As we’ve written about in the past, improved loan options will eventually win out over the solar leases that have become popular in the past few years. SolarCity recently announced that they are catching up with this trend with a new solar loan offer that is a departure from the power purchase agreement (solar lease) that they’ve historically offered.
Rather than lease the panels to the homeowner and charging a rate below the one they currently pay to the utility, SolarCity will now have an option that allows customers to own the solar system outright. The terms of the loan are as follows:
- Eligible for 30% Federal Income Tax Credit
- 30 year loan
- 4.5% fixed interest
- 30-year warranty
- Production guarantee
The production guarantee means that if the system produces less than estimated, SolarCity will reimburse the customer. According to Greentech Media, solar loans accounted for 70% of installations in California in 2013 and have typically been at 3% over a 12 year term, with a payoff in 3-5 years. Expect this to grow with SolarCity entering the fray!