Does anyone finance their panels?

[gpez]

I'm not down to use the house for collateral for solar panels.

Huh, to me that's a strange statement.

If you're willing to use a HELOC to pay for a new kitchen, bathroom remodel, or a new roof paying for solar panels that way would be the exact same. In real estate terms panels generally meet the Fixture Test meaning they're considered part of the real (not personal) property.

The house is collateral for the loan, the panels are a part of the house in this scenario.

 

[marnao]

That 1.5% can also be turned into 2.25% back on travel with ultimate rewards points (though admittedly, these days travel points are probably less in demand than they once were.)


I made my last payment in May, so very recent, and I think others were also within the last month - Might be seeing the light at the end of tunnel:) - seems to be where some discussion of credit card payments started.

cool, thanks for the info! I'm probably a couple months out at this point.. hope nothing changes between now and then!

 

[jboy210]

How is the solarglass?

Doing well. Thanks for asking.

All installed but the virus shutdown the city inspection for a while. They are open now, but we are having trouble with Tesla scheduling the inspection. I guess Tesla does not want the second half of the money bad enough? Anyway, when they tested it the system hits 9-10 kW by 11AM and can fill the 2 Powerwalls in a few hours. When we get inspection and PTO we will probably switch to charging cars in middle of day to soak up some of the excess and still be able to power the house for a day and a half.

 

[jboy210]

Huh, to me that's a strange statement.

If you're willing to use a HELOC to pay for a new kitchen, bathroom remodel, or a new roof paying for solar panels that way would be the exact same. In real estate terms panels generally meet the Fixture Test meaning they're considered part of the real (not personal) property.

The house is collateral for the loan, the panels are a part of the house in this scenario.

Personally I would not use a HELOC to pay for remodeling either. But that is just us. We paid off my home in less than 1/2 the 30 years on the mortgage by making small additional payments every month that went directly to principal. We have also used excess funds to buy equities like Tesla, and additional income producing properties. We have sold the properties as of February, good timing. We still have more remodeling to do on the primary home and will also pay for that cash. This gets us a discount from the contractors because no issues with lender completion inspections.

 

[wjgjr]

Personally I would not use a HELOC to pay for remodeling either. But that is just us. We paid off my home in less than 1/2 the 30 years on the mortgage by making small additional payments every month that went directly to principal. After paying off the house we used the excess funds to buy equities like Tesla, and additional income producing properties. We have sold the properties as of February, good timing. We still have more remodeling to do on the primary home and will also pay for that cash. This get's us a discount from the contractors because no issues with lender completion inspections.

I agree with you completely that this is the ideal way to do things, where possible, but it may not be practical for all people in all situations. And, the unique thing about solar compared to most other renovations is that the value can be fairly straightforward to calculate and the value can significantly exceed the cost of the work. So, there can be a good argument that even if somebody shouldn't use financing (whether secured by the home or not) to pay for most major home renovations, solar could be a good investment that is an exception to that rule. And, where that is the case, using the home a collateral can often make for a better rate than an unsecured loan or one just secured by the solar equipment itself.

 

[jjrandorin]

That's awesome! When was this for reference?

In January of this year for me (paid entire balance of powerwall install on my costco cc which is linked to my paypal accountl. Tesla sent me invoice through paypal, I paid it through paypall with my CC as the form of payment. No fees, and received the 1% cashback that costco offers on all "other purchases" credited toward my yearly total.)

In my particular case, my solar panels are leased through solar city. I got them in 2015 and back then there was zero chance I would have been able to buy them outright, and I was not even sure of staying in this home long term at the time. I made a decision to go with the lease vs not having solar at all (those were my choices then), and while I wish I had been able to purchase them instead of lease, I am glad I at least got something on my roof then.

Solar city requires a 5 year lease period before buying them out, so I am likely going to see what the cost to buy out my system would be and buy it out when I can. I have re financed twice (once to get out of PMI, once to lower the rate down to 3% recently), and it wasnt much of an issue with the leased solar panels on there... but obviously would be better if I just owned them.

Where I am, owned solar would have increased home value, while leased solar does not decrease it, but did not increase it either.

Anyway, when I did the powerwalls just recently I was in a better place and was able to put them on a CC and just pay it off at the end of the month.

 

[gpez]

Personally I would not use a HELOC to pay for remodeling either. But that is just us. We paid off my home in less than 1/2 the 30 years on the mortgage by making small additional payments every month that went directly to principal. We have also used excess funds to buy equities like Tesla, and additional income producing properties. We have sold the properties as of February, good timing. We still have more remodeling to do on the primary home and will also pay for that cash. This gets us a discount from the contractors because no issues with lender completion inspections.

I think you and I agree on paying for things with cash, I'm the same way

I was simply poking at the "I'm not down to use the house for collateral for solar panels" statement which implies that if you were taking a loan out you'd prefer an unsecured one vs a secured one. Sounds like maybe your intent was more about not taking loans out, I very much get that. For people that don't have debt aversion as you and I do I was simply saying that a HELOC is functionally the same for solar panels as it is things like a kitchen remodel in terms of collateral.

 

[morbidz]

Do you think so? The total is about 53,500 but there’s a 7100 discount for installing PW with the panels and an 8,200 transition renewable energy credit that really brings the price down. There’s so additional money for trenching but after the discount, rebates and tax incentives it’s 31,058.73. For me to just do a natural gas generator was nearly 16,000 bucks. So I look at this as a net 16,000 because I was going to do backup power in one form or another.

If $8200 you reference is SREC, then you should NOT sell it to Tesla to use as discount. In NJ even with a modest $200 per SREC , your system would generate about 12 credits a year ($2400) and in NJ you're allowed to sell them for 10 years. Basically you're letting Tesla deal with it and get immediate credit but at a cost of almost ~16K!

EDIT

Also since they are discounting by $8200 and pocketing 16K, you are also missing out on additional 26% tax credit on that $8200, so another $2100. All together missing out on ~18K if you take that "discount"

 

[marnao]

If $8200 you reference is SREC, then you should NOT sell it to Tesla to use as discount. In NJ even with a modest $200 per SREC , your system would generate about 12 credits a year ($2400) and in NJ you're allowed to sell them for 10 years. Basically you're letting Tesla deal with it and get immediate credit but at a cost of almost ~16K!

EDIT

Also since they are discounting by $8200 and pocketing 16K, you are also missing out on additional 26% tax credit on that $8200, so another $2100. All together missing out on ~18K if you take that "discount"

As of May 1 NJ is on the TREC program which is far less lucrative. It's only $93 per TREC for residential solar. The difference for me is $5400 up front or ~$12000 over 15 years.. I think I'm going to take the $5400 unless someone can talk me out of it. It's just not as compelling as the SRECs.

 

[morbidz]

As of May 1 NJ is on the TREC program which is far less lucrative. It's only $93 per TREC for residential solar. The difference for me is $5400 up front or ~$12000 over 15 years.. I think I'm going to take the $5400 unless someone can talk me out of it. It's just not as compelling as the SRECs.

I didn't realize it changed. I just started SREC back in January 2020, after late October 2019 install.

 

[marnao]

I didn't realize it changed. I just started SREC back in January 2020, after late October 2019 install.

You got lucky! Solar Transition Frequently Asked Questions (FAQs) | NJ OCE Web Site

 

[Zer0t]

Huh, to me that's a strange statement.

If you're willing to use a HELOC to pay for a new kitchen, bathroom remodel, or a new roof paying for solar panels that way would be the exact same. In real estate terms panels generally meet the Fixture Test meaning they're considered part of the real (not personal) property.

The house is collateral for the loan, the panels are a part of the house in this scenario.

I wouldn’t do that either unless I was at an undesirable rate heading to a very desirable rate. One of the reasons I did my mortgage the way it is currently was the 2.75% 30 year fixed. I don’t want to turn a 31k expense that has a long payback into a longer payback when adding interest. I’ve read solar adds 3% to home value but I don’t really believe in that general statement. A kitchen or a bathroom renovations generally add the most value. But again be careful of the final cost based on your rate and prevailing market returns.

 

[Zer0t]

I didn't realize it changed. I just started SREC back in January 2020, after late October 2019 install.

Do you have to sell your own credits or does Tesla buy them? In my quote it seems to be netted of the cash out of pocket.

and sorry I misread mine says TREC.

 

[morbidz]

Do you have to sell your own credits or does Tesla buy them? In my quote it seems to be netted of the cash out of pocket.

and sorry I misread mine says TREC.

you sell your own via broker. once registered, all it takes is entering production info once a month.

So ~$93x12monthsx15 years = $16.7K. Tesla is offering you $8200 right away. Considering the tax incentive, it's only ~$6100.
You need to decide for yourself if it makes sense to you.

 

[willow_hiller]

you sell your own via broker. once registered, all it takes is entering production info once a month.

Thanks for this information. I've heard the brokers typically take a small cut as well, right?

I'm looking into the SREC trade vs. sell in Maryland and there's a pretty big disparity (so I'm guessing Tesla doesn't think the SREC market in Maryland is sustainable).

Tesla offers $170 per kW of system up front, so for a Medium 7.6 kW system you get about $1,250 if you trade away the SREC rights. But even after accounting for a broker's cut, and discounting the future value, the present lifetime value of the SRECs is closer to $5k!

 

[morbidz]

Thanks for this information. I've heard the brokers typically take a small cut as well, right?

I'm looking into the SREC trade vs. sell in Maryland and there's a pretty big disparity (so I'm guessing Tesla doesn't think the SREC market in Maryland is sustainable).

Tesla offers $170 per kW of system up front, so for a Medium 7.6 kW system you get about $1,250 if you trade away the SREC rights. But even after accounting for a broker's cut, and discounting the future value, the present lifetime value of the SRECs is closer to $5k!

SRECtrade which is the broker that I use takes 7% cut

 

[Zer0t]

you sell your own via broker. once registered, all it takes is entering production info once a month.

So ~$93x12monthsx15 years = $16.7K. Tesla is offering you $8200 right away. Considering the tax incentive, it's only ~$6100.
You need to decide for yourself if it makes sense to you.

Thank you, it may just make sense to sell them myself. This why some of these online forums are so great, useful information. Thanks again.

 

[willow_hiller]

Does anyone know if financing through Tesla results in any significant closing costs?

I can buy the solar system I want in cash around July 2021, but of course waiting until then results in a 22% federal tax credit instead of the current 26% one. I don't know if closing costs, plus interest for 1 year, plus any potential credit score effect are cumulatively worth more or less than 4%.

 

[jjrandorin]

Does anyone know if financing through Tesla results in any significant closing costs?

I can buy the solar system I want in cash around July 2021, but of course waiting until then results in a 22% federal tax credit instead of the current 26% one. I don't know if closing costs, plus interest for 1 year, plus any potential credit score effect are cumulatively worth more or less than 4%.

Tesla doesnt do the financing themselves, they forward you to a solar loan company. When I was buying my powerwalls, I was trying to get them in by the end of last year. I was going to take a loan so I could get it into last year, then pay off the loan in like 3-4 months when I was able to move some money around (I didnt want the extra income in last year).

Anyway, when I asked tesla about financing, they forwarded me an application to a company called "sunlight financial" which is a company that finances solar installs. It was quick application, and the loan did not have "closing costs", but the interest rate was a bit higher than I liked. It also did not have a pre payment penalty so I had decided it worked with my "short term loan" idea.

The loan had a strange kicker in it, where they expect you to send your tax rebate as a payment to the loan, and have that built into the payment schedule. You have 18 months from loan inception to send in what they calculate as your tax credit. If you dont, the payment goes up after that 18 month period (effectively, the monthly payment includes the tax credit as part of the down payment, but you have 18 months to make that down payment).

I thought all that was strange, but since I was going to pay the loan off in 3-4 months anyway, it really didnt matter to me. I never ended up executing on that loan, however, since tesla ended up not making the end of the year install date due to their issues, not mine. Since my install ended up being moved to Jan 6th (JUST missing 4% of the tax credit), it was going to be in 2020 tax year, not 2019. Since I was going to pay the loan off in 2020 anyway, I just moved money around and paid it in cash, instead of taking the loan, since the income was in 2020 like I was planning on.

I remember reading somewhere on here that tesla may not even offer financing anymore, even through the third parties, so you might have to go get your own financing anyway. I would check into whether they offer it at all (but I guarantee its not a tesla lending company).

 

[wjgjr]

Does anyone know if financing through Tesla results in any significant closing costs?

I can buy the solar system I want in cash around July 2021, but of course waiting until then results in a 22% federal tax credit instead of the current 26% one. I don't know if closing costs, plus interest for 1 year, plus any potential credit score effect are cumulatively worth more or less than 4%.

The other thing to consider is that the price might actually drop by July 2021. On the solar roof side, Tesla definitely dropped its prices from v2 to v3, and even the v3 price dropped from 2019 to 2020. And at least initially, Tesla also cut some of its car prices as the federal EV rebate started to phase out. In principle, that should be the effect of the dropping credits - they were offered to encourage innovation and subsidize the initial ramping up of production. So, hopefully costs will go down as they continue to ramp up panel and roof installs. And, Tesla is also well aware of the "net price" after credits and energy generation since they promote that pricing, so I expect they will look to at least somewhat compensate for the reduced credit. So, it might at least reduce that 4% rebate lost. And, there is always the wildcard of if or when Tesla offers something better.