Recently, loan products have been springing up from a variety of providers, cutting into the third party finance (lease/PPA) market share, albeit only a little. While we applaud the expansion of options to customers in how they can pay for their solar, we see a clear missing element in nearly all existing loan offerings — loan value predicated on solar installation value.
An intriguing exception, Sungage recently announced a loan program for Connecticut — in concert with the Clean Energy Finance and Investment Authority (CEFIA) and Mosaic — which lends to residential projects based on the net present value of savings from the solar installation. In this system, the lender appraises a clear present value to the customer and predicates financing based on it, rather than solely on a customer’s credit rating, salary or unrelated collateral. Put another way, Sungage’s customer payments are directly based on their energy savings, or willingness to pay, and not just on ability to pay. While there are a number of innovative aspects to this financing package, this simple, but rarely practiced, form of solar lending is crucial to solar’s future.