How to Pay for a Solar PV System

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Solar is great, but many people wonder how to cover the cost. While it’s a stable and motivating investment, it is certainly a big investment. Like all investments, there are several ways to organize the financials. As a service to our solar investors, Optimus Solar offers four primary ways to pay for a solar system, each of which comes with varying benefits. 

Option 1: Seacoast Bank Solar Loan – Optimus is an approved vendor with Seacoast Bank.  This means that for solar energy systems installed by Optimus, the borrower has a streamlined process and closing costs are paid by Optimus Solar.  This can usually be done with one in-person meeting, saving time and money.  Terms range from 5-10 years with rates based upon credit scores and debt-to-income ratios at the time of application.

Option 2: Clean Energy Credit Union – Optimus Solar has made an investment in the Clean Energy Credit Union to be able to offer our clients the ability to take out a 12-year loan for 70% of the value of their system at 5.75% interest (with short-term option for the other 30%). This option fixes your loan payment for 12 years, versus utility rates that have historically risen each year. Additionally, once it’s paid off, the system will be producing power for many years to come!

Option 3: Home Equity Line of Credit – A HELOC is usually the most direct way to receive the lowest interest rate on a solar loan.  Many homeowners choose to use the equity in their house to pay for a solar system, and the savings from a reduced utility bill each month are used to pay the loan back. This is secured against a person’s home, while at the same time reducing the long-term cost of ownership of the house, thereby increasing overall value.

Option 4: Cash – Paying cash for a solar system provides the most direct way to monitor the “system payback,” and provides a motivating (>12%) annual return on investment for decades to come.  We recommend this method as the most efficient way to invest in solar, recognizing that it may not suit the means of all clients.

Before embarking on your solar journey, it is essential to know that you are working with a partner that will be there for the long-haul and one that provides options to ensure a financial return to your household or business.  When Optimus installs a solar system on a home or business, we pay any costs associated with loan closing, ensuring that the price quoted is the price paid. Optimus Solar has a long background of financial professionalism. We want to ensure that our solar investors understand the details of their chosen payment option. 

 

 

Top Five Questions to Ask Your Solar Installer

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Every homeowner considering investing in solar can benefit from knowing the right questions to ask prospective vendors. Below are our top five questions solar investors should be asking. We included some vendor inputs that may affect the answers to questions.  We hope you find this helpful in your search for quality 30+ year solar solutions.

1.    How do you calculate overall system production representations?

This is one of the most critical questions as it determines overall ROI of the system, including the payback period. The critical assumptions that go into this calculation are orientation of panels, tilt of panels, shading and other variables.  Optimus Solar uses the most advanced software available to ensure these inputs are accurate. Additionally, before presenting to a potential investor, we double-check these numbers against our internal prediction tools to ensure accuracy.  Lastly, as part of all of our installs, we offer a “Payback Period Guarantee”.

2.    How can you stand behind your warranty representations?

The reality in any industry is that there is no guarantee a company will be around to service and fulfill their warranty commitments.  Optimus Solar escrows a percentage of each job in a separate account, not usable for business operations, that is available during all warranty period representations.  This makes it ‘arm’s length’ from the business and ensures our commitments will always be met.

3.    What insurance do you have in place?  

All solar contractors should have general liability and worker’s compensation insurances.  Each solar investor is well within their rights to request copies of these prior to signing a contract.

4.    Do you have job-site management practices in place?

A major concern for homeowners and businesses is the effect of on-site work on daily life and operations.  Ensuring a solar company has proper jobsite management documentation in writing and in practice is critical to a good experience. Optimus Solar has written policies that we share with each owner prior to the job to ensure we are accountable to those standards throughout the entire installation process.

5.    How ‘Green’ is your company overall?

Solar has a reputation for being ‘Green,’ but as with any product, there are exceptions.  These include everything from production byproducts to end-of-life questions around solar panel recycling.  Optimus Solar uses 100% US-manufactured solar panels and racking systems to reduce transport costs and ensure future availability of parts.  Additionally, Optimus escrows a percentage of each job for future recycling of panels.  Nearly all materials in a solar panel are recyclable, and we believe it is the responsibility of all involved in solar to ensure provisions for future reuse of parts. Finally, we recycle all packaging of all parts shipped to us.

Quality experiences and honest representations help make for the best solar experience for all parties involved.  If homeowners know which questions to ask before signing a contract, they can help ensure a positive overall solar experience!

What Factors Determine a Solar System's Payback?

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For many people, the financial payback for installing a solar PV system on their home or business is the number one motivator for taking action.  But how is the payback calculated? This article focuses on the story behind the numbers, explaining what is “real” and how to ensure the return meets expectations.

All financial predictions are based on a certain set of assumptions.  This is true for the payback period of a solar system as well.  To ensure the representation is realistic, some important assumptions to check are:

1.    What is included under warranty during the system payback period?  

If there are certain items not covered under warranty that may require replacement or service during this period, these additional ‘hidden’ costs will push out the overall payback period and reduce the per year return on investment. It is important to ask your solar provider exactly what is included in the warranty so that you aren't caught by surprise with maintenance costs down the line.

2.    What utility rate annual increase is assumed in the model?  

Over the past 20-30 years, most utility rates have increased on an annualized basis.  Therefore, it is fair to assume this trend may continue. However, changing the amount of this increase even 1% per year can change the overall system payback by a financially significant amount.

3.    What utility rate was assumed?  

Many electrical companies have varying rates for residential, business, commercial, etc. To that end, it is important to ensure the correct rate type was used in the model.

4.    How can an owner confirm their system generation during payback?  

Accountability for representations is usually a tricky issue due to a lack of information. Certain solar systems have a built-in tracking feature where the owner can track their system’s production in real time and in aggregate, compare this to representations and have confidence in their performance.  Be sure your system has this feature (and it does not have an additional cost).

5.    Does the production representation take system shading into account? 

Shade is a large contributor to system underperformance.  It is important that any payback period take into account the true shading of the system, otherwise payback may be longer than represented.

6.    How long after the payback period should an owner expect to have power generation?

The life of solar systems varies based on the quality of components and installation types. Many PV panels are warrantied for 25-30 years of power generation; experience shows production can last well beyond the 30-year mark with proper care.


All Optimus Solar systems for homes and businesses transparently answer these questions, and come standard with power generation tracking, full payback-period warranty and a 30-year power production warranty.