solar financinga history of solar financing _____ 2010 national, vertically integrated solar...

Installer’s Guide to

Solar Financing

Seven Things to Know

… about financing residential solar systems

DECEMBER 2016

eBooks

Copyright © CivicSolar, Inc. 2

Table of Contents

______________________________________________

Introduction: How to use this eBook .............................................. 3

1) A History of Solar Financing ..................................................... 4

2) The Competition ........................................................................ 7

3) The Solar ROI ......................................................................... 13

4) Understanding Customer Needs and Preferences ................ 19

5) Solar Financing Options .......................................................... 25

6) Selecting a Financing Partner ................................................. 38

7) Peace of Mind for Customers ................................................. 41

Conclusion .................................................................................. 44

Appendix: Solar Financing Providers .......................................... 45


Introduction

____________________________________________________________________________

As the leading solar equipment distributor servicing independent

solar installers throughout the U.S., we are proud to support

thousands of contractors building solar PV installation businesses

by providing them with technical, product, and design related

information and services.

Since 2009, we have seen the world of solar financing evolve in

many ways and remain a critical area where we have received

many questions and requests.

Our goal with this guide is to provide you the necessary

knowledge about the rapidly developing solar project financing

options for your business and customers. This is by no means an

exhaustive guide, but covers the basics of evaluating and offering

various solar financing solutions with the goal of helping you

increase your success rate when selling solar solutions.

Please note, we love feedback! If you have any suggestions for

improvement to the next edition of this eBook, please email us at

[email protected].


01 A History of

Solar

Financing


A History of Solar Financing

____________________________________________________________________________

2010 National, vertically integrated solar developers (e.g.

SolarCity, SunPower, Vivint, SunEdison, SunRun, Sungevity, etc.)

rapidly increased their market shares. This was a result of a new

type of financial product: the Third-Party-Owned (TPO) solar

model, or, as they are known to home and property owners, solar

leases and solar Power Purchase Agreements (PPAs).

While these TPO solutions provided the average home and

property owner a worry-free way of investing in solar, they failed

to provide full transparency (for home and property owners) or the

level playing field necessary for the thousands of independent

competing installers to succeed. As a result, independent

installers who did not have access to TPO solutions were forced

to contend by selling customer-owned solar solutions for which

there were limited financing solutions.

2012 Customer-owned financing solutions, such as solar specific

loan products and TPO solutions for independent installers,

began entering the market and leveling the field for competition.

Soon after, innovative financing solutions such as Property

Assessed Clean Energy (PACE) entered the market and provided

an increased number of choices for property owners.

2015 - 2016 For the first time in years, TPO solutions began

losing market share to customer-owned solutions. This shift was


caused by the entry of structured capital into the market along

with increased consumer knowledge of the benefits of investing in

solar.

Now, as we prepare for 2017, we agree with industry analysts

who expect a continued decrease in the share of TPO solutions

as customer-owned solutions become more competitive (seen in

the graph below). In this environment, it is critical for independent

solar installers to understand and be able to communicate the

pros and cons of each type of solar financing solution to potential

customers.

In the next chapter we will discuss the competition in more detail

and show you how to offer potential solar customers financing

options that provide them with full confidence in their investment.


02 The Competition


The Competition

______________________________________________________________________

Choosing to own in a lease dominated market

In today’s digital world, customers have access to more

information than ever before. This means, they will often conduct

independent research online before consulting a solar

professional. For this reason, it is critical to:

understand what competitors are offering

be comfortable leading with the appropriate financing

solution and

be able to clearly explain the advantages of the solution

being offered versus larger, more-established competition.

We categorize the various solar players into three major classes:

1. National, vertically integrated solar developers. There are

less than a dozen of such companies, but they make up

close to 40% of the market today.

Examples include: SolarCity, SunPower, Vivint, SunRun, etc.

2. Independent local and regional dealers who offer both the

TPO solutions from the class one national companies along

with their own cash or financed solutions.

3. Independent local and regional installers with no allegiance.


If you belong to group 3, and find yourself competing with a

company from group 1, it is fair to assume that your competition is

offering at least one standard lease or PPA option. Though this is

how the large public companies (i.e. SolarCity, SunRun,

SunPower) are generating the majority of their sales, it has the

worst long-term ROI for solar customers.

Though ownership is not the best fit for everyone, many potential

customers simply don’t know their options when it comes to

making this large of an investment. Being able to articulate these

benefits will not only support your customers in making the

decision that is best for them but will allow you to become even

more of an expert on the market.

A. The Benefits of Ownership

Usually, investing in a solar system provides a much higher return

on investment than any leasing program could provide. Here are

seven reasons customers will benefit from investing in a solar

system that can be used to start the financing conversation.

1) Lease or PPA solutions may save up to 30% of a customer’s

electric bill over the next 20 years. Purchasing the system

can provide the customer savings up to 80%.

2) Leasing forces the solar customer to forfeit the 30% Federal

Investment Tax Credit (and other incentives they might

qualify for) to the lease company.


3) Annual payments increase over time with a lease or PPA

based solution, while they will not change if the system is

owned.

4) With a lease or PPA solution, customers are forced to either

buy the system at market price, extend their lease contract

or return the system at the end of the contract.

5) Ownership of a solar system immediately increases the

value of a home. A solar lease does not. Moreover,

transferring can be a hassle if the home is sold.

6) Similar to the lease, solar-specific loans allow customers to

go solar with zero down and start saving money on day one.

Plus, annual payments will not go up.

7) Solar systems have no moving parts and last for a long time

with no maintenance. Most systems today are sold with a full

25-year warranty on equipment. Lease companies often try

to scare customers into leasing a system by saying that they

will be there to fix the system if it breaks, even though the

likelihood of a system breaking is very low.

Shifting the conversation from leasing options towards customer-

owned options requires a much larger commitment on behalf of

the customer. They will likely need to consider all of their options

and reevaluate their financial security before making their

decision. As an expert on all financing options you will be able to

ensure your customers find the best solution for their needs, while

you earn their trust and, most likely, their business.


B. Determining if Ownership is the Right Fit

Part of gaining the trust of customers is being honest and realistic

about their assets. Though a cash purchase often results in the

highest ROI for customers, the level of investment required may

not always be feasible. Here are three reasons that a cash

investment would not be the best choice for your customer and

the alternatives that can be offered:

Problem: The customer simply does not have cash to invest

upfront.

Solution: A loan or PACE product.

Problem: The customer has the cash but does not have enough

of a tax obligation to use the 30% Federal Investment Tax Credit

(ITC) and/or other rebates and incentives.

Solution: Pre-paid PPA/lease product.

Problem: The customer does not have the cash and does not

want to undertake the risk of owning and maintaining a system.

Solution: A regular lease or PPA product.

Once you understand the unique needs of your customers, you

can present them with a financing solution that will give them the

highest return on their investment (ROI). In the next chapter, we

will discuss exactly what an ROI is in terms of investing in solar


and how you can ensure your customers receive the highest one

possible.


03 The Solar ROI


The Solar ROI

____________________________________________________________________________

We have found that the most productive residential solar sales

professionals all have one thing in common; they separate the

“cost of solar” conversation from the “financing of solar”

conversation. Simultaneously, installers who can clearly

communicate the ROI of their solar solutions outperform their

competitors. This is why we decided to dedicate a section to

explaining the concept of the Solar ROI.

Return on Investment (ROI): The “return” over your “investment”

or the gain or loss generated on an investment relative to the

amount of money that was invested.

For example, $400,000 is invested in a home that will be rented

out on a monthly basis. After expenses, $2,500 is earned in

monthly income. Meaning that the investment (I) is $400,000 and

the first year return (R) is $2,500 a month for 12 months, totaling

$30,000. To calculate the ROI, divide the return (R) by the

Investment (I) and multiply by 100 to find the percentage increase

or decrease.

ROI = Return / Investment => ($30,000 / $400,000)*100 = 7.5%


An Example of Solar ROI

Let’s look at ROI in the context of a solar PV system. As seen in

the graph below, the average size of a solar system in the U.S. is

5,000 Watts (approximately 20 250-watt panels), at a cost of

about $3.50 per watt. This is just an average, however, and the

graph below shows just how much this price ranges across the

U.S.

Assuming that the cost per watt is $3.50, your customer’s

“investment” will be:

$3.50 per watt x 5,000 watts = $17,500.


Next, we include the “30% Federal Investment Tax Credit”

deduction which can be applied to all solar PV investments until

2020.

30% * $17,500 = $5,250

Technically this would adjust your customer’s investment amount

from $17,500 down to $12,250.

Next, calculate the “return.” The return is the value that the solar

system provides to your customer. In most states, net metering

policies allow solar system owners to receive credit for the full

retail value of the electricity they generate and feed back into the

grid. To calculate the value of this generated electricity, we need

to know two things:

1) How much electricity does the solar system create?

2) How much is the electricity worth?

The ROI is calculated by multiplying (1) with (2).

Here is how to answer these questions to find the ROI.

1) How much electricity will your customer’s solar system

generate?

This depends on the location of the project. Since this number

can vary so much, we recommend partnering with your CivicSolar

account manager to use a location-specific design tool to give you

the most accurate calculation. We do know however that the

average U.S. solar system generates about 1,450 kWh per kW in

a year so we will use this number in our practice equations.


2) How much is your customer’s electricity worth?

The average value of electricity for U.S. homeowners is 12 cents

per kWh. However, this number can be as high as 50 cents in

some parts of the country and as low as 6 cents in others. For our

calculations, we will assume consumers are paying an average of

25 cents per kWh for electricity when they make the decision to

invest in solar for their home.

...

Now let’s apply these estimates using the ROI formula. Assuming

the value of electricity generated is 25 cents, and the system

generates 1450 kWh per kW, the year one return will be:

5 kW x 1450 kwh / kw / yr x $0.25 = $1,813.

This means, the customer’s return on investment equation will be:

Solar ROI = Return / Investment => $1,813 / $12,250 = 14.8%

The year one return of 14.8% equals a payback period of

approximately 6.75 years. In today’s market, this is a high quality

investment!

When it comes to investing in solar, an ROI of 10% or higher is

one that should provide confidence to you and your customers.

Any lower and it may be necessary to look into alternative

financing options such as community solar or energy efficiency

improvements only.


Once your customer understands the specific investment amount

required and the return it will generate, it will become much easier

to explore their options. However, the concept of ROI does not

take into account the unique circumstances and concerns

presented by each customer. In the next chapter, we will discuss

some of these details that need to be taken into account when

investing in solar.


04 Understanding

Customer Needs

and Preferences


Understanding Customer Needs and Preferences

______________________________________________________________________

When selling solar solutions, it is important to understand the

specific needs and preferences of each customer. This is

because the best solution for a customer with limited income, a

decent credit score and no tax obligation will differ dramatically

from a customer who has plenty of cash and a high tax obligation.

Similarly, the solution for a customer who enjoys doing things

himself and wants to understand and maintain their solar system

will be quite different from the one for a single parent who has

limited time, cash, and willingness to own and maintain a system.

For these reasons, we think it is important to explore the following

needs and preferences of customers before deciding which

investment approach will be best for them:

1) System Maintenance

Unlike investing in the stock market, a solar system is a hardware

purchase that may require maintenance over its lifetime. When

designing systems for your customers, it is important to ensure

they understand that a typical solar PV system consists of non-

moving parts that are expected to last for over 20 years. Up-front

requirements such as a quality roof are necessary for a


successful project while long-term needs such as changing an

inverter might also be required. You can help your customers

achieve peace of mind by understanding their ability to maintain

the system over its lifetime and finding the best financing

solutions for their unique needs.

Leasing/PPA solutions inherently offer that peace of mind by

removing the homeowner from all ongoing PV system

responsibilities and securing a long-term electricity price

agreement. However, Lease/PPA solutions are not always the

most economical for customers because of the 20-year long

recurring interest payments. An alternative solution may be a

warranty from the vendor which we will discuss more in

Chapter 7.

2. Access to the 30% ITC and other tax deductions

In order for a customer to take advantage of these tax benefits,

they must have a tax obligation that is equal to or greater than the

tax benefits derived from the solar system. Many unsecured solar

loan products are designed to capture the homeowner’s ITC

payment and pay down the solar loan. However, if the

homeowner chooses not to use the ITC to pay down 30% of their

loan within 18 months, they may be charged higher interest rates.

A secured or PACE loan will allow for additional tax deductions

from the interest payments (and in some cases, even the principal

payments) over the tenor of the loan.


3. Credit Score

If a customer has applied for an unsecured loan or a lease/PPA

solution, a credit (FICO) score of 650 or higher will most likely be

required for them to qualify. If this is not something your customer

can achieve, a PACE loan, which is based on their property value,

may be a better fit and provide a lower interest rate. We will

discuss PACE loans in detail in Chapter 5.

4. Ability and willingness to refinance mortgage or home

equity lines

In many cases, financing the solar system within a mortgage or a

home equity loan is the most economical. This solution makes

sense when the customer is already planning to refinance.

However, refinancing or getting a new home equity line can

require a substantial time investment and extra upfront costs

which can impact the long-term return on investment.

5. Using their home as loan collateral

Home mortgages, equity lines and FHA Title 1 Loans are secured

loans where the collateral is the equity of the home. Secured

loans typically have lower interest rates compared to unsecured

loans but risk losing the home if the loan defaults. In the case of

an unsecured loan however, the lender would only be able to


claim the solar system. Taking out a secured loan is worth the risk

when the homeowner is confident in their ability to make the

payments in the future. However, customers should always

consider worst case scenarios when making this kind of decision.

6. Likelihood of Moving

If a solar homeowner moves, they may be required to pay-down

the remaining portion of their solar loan/lease. This requires hiring

an expensive third party certifier to assess the value of the solar

system. Due to the lack of data about solar system transferability,

it is impossible to make a definitive valuation. Homeowners

should discuss this issue with their bank and/or realtors. If they

have serious reservations about the transferability of their system,

a PACE loan may be their best option.

7. Future Financial Obligations

Investing in a solar system is a significant and long-term decision.

If the customer is planning to take on other large liabilities in the

future - such as student loans, a second home, starting a

business, etc. - a PACE loan may be the best option. This is

because it will not affect their personal credit and will offer lower

interest rates. In the case that the homeowner has a low credit

score, PACE loans may also be their only financing option.


8. Cash on hand

Generally, secured loans and home equity lines have much lower

interest rates than unsecured loans and PACE loans. However,

they may require a significant down-payment. If the homeowner

wants to finance 100% of the system, unsecured loans and PACE

loans are generally the best option.

Understanding customer preferences around these topics will

bring you one step closer to choosing the solar investment option

that is best for your customers. In the next chapter, we will outline

these options in more detail.


05 Solar

Financing

Options


Solar Financing Options

______________________________________________________________________

There are two primary approaches customers can use when

investing in a solar system 1. upfront investment or 2. leasing.

Each has advantages and disadvantages that change according

to your customer’s unique needs. In this chapter, we will outline

when it makes the most sense to use each approach and what

you can expect during the process.

Solar Financing Map for Residential Solar Systems

Source: CivicSolar, Inc.


The solar financing map above is a great resource when making

these decisions. Taking into account the unique needs addressed

in the previous chapter, you can assess which financing option

you think is best for each customer. In this chapter, we will

explore these options in more detail.

1) OWNERSHIP-BASED SOLUTIONS

As discussed in earlier chapters, making the decision to own,

rather than lease, a solar system will produce the highest ROI.

However, this level of investment will not be a good fit for

everyone. We suggest ownership-based solutions when the

customer:

Wants to maximize their ROI over the long term

Wants to leverage the various rebates and incentives

associated with the solar system

Is confident in their ability to own and maintain the system

If ownership is determined to be a good fit, there are four ways to

finance the purchase:

1) Cash

2) Secured Loans

3) Unsecured Loans

4) PACE Loans


1) Cash

As with many things in life, paying cash to outright purchase the

system is the most economical way of owning solar PV. Plus,

paying cash allows a system owner to avoid paying interest and

other financing fees.

2) Secured Loans

The most common secured loans are Home Equity Loans, FHA

Title 1 Loans, and Mortgage Loans. Industry insiders often say

that one of the best ways to finance solar is within your mortgage

(or home equity line). These types of loans are attractive for

customers because they have low interest rates and the interest

payments are tax deductible.

The key advantage of these types of loans is that they allow your

customers to pay a lower interest rate compared to unsecured

loans. That being said, there are still some disadvantages of

these loans.

Disadvantages of Secured Loans

First, because they are secured loans, if one fails to pay their

monthly payments the bank would have the right to foreclose

on their home. Second, these types of loans usually require

more paperwork and time for approval compared to unsecured

loans.


It is also worthwhile to note that not all mortgage underwriters

and secured lenders offer solar financing. This is because it is

still a new industry and uncertainty still exists. Since solar

financing would likely make up a small percentage of the

lender’s portfolio, there is not a significant demand for lenders

to efficiently finance solar projects.

3) Unsecured Loans

Unsecured loans are also a common way of financing solar

solutions. They have recently become more accessible because

of the increased demand in solar ownership. These types of loans

are popular because they are fast, easy to get approved and do

not require any cash up-front. In fact, the leading unsecured

lending providers have technology platforms that allow the

homeowner to be approved and receive funding almost instantly.

If done through one of these providers, the entire approval and

funding process can be paperless and supported by a dedicated

customer service team who can answer all homeowner and

contractor questions. The homeowner's approval and interest for

an unsecured loan will depend on factors such as their FICO and

Debt to Income ratio.

Something important to consider when deciding which loan is best

for your customer is the risk of losing their home. If unsecured

solar loans are defaulted on, there is not the risk of losing their


home. There is however the risk of losing the solar system. The

main disadvantages to unsecured solar loans are as follows:

Higher interest rates than secured loans

High origination fees (A.K.A. dealer or merchant fees)

Interest payments are not tax deductible

4 Things to Consider when Comparing Unsecured Loans

When comparing unsecured loan products, the solar contractors

should compare and factor in the following:

i) APR

The APR is the total, including all fees and annual interest

rate. FICO scores and the terms determine the APR and

solar APRs generally range from 3% to 9%. A longer term

and lower FICO score indicate higher risk which will raise the

APR. An 18 Month Interest Only product is very popular, but

the homeowner must be able to exercise the 30% ITC within

the first 18 months to maintain a low APR.

In states like California and New York, where the utility rates

are high, this loan product allows for homeowners to start

saving on their solar projects from day one.


ii) Dealer Fees

This is the processing fee for the loan that the contractor

burdens and is similar to a car loan or mortgage. The dealer

fee will depend on the APR, the customer’s FICO score and

the individual provider’s terms. The lower the FICO score

and APR, the higher the dealer fee. Dealer fees range from

15% to 20% of the cost of the solar system for most solar

loans. The dealer fee can be financed with the loan, so the

installer can pass the cost on to the customer.

iii) Terms

The terms are the duration for a solar loan, or how many

years until the principal is paid off. Common offerings are 5,

10, 12, 15, and 20 years. The longer the terms, the higher

the interest rate. A 20 year loan can almost double the

interest rate compared to a 5 year loan, but the annual

payments will be lower because of the longer duration of the

loan.

iv) Prepayment Penalties

Unsecured solar loans will not usually have a prepayment

penalty, but this will need to be verified.


Some of the leading providers of unsecured solar loans are:

GreenSky, Mosaic, Admirals Bank, and Dividend Solar.

Authorized contractors are only allowed to offer unsecured

loans as homeowners are not able to be approved for this

type of financing directly from the provider. Contractor

approval criteria varies.

At a minimum, these businesses need to have operated for

2 years and be in good standing. Some financing providers

will require North American Board of Certified Energy

Professionals (NABCEP) certified installers and have an

approved equipment list. Generally, the total loan approval

for an unsecured loan will be around $50,000 (some go as

high as $100,000), but this should be sufficient for most

residential projects ($3.50/W install cost).

4) PACE Loans

PACE is an innovative way of financing energy efficiency and

renewable energy projects. To have access to PACE financing,

the local county or municipal government must have established a

PACE program in their district.

What makes the PACE loan unique is that it is taken by the home

(or property) rather than the individual (i.e. the property owner).

The payments for PACE loans are secured against the property


and paid via the tax bill of the property (one payment per year

rather).

Similar to taxes, if they are not paid, the local government would

have recourse on the customer’s home, preventing them from

selling it.

To qualify for a PACE loan, the homeowner must be up-to-date

on their mortgage and tax payments. Leading PACE providers

like Ygrene have online tools to see if a property qualifies for a

PACE loan and can estimate the total loan amount the

homeowner could be issued.

Like Unsecured Loans, PACE providers have fast and paperless

approval and funding processes. Homeowners must have a pre-

approved contractor install their solar system. The total loan

amount is usually limited to 15% of the property’s value.

Pros of PACE

One key advantage of the PACE loan is that it is an off-balance

sheet item or tax lien. This means the solar loan will not affect the

homeowner’s credit, ability to borrow, or mortgage. This is very

important because getting a PACE loan will not only lower a

customer’s energy bills but also have no effect on current or

future personal financing decisions. Since the PACE loan is a tax

lien on the property, transferring the solar loan is easy because it

is not necessary for the homeowner to pay-down the loan’s


remaining balance. What’s more, the PACE loan is not tied to the

homeowner.

While the process for transferring leased or financed solar

systems is still ambiguous, PACE removes such concerns. PACE

loans are not just for solar projects but also for energy efficiency

upgrades and/or other clean energy projects.

Like unsecured loans, PACE loans can finance 100% of the

project (no down-payment necessary). PACE loan terms will

range from 5-20 years and the interest rate will depend on the

term (5% to 8%). The longer the term, the higher the interest rate.

The interest rates on PACE loans are generally higher (and there

are prepayment penalties) than unsecured loans, but the

origination fee is lower and is tax deductible.

Leading providers of PACE Loans are: Ygrene, Hero,

CaliforniaFirst, and mPower. You can see a complete list of all

PACE providers for all U.S. states here.

Below is a table that summarizes the attributes of secured,

unsecured and PACE loans:


Solar Ownership Products

Financing Type

APR Dealer Fee

Terms

(Years) Prepayment Penalty

Technology / Support

Tax Deductible Interest

Off-Balance Sheet

Secured Loan

<5% <2% 5-30 Yes Minimal resources

Yes No

Unsecured Loan

3-10%

10-15%

5-20 No Sales Tools; Approval and Funding tools; Paperless Process; Excellent customer support

No No

PACE Loan

5-8%

3-7% 5-20 Yes Sales Tools; Approval and Funding tools; Paperless Process; Excellent customer support

Yes Yes

2) THIRD-PARTY-OWNED (TPO) SOLUTIONS:

When paying cash upfront for a solar system is not an option,

lease and PPA solutions are the next best solution. TPO solutions

(Leases / PPAs) make sense for customers who:

Do not want to own and maintain the system


Are interested in going solar mostly for the environmental

reasons

Are interested in saving money immediately with zero down

and are OK with not maximizing their ROI in the long term

Cannot use the 30% Federal Investment Tax Credit

When considering leasing a system or signing a PPA, it is

important to understand the differences between a lease and a

PPA.

When leasing a system, contracts are usually written for 20-years

and covered by monthly fees that typically come out to be 10-30%

less than their average monthly electric bill. The lease provider

will often provide a minimum production guarantee in terms of

kWh production and be responsible for maintaining the solar

system.

1) Power Purchase Agreements

PPAs are slightly different from leases because the customer

agrees to purchase the electricity that the system generates at a

predetermined price, on a take or pay basis rather than month to

month. This often means that the customer’s monthly payments

vary slightly based on the production of the system.

2) PrePaid PPAs and Leases

There is also a class of PPAs and Leases called Prepaid PPAs

and leases. These offerings make sense for customers who have


the upfront cash but do not want to own and maintain a system

and are not interested in the tax rebates and benefits. Just like in

the case of regular leases and PPAs, when your customer signs a

Prepaid Lease or a Prepaid PPA the financing company benefits

from the tax incentives. These financing companies also have the

ability to take advantage of accelerated depreciation benefits

(something that homeowners cannot do).

For example, providers can still offer the customer a 20-year

lease deal at a price that equals the cash price of the system

minus 15-30%. At the end of the 20-year period, the customer has

the option to acquire the asset at the current market value. Pre-

paid PPAs and Leases also make a lot of sense when a customer

is a non-profit entity such as a church, YMCA, United Way or an

animal shelter.

As we have covered in this chapter, there are numerous options

to consider when looking to finance solar systems. Depending on

the specific situation of your customer, some solutions may be

better than others. As always, you can refer to the graph on page

26 as a decision making guide for specific customer cases, but

your account manager is also a good resource!

Once you make a decision, it will be time to include a finance

professional in the conversation. The next chapter outlines some

questions that will give both you and your customers peace of

mind when selecting a financial partner.


06 Selecting

a Financing

Partner


Selecting a Financing Partner

______________________________________________________________________

With more than 150 financing offerings on the market today,

finding the right partner is a critical step in offering a

comprehensive financing proposal. Don’t be afraid to vet

companies against each other when presenting options to

customers as their business should be as dependent on your

happiness and yours is dependent on the happiness of your

customers.

Here are the 14 most important questions to have answered when

selecting your financing partners:

1) What is the reputation of the company?

2) How long have they been in business?

3) How stringent are their installer qualification criteria?

4) How efficient are their on-boarding and training processes?

5) How responsive are their account managers?

6) How competitive are their pricing and interest rates?

7) What are their payment schedules like?

8) How long are the tenors of their loans and leases/PPAs?

9) Do they have a technology platform that facilitates customer

application and loan approval process?


10) How quickly do they approve or deny a customer’s loan

application?

11) What are their requirements for contractors to become

authorized dealers?

12) What restrictions are there for projects (either equipment or

homeowner qualifications)?

13) How does their funding process work? How quickly do they

fund projects, do they allow staged funding, and what do they

require to complete projects (and make final disbursement)?

14) Do they market to homeowners? How much marketing

collateral or sales support do they offer?

Answering these questions will give you a better idea of whether

or not the partnership will be mutually beneficial and ensures that

you, and your customers, can be confident in the investment.


07 Achieving

Peace of Mind


Achieving Peace of Mind

______________________________________________________________________

The Importance of Warranties

Regardless of which financing option you choose, customers may

have remaining concerns about the long-term commitment of

investing in a solar system.

Some common questions we hear from home and property

owners include:

“What if my solar PV system does not work as it is supposed

to?”

“What if my panels or inverters break after a few years?”

“How do I know that my installer is not going to drill holes on

my roof that will cause leakage when it rains?”

Warranties can appease some of this uneasiness.

If you are purchasing your equipment through CivicSolar, it will

likely already include 20+ years of manufacturer warranties. The

challenge however, is guaranteeing the integrity of the entire

system over its lifetime. This can include ensuring how much

energy the system will produce or issues such as roof leaks,

electrical tripping, etc.


One solution we recommend is to offer your own warranty

contracts along with the standard engineering, procurement and

construction (EPC) contracts. If you are uncomfortable writing

your own warranty contracts, CivicSolar offers a comprehensive

“Solar Customer Warranty Management Service” for our partners.

If this sounds like a good fit for you, your Account Manager can

provide more information.


Conclusion

______________________________________________________________________

Thank you for taking the time to read this eBook! We hope it has

answered some of the difficult questions surrounding solar

financing. The bottom line is that there is not one perfect financing

solution, but many. By working to understand each of them, you

will be able to confidently answer the questions presented by your

customers and stay on the cutting edge of the increasingly

competitive solar industry.

We hope that you feel even more prepared to evaluate various

financing solutions for your solar business. If you have any

additional questions, we are here to help and look forward to

being a part of your continued success!

- The CivicSolar Team


Appendix: Solar Financing Providers

______________________________________________________________________

Unsecured Solar Loan Providers

Admiral’s Bank* All 50 States

Bank Five MA, RI

Banner Bank WA

BGE Home MD

Center for Energy and The Environment MN

City and County of Honolulu HI

City of Milwaukee WI

City of Plano TX

City of Richland WA

City of Tallahassee Utilities FL

Clark Public Utilities WA

CT Green Bank CT

Dividend Solar All 50 States

Educational Employees Credit Union CA

Elevations Credit Union CO

EnerBank USA All 50 States

First Associates All 50 States

First Citizens’ Federal Credit Union MA

First New York Federal Credit Union NY

Fort Collins Utilities CO

GreenSky Credit* All 50 States

Greenworks Lending CT, DC, MD

Hamilton County OH

Home Loan Investment Bank All 50 States

LightStream – SunTrust All 50 States

https://www.admiralsbank.com/renewable-energy-lending/loan-programs/solar-step-down

http://www.bankfive.com/home/misc/solar_loans

https://www.bannerbank.com/

https://www.bgehome.com/solar-panels.php

https://www.mncee.org/find-financing-incentives/solar-financing/

http://www.honolulu.gov/cms-dcs-menu/site-dcs-sitearticles/1852-cad-solar-loan.html

http://city.milwaukee.gov/MilwaukeeShines/Get-Solar/Solar-Financing.htm#.VzTJn_krLIU

http://www.plano.gov/1378/Smart-Energy-Loan-Program

http://www.ci.richland.wa.us/departments/energy-services/solar-power-and-net-metering

https://www.talgov.com/you/you-products-home-loans.aspx

https://www.clarkpublicutilities.com/residential-customers/reduce-energy-waste-and-lower-your-bill/all-rebates-incentives-and-low-interest-loans/solar-energy-program/solar-loan-program/

http://www.ctgreenbank.com/

https://www.dividendsolar.com/whysolar

http://www.myeecu.org/home/products/loans-credit-cards/personal

https://www.elevationscu.com/energyloans/home-loans

http://enerbank.com/

http://1stassociates.com/assets/solar/

https://www.firstcitizens.org/loans/personal/mortgage

http://www.firstnewyork.org/home/borrow/solar

http://www.fcgov.com/utilities/residential/renewables

http://www.greenskycredit.com/

http://www.greenworkslending.com/

http://www.hamilton-co.org/hc/hc_hip.asp

http://www.homeloanbank.com/NewsPage.aspx?name=385031+Solar+panels%3A+A%C2%A0home+improvement+project+that+pays+for+itself

http://www.lightstream.com/


Idaho Governor’s OER Energy

Loan Program ID

Iowa Energy Center IA

Matador’s Community Credit Union CA

Michigan Saves MI

Montana Dept. of Environmental Quality MT

Mosaic* CA

National Bank of Arizona AZ

Nebraska Energy Office NE

North Brookfield Savings Bank MA

Oregon Dept. of Energy OR

PSE&G Solar Loan Program NJ

Piedmont Electric Membership Corporation NC

Provident Credit Union All 50 States

Puget Sound Cooperative Credit Union WA

Redwood Credit Union CA

SF Fire Credit Union CA

San Antonio Credit Union TX

San Diego Metropolitan Credit Union CA

Santee Cooper SC

Shrewsburry Federal Credit Union MA

Spruce Finance All 50 States

St. Lucie County Florida FL

Summit Credit Union All 50 States

Sun West All 50 States

Sungage CA, CO, CT, FT, MD, MA,

NH, NJ, NY, TX, VT

UmassFive College Federal Credit Union MA

Umpqa Banku NV, OR

University of Virginia Credit Union VA

Velocity Credit Union TX

Weymouth Bank MA

http://energy.idaho.gov/financialassistance/energyloans.htm


http://www.iowaenergycenter.org/alternate-energy-revolving-loan-program-aerlp/

https://matadors.org/loans/solar.html

http://michigansaves.org/

http://deq.mt.gov/Energy/EnergizeMT/Renewable/altenergyloan

https://joinmosaic.com/solar-financing

https://www.nbarizona.com/Specialty-Green-Returns.jsp?popup=popup-home-energy.html

http://www.neo.ne.gov/loan/index.html#typical

http://www.northbrookfieldsavingsbank.com/loans/consumer-loan-rates/

Dan%20-%20Chrome.lnk

https://pseg.com/business/go_solar/index.jsp

http://pemc.coop/save-energy-money/use-less-save-more/rebates-loans/

https://providentcu.org/index.asp?i=personal

https://www.psccu.org/Borrow/Energy-Smart-Loans.aspx

https://www.redwoodcu.org/products/personal/home-solutions-center/solar-loans

https://www.sffirecu.org/loans-and-credit/loans/personal-loans/solar-loans

https://www.sacu.com/

http://www.sdmcu.org/home/loans/solar

https://www.santeecooper.com/residential/reduce-the-use-and-save/smart-energy-loans.aspx

http://www.shrewsburycu.com/home/loans/solar

https://sprucefinance.com/homeowners/solar-financing

http://www.stlucieco.gov/

https://www.summitcreditunion.com/post/credit_unions_staying_green_with_solar_loan_options.html

https://www.swmc.com/swmc/index.php

http://www.sungagefinancial.com/

https://www.umassfive.coop/products/loans

https://www.umpquabank.com/business-banking/greenstreet-loans/for-your-business/


https://www.uvacreditunion.org/content/solarize

https://www.velocitycu.com/loans

http://www.weymouthbank.com/lending/solar-loans.aspx


Secured Loan Providers

Admiral’s Bank* All 50 States

AmeriFirst All 50 States

Bank Five MA, RI

Bank of Colorado CO, NM

BayCoast Bank MA, RI

City and County of Honolulu HI

City of Milwaukee WI

City of Plano TX

City of Richland WA

City of Tallahassee Utilities FL

Clark Public Utilities WA

Educational Employees Credit Union CA

Elevations Credit Union CO

Energy Loan Network CA

First Associates All 50 States

First New York Federal Credit Union NY

Fort Collins Utilities CO

GreenSky Credit* All 50 States

Greenworks Lending CT, DC, MD

Hamilton County OH

Home Loan Investment Bank All 50 States

Idaho Governor’s OER Energy

Loan Program ID

Iowa Energy Center IA

Matador’s Community Credit Union CA

Medallion Bank All 50 States

Michigan Saves MI

Montana Dept. of Environmental Quality MT

National Bank of Arizona AZ

https://www.admiralsbank.com/renewable-energy-lending/loan-programs/solar-step-down

http://www.amerifirst.com/

http://www.bankfive.com/home/misc/solar_loans

https://bankofcolorado.mortgagewebcenter.com/

http://www.baycoastbank.com/home/personal/loans/energyefficientloans

http://www.honolulu.gov/cms-dcs-menu/site-dcs-sitearticles/1852-cad-solar-loan.html

http://city.milwaukee.gov/MilwaukeeShines/Get-Solar/Solar-Financing.htm#.VzTJn_krLIU

http://www.plano.gov/1378/Smart-Energy-Loan-Program

http://www.ci.richland.wa.us/departments/energy-services/solar-power-and-net-metering

https://www.talgov.com/you/you-products-home-loans.aspx

https://www.clarkpublicutilities.com/residential-customers/reduce-energy-waste-and-lower-your-bill/all-rebates-incentives-and-low-interest-loans/solar-energy-program/solar-loan-program/

http://www.myeecu.org/home/products/loans-credit-cards/personal

https://www.elevationscu.com/energyloans/home-loans

http://www.energyloannetwork.com/solar/

http://1stassociates.com/assets/solar/

http://www.firstnewyork.org/home/borrow/solar

http://www.fcgov.com/utilities/residential/renewables

http://www.greenskycredit.com/

http://www.greenworkslending.com/

http://www.hamilton-co.org/hc/hc_hip.asp

http://www.homeloanbank.com/NewsPage.aspx?name=385031+Solar+panels%3A+A%C2%A0home+improvement+project+that+pays+for+itself



http://www.iowaenergycenter.org/alternate-energy-revolving-loan-program-aerlp/

https://matadors.org/loans/solar.html

http://www.medallionbank.com/home-improvement/programs/

http://michigansaves.org/

http://deq.mt.gov/Energy/EnergizeMT/Renewable/altenergyloan

https://www.nbarizona.com/Specialty-Green-Returns.jsp?popup=popup-home-energy.html


Nebraska Energy Office NE

Oregon Dept. of Energy OR

Piedmont Electric Membership Corporation NC

Provident Credit Union All 50 States

Puget Sound Cooperative Credit Union WA

Redwood Credit Union CA

San Antonio Credit Union TX

San Diego Metropolitan Credit Union CA

Santee Cooper SC

Spruce Finance All 50 States

St. Lucie County Florida FL

State Treasurer of Ohio OH

Summit Credit Union All 50 States

Sun West All 50 States

Umpqa Banku NV, OR

University of Virginia Credit Union VA

Velocity Credit Union TX

PACE Loan Providers

Arkansas Advanced Energy

Equity Program AR

AllianceNRG Program CA

CaliforniaFIRST CA

Energy Efficient Equity CA

Figtree PACE Financing CA

Green Finance San Francisco CA

HERO Program CA

Los Angeles County Commercial

PACE Program CA

mPOWER CA

http://www.neo.ne.gov/loan/index.html

../../../../CivicSolar/Desktop/Dan%20-%20Chrome.lnk

http://pemc.coop/save-energy-money/use-less-save-more/rebates-loans/

https://providentcu.org/index.asp?i=personal

https://www.psccu.org/Borrow/Energy-Smart-Loans.aspx

https://www.redwoodcu.org/products/personal/home-solutions-center/solar-loans

https://www.sacu.com/

http://www.sdmcu.org/home/loans/solar

https://www.santeecooper.com/residential/reduce-the-use-and-save/smart-energy-loans.aspx


http://www.stlucieco.gov/

http://www.tos.ohio.gov/ECOLINK

https://www.summitcreditunion.com/post/credit_unions_staying_green_with_solar_loan_options.html

https://www.swmc.com/swmc/index.php



https://www.uvacreditunion.org/content/solarize

https://www.velocitycu.com/loans

http://www.a2e2.net/

http://www.a2e2.net/

https://www.alliancenrg.com/retail/

https://californiafirst.org/

https://www.energyefficientequity.com/

http://www.figtreefinancing.com/

http://sfenvironment.org/article/financing/greenfinancesf-commercial-pace-program

https://www.heroprogram.com/guide-to-savings

http://www.lapace.org/commercial.html

http://www.lapace.org/commercial.html

http://www.mpowerplacer.org/


PACE Funding CA

Renew Financial

Sonoma County Energy Independence

Program CA

Ygrene* CA, CO, FL, MO

Colorado C-PACE CO

Connecticut Energy Finance and Investment

Authority (CEFIA) CT

D.C. PACE Commercial DC

Clean Energy Green Corridor, Miami-Dade FL

Florida PACE Funding Agency Program FL

Green Energy Works Program FL

Leon County Commercial PACE Program FL

St. Lucie County’s Commercial

PACE Program FL

Clean Energy Atlanta Program GA

KY-PACE KY

MD-PACE MD

Ann Arbor’s PACE Program MI

Lean and Green Michigan MI

Minnesota Edina Emerald Energy

Program MN

Southwest Regional Development

Commission MN

Minnesota PACE Program MN

Missouri Clean Energy District Program MO

Set the PACE St. Louis MO

Show Me PACE MO

NJ PACE NJ

Energize New York Finance NY

New York Long Island Green Homes NY

Greater Cincinnati Energy Alliance OH

https://www.pacefunding.com/

https://renewfinancial.com/

http://sonomacountyenergy.org/

http://sonomacountyenergy.org/

https://ygreneworks.com/

http://copace.com/

http://www.ctcleanenergy.com/

http://www.ctcleanenergy.com/

http://urbaningenuity.com/dc-pace

https://www.floridapace.gov/

http://www.floridagreenenergyworks.com/

http://sustainableenvironments.us/clean-energy-atlanta/

http://greatercea.org/commercial/ky-pace/

http://www.a2gov.org/a2energy/commercial/Pages/default.aspx

http://leanandgreenmi.com/index

http://www.swrdc.org/

http://www.swrdc.org/

http://mnpace.com/

http://www.mced.mo.gov/

http://www.setthepacestlouis.com/

http://www.showmepace.org/

http://www.newjerseypace.org/

http://energizeny.org/

http://greenhomeslongisland.com/financing/

http://greatercea.org/


Ohio Northeast Ohio Advanced

Energy District OH

Toledo-Lucas County Port Authority/Better

Buildings Challenge OH

UTAH C-PACE UT

Texas PACE Authority Program TX

Wisconsin Milwaukee Energy

Efficiency (ME2) WI

Solar Lease / PPA Providers

OneRoof CA

Real Goods Solar CA

Spruce Finance AZ, CA, CO, HI, MA,

NJ, OR, PA

Sungevity AZ, CA, CO, CT, DC, DE,

MA, MD, NJ, NM, NY, VT

Sunnova AZ, CA, CO, CT, DE, HI, LA,

MA, MD, MO, NJ, NM, NV,

NY, OR, PA, TX

(*): CivicSolar recommended vendor. Based on rate structure, pricing, regional reach, quality of

service and reputation.

http://www.toledoport.org/services/energy-finance/betterbuildings-northwest-ohio/

http://www.toledoport.org/services/energy-finance/betterbuildings-northwest-ohio/

http://betterbuildingssolutioncenter.energy.gov/implementation-models/property-assessed-clean-energy-pace-program

http://betterbuildingssolutioncenter.energy.gov/implementation-models/property-assessed-clean-energy-pace-program

http://energy.utah.gov/utah-c-pace/

http://www.texaspaceauthority.org/

http://city.milwaukee.gov/Me2#.VzUMfvkrLIU

http://city.milwaukee.gov/Me2#.VzUMfvkrLIU

http://www.oneroofenergy.com/solar-power-purchase-agreement/

http://rgsenergy.com/


http://www.sungevity.com/financing-options

http://www.sunnova.com/

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