they had no out of pocket expenses for going solar.

Most solar financing options take into account that going solar means homeowners qualify for a federal tax credit that accounts for 30% of the system cost. As such, the lenders allow consumers to reamortize their loan for a lower monthly payment after they have received the benefit of their tax credit.

The Sunny’s loan with Nusenda has a 15-year term and a fixed 3.69% interest rate. Within 12 months of solar installation, the family claimed the 30% federal tax credit they qualified for by going solar. They chose to put the $6,000 received from the federal government back into their loan and reamortize it so they have a lower monthly payment for the balance of the loan. The Sunny family pays less for their solar loan than they were originally paying to PNM for their electricity bills. Their solar loan can be paid off at the end of the 15-year term or earlier. Once it is paid off, the Sunny family will have free energy for the warranted life of their solar array and beyond.

Busting the Myth that Solar is Expensive

When I interview Affordable Solar job candidates, they often express a preconceived notion that while solar is great for the environment, it is very expensive. When informed that the value proposition described for the Sunny family is typical for most of our customers, the candidates’ responses are always something like, “Wow! Why isn’t everyone going solar?” Of course, I can’t help but agree with that sentiment.

To see if you qualify to go solar with no money out of pocket, please fill out an information form here. You can join thousands of New Mexican homeowners that have benefited from both the reduction of their carbon footprint and the financial savings of solar.

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