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Financing directly as homeowner

Has anyone who recently installed solar secured a loan themselves? I just tried calling Dividend, Sunlight and Mosaic and all three told me they only work with contractors. Am I going about this wrong? My inspection should be in the next week or two so I'm looking to line up financing in the immediate future. I can certainly go back to Tesla and try for a 10yr loan, but that wasn't my preferred option based on what I read in other posts.
 

jjrandorin

Moderator, Model 3, Tesla Energy Forums
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Nov 28, 2018
14,191
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Riverside Co. CA
Has anyone who recently installed solar secured a loan themselves? I just tried calling Dividend, Sunlight and Mosaic and all three told me they only work with contractors. Am I going about this wrong? My inspection should be in the next week or two so I'm looking to line up financing in the immediate future. I can certainly go back to Tesla and try for a 10yr loan, but that wasn't my preferred option based on what I read in other posts.

"inspection" for what? Going through whom for PV? Either go through your PV installer (tesla or otherwise) for them to farm it out to one of their loan providers (like sunlight or mosaic), or do something like get a home equity loan or something.

Its very common for loan companies to only work through another source (like a store, a contractor, etc). I didnt know that about these but it doesnt surprise me in the least. If you want to do it yourself either get a home equity line of credit or something, or apply for an unsecured loan (with the rates those charge).
 
"inspection" for what? Going through whom for PV? Either go through your PV installer (tesla or otherwise) for them to farm it out to one of their loan providers (like sunlight or mosaic), or do something like get a home equity loan or something.

Its very common for loan companies to only work through another source (like a store, a contractor, etc). I didnt know that about these but it doesnt surprise me in the least. If you want to do it yourself either get a home equity line of credit or something, or apply for an unsecured loan (with the rates those charge).
Inspection for the solar and Powerwalls install - we are required to pull permits on this in NJ. I was under the impression that others had secured their own solar loans through third-parties, and didn't finance directly through Tesla. Perhaps I am mistaken. I'll reach back out to Tesla about their 10yr loan since the rate isn't that.
 

jjrandorin

Moderator, Model 3, Tesla Energy Forums
Moderator
Nov 28, 2018
14,191
17,919
Riverside Co. CA
Inspection for the solar and Powerwalls install - we are required to pull permits on this in NJ. I was under the impression that others had secured their own solar loans through third-parties, and didn't finance directly through Tesla. Perhaps I am mistaken. I'll reach back out to Tesla about their 10yr loan since the rate isn't that.

Tesla doesnt finance (just like the vehicles). Tesla arranges financing through third parties. Tesla has waffled back and forth on the solar loans on whether they do them or not, however, from what I read here. If you want a solar loan you need to go through your contractor, if thats tesla, and they still offer sending people to their partners in this (like sunlight) you will need to go that route.
 
all three told me they only work with contractors.
The reality is they need to "work with" you as well because you sign the loan. Certainly they need the contractor to certify that the system is installed. The question is whether Tesla will work with them and their paperwork requirements. Sounds like a Tesla loan is your best bet.
 

holeydonut

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Supporting Member
Jun 27, 2020
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East Bay NorCal
Edit: (Most "solar loans") are a unique financial instrument since they are secured against your solar/ESS assets. And the labor of install is a huge component of the quality of the system, so the underwriters want proof a competent/licensed business installed it. Mosaic may retain servicing rights but they need to sell the loan to somebody so they can get more cash to issue more new loans. So, Mosaic cannot issue a solar loan for a DIY owner installation since that particular banking asset wouldn't meet the requirements of the other banks that will eventually buy the loan (or participate in the securitization). So the only way Mosaic can ensure their loans are used correctly is to work with trusted partners who are doing the installs and sign off on the quality/system before the loan is issued.

If you want to finance your particular solar+ESS project without a solar loan, you'll need a HELOC or unsecured personal loan. I guess there are some unsecured solar loans, but those are just personal loans with a funny name. For the unsecured personal loan, you can actually go to lenders like SoFi or Upgrade and tell them you're interested in using the money to pay for solar. Their rates may be close or better than what a secured "solar loan" may come in.

But whatever you do; avoid a PACE loan. The consensus is those loans are just trash for the vast majority of people suckered into them.
 
Last edited:

jjrandorin

Moderator, Model 3, Tesla Energy Forums
Moderator
Nov 28, 2018
14,191
17,919
Riverside Co. CA
Edit: (Most "solar loans") are a unique financial instrument since they are secured against your solar/ESS assets. And the labor of install is a huge component of the quality of the system, so the underwriters want proof a competent/licensed business installed it. Mosaic may retain servicing rights but they need to sell the loan to somebody so they can get more cash to issue more new loans. So, Mosaic cannot issue a solar loan for a DIY owner installation since that particular banking asset wouldn't meet the requirements of the other banks that will eventually buy the loan (or participate in the securitization). So the only way Mosaic can ensure their loans are used correctly is to work with trusted partners who are doing the installs and sign off on the quality/system before the loan is issued.

If you want to finance your particular solar+ESS project without a solar loan, you'll need a HELOC or unsecured personal loan. I guess there are some unsecured solar loans, but those are just personal loans with a funny name. For the unsecured personal loan, you can actually go to lenders like SoFi or Upgrade and tell them you're interested in using the money to pay for solar. Their rates may be close or better than what a secured "solar loan" may come in.

But whatever you do; avoid a PACE loan. The consensus is those loans are just trash for the vast majority of people suckered into them.

This is slightly off topic (but only slightly, since the original post is asking about loans for PV installs), but can you give a synopsis of what you understand is wrong with the PACE loan program? I dont have one, but on the surface they "Sound" like an OK path for people who want to finance. Of course, purchasing outright would be best, but I would be interested in your opinion on, at a high level, whats wrong with the PACE program.
 

holeydonut

Active Member
Supporting Member
Jun 27, 2020
3,074
2,421
East Bay NorCal
This is slightly off topic (but only slightly, since the original post is asking about loans for PV installs), but can you give a synopsis of what you understand is wrong with the PACE loan program? I dont have one, but on the surface they "Sound" like an OK path for people who want to finance. Of course, purchasing outright would be best, but I would be interested in your opinion on, at a high level, whats wrong with the PACE program.


Lol I guess I would need to be careful for libel against PACE people... although damages would be hard to prove on TMC ;)

I think this article best summarizes what is most often wrong with PACE loans:

For those who don't want to read that article, basically PACE loans put a lien on your county property tax profile for your home's parcel. So while a normal "secured solar loan" has al lien on the solar panels and ESS, the PACE is linked to your home. Sure, somebody out there may have a good experience with PACE loans. But the way PACE loans can be abused makes them rife for fraud.

We may hate banks, insurance companies, and hedge funds, but they're the ones that buy up the loan assets from lenders of secured solar loans or normal unsecured personal loans. At least the banks have mechanisms to protect their assets, which in theory also protects the borrower in some way. (Yes, I know banks still screw people through other means; but we're just talking about loan origination at the moment).

This brings me to why I believe PACE loans are trash. They aren't regulated and those loans have no underwriting. If a homeowner gets a Mosaic or Greensky secured solar loan, at least the lender vets the installer and borrower. And, the homeowner needs to sign off that the system was "received as designed/expected" before the cash is moved. This means if a homeowner goes with some "Acme Solar Pros LLC" for your project, at least somebody took a look at Acme to have a license/bond/etc... and the homeowner had to attest the system was functional before the cash was paid to Acme for services. The rules were there to protect all interested parties.

But with PACE loans, the homeowner and the county tax assessment are basically the only 'checkers'. The County isn't going to vet a company like the "Pace Funding Group" referenced in the article since the PACE program doesn't allow the county to impose underwriting. After all the county isn't a bank and the county gets to roll PACE loans into a big securitization without the same underwriting pain as a normal loan. The PACE loan simply abuses the concept that the loan is backed by super valuable collateral in the form of property taxes on parcels. This is why in that article you'll see a fake installer just doing a trash install but not caring if the system works or not. The PACE loan has no recourse against the installer for simply doing a trash job. And as a result, to me the PACE loan is trash since the program is so easy to abuse.

The PACE program also ignores any underwriting on the borrower since the whole point of the PACE program was to find a way to get financing to poor people who may not pass a normal underwriting model. So the PACE program brings together the worst of to the worst. It allows a loan to be originated with basically zero underwriting. And, the company doing the loan origination isn't on the hook for how the green energy system or how the loan performs over time.

You can thank your lawmakers for this well intended but misguided policy. Yes, some people have benefited from PACE. But no, the people often offering PACE options now-a-days aren't the types of folks with your best interest in mind.
 
Edit: (Most "solar loans") are a unique financial instrument since they are secured against your solar/ESS assets. And the labor of install is a huge component of the quality of the system, so the underwriters want proof a competent/licensed business installed it. Mosaic may retain servicing rights but they need to sell the loan to somebody so they can get more cash to issue more new loans. So, Mosaic cannot issue a solar loan for a DIY owner installation since that particular banking asset wouldn't meet the requirements of the other banks that will eventually buy the loan (or participate in the securitization). So the only way Mosaic can ensure their loans are used correctly is to work with trusted partners who are doing the installs and sign off on the quality/system before the loan is issued.

If you want to finance your particular solar+ESS project without a solar loan, you'll need a HELOC or unsecured personal loan. I guess there are some unsecured solar loans, but those are just personal loans with a funny name. For the unsecured personal loan, you can actually go to lenders like SoFi or Upgrade and tell them you're interested in using the money to pay for solar. Their rates may be close or better than what a secured "solar loan" may come in.

But whatever you do; avoid a PACE loan. The consensus is those loans are just trash for the vast majority of people suckered into them.
Thanks - I originally elected "cash" based on advice from others with respect to getting a better rate elsewhere based on Tesla rates at the time. Now I'm not sure what my options are - it sounds like I have to go back to Tesla and ask to finance through them. At no point was I made aware I needed to arrange all this beforehand since they don't require payment until after inspection is completed.
 

holeydonut

Active Member
Supporting Member
Jun 27, 2020
3,074
2,421
East Bay NorCal
Thanks - I originally elected "cash" based on advice from others with respect to getting a better rate elsewhere based on Tesla rates at the time. Now I'm not sure what my options are - it sounds like I have to go back to Tesla and ask to finance through them. At no point was I made aware I needed to arrange all this beforehand since they don't require payment until after inspection is completed.


Tesla should be able to point you in a direction to get the project financed...

But make sure you get a quote for the cash cost and the full details of the amount your lender thinks you're financing. I'm out here in California, but when I got my system, every single "cash only" quote was about 3 to 5% lower than the amount being financed day one from a lender.

The lenders were basically charging an origination fee plus taking their 2.99% interest over 5 years or whatever. Super sketchy, but completely within their rights to do on the secured solar loan product.
 

jjrandorin

Moderator, Model 3, Tesla Energy Forums
Moderator
Nov 28, 2018
14,191
17,919
Riverside Co. CA
Lol I guess I would need to be careful for libel against PACE people... although damages would be hard to prove on TMC ;)

I think this article best summarizes what is most often wrong with PACE loans:

For those who don't want to read that article, basically PACE loans put a lien on your county property tax profile for your home's parcel. So while a normal "secured solar loan" has al lien on the solar panels and ESS, the PACE is linked to your home. Sure, somebody out there may have a good experience with PACE loans. But the way PACE loans can be abused makes them rife for fraud.

We may hate banks, insurance companies, and hedge funds, but they're the ones that buy up the loan assets from lenders of secured solar loans or normal unsecured personal loans. At least the banks have mechanisms to protect their assets, which in theory also protects the borrower in some way. (Yes, I know banks still screw people through other means; but we're just talking about loan origination at the moment).

This brings me to why I believe PACE loans are trash. They aren't regulated and those loans have no underwriting. If a homeowner gets a Mosaic or Greensky secured solar loan, at least the lender vets the installer and borrower. And, the homeowner needs to sign off that the system was "received as designed/expected" before the cash is moved. This means if a homeowner goes with some "Acme Solar Pros LLC" for your project, at least somebody took a look at Acme to have a license/bond/etc... and the homeowner had to attest the system was functional before the cash was paid to Acme for services. The rules were there to protect all interested parties.

But with PACE loans, the homeowner and the county tax assessment are basically the only 'checkers'. The County isn't going to vet a company like the "Pace Funding Group" referenced in the article since the PACE program doesn't allow the county to impose underwriting. After all the county isn't a bank and the county gets to roll PACE loans into a big securitization without the same underwriting pain as a normal loan. The PACE loan simply abuses the concept that the loan is backed by super valuable collateral in the form of property taxes on parcels. This is why in that article you'll see a fake installer just doing a trash install but not caring if the system works or not. The PACE loan has no recourse against the installer for simply doing a trash job. And as a result, to me the PACE loan is trash since the program is so easy to abuse.

The PACE program also ignores any underwriting on the borrower since the whole point of the PACE program was to find a way to get financing to poor people who may not pass a normal underwriting model. So the PACE program brings together the worst of to the worst. It allows a loan to be originated with basically zero underwriting. And, the company doing the loan origination isn't on the hook for how the green energy system or how the loan performs over time.

You can thank your lawmakers for this well intended but misguided policy. Yes, some people have benefited from PACE. But no, the people often offering PACE options now-a-days aren't the types of folks with your best interest in mind.

Thanks for the reply, and that all makes perfect sense.

EDIT: One more thing.... I didnt read the article, but that is because I am more comfortable with your evaluation of the issue at hand than I would be reading the article, lol.
 
Last edited:

h2ofun

Active Member
Aug 11, 2020
3,607
867
auburn, ca
Tesla should be able to point you in a direction to get the project financed...

But make sure you get a quote for the cash cost and the full details of the amount your lender thinks you're financing. I'm out here in California, but when I got my system, every single "cash only" quote was about 3 to 5% lower than the amount being financed day one from a lender.

The lenders were basically charging an origination fee plus taking their 2.99% interest over 5 years or whatever. Super sketchy, but completely within their rights to do on the secured solar loan product.
If I had use cash for my PW's, I would never have seen them. Because I use a loan with them, that company had a contract with Tesla for batteries. Now, I do hope to pay the loan of as soon as I can.
 

holeydonut

Active Member
Supporting Member
Jun 27, 2020
3,074
2,421
East Bay NorCal
Thanks for the reply, and that all makes perfect sense.


Yeah, I wish the County actually vetted the companies originating the PACE loan. It's amazing how easy a fraudulent "Pace Funding Group" can operate... where the county just sends $$$ into their bank account once "Pace Funding Group" sends over a few pictures, signatures, and a parcel # to screw over. But people don't like their governments to be involved in this sort of thing haha.

Oh, and for most borrowers, the interest rates on PACE loans are also pretty bad compared to normal loans.
 

holeydonut

Active Member
Supporting Member
Jun 27, 2020
3,074
2,421
East Bay NorCal
If I had use cash for my PW's, I would never have seen them. Because I use a loan with them, that company had a contract with Tesla for batteries. Now, I do hope to pay the loan of as soon as I can.


Wait, are you saying the company you used for your Solar and Powerwalls would not sell Powerwalls to you unless you financed a loan through them? And that loan had origination costs or other up-front fees that resulted in a higher financed amount than what you would have paid had you done an all-cash deal?
 

h2ofun

Active Member
Aug 11, 2020
3,607
867
auburn, ca
Wait, are you saying the company you used for your Solar and Powerwalls would not sell Powerwalls to you unless you financed a loan through them? And that loan had origination costs or other up-front fees that resulted in a higher financed amount than what you would have paid had you done an all-cash deal?
nope, I did not say that. I had a choice! I know a person who got approval many months before me for SGIP batteries, agreed to pay cash, and still is waiting. Last year no one had any idea getting PW's would be this nuts
 
Lol I guess I would need to be careful for libel against PACE people... although damages would be hard to prove on TMC ;)

I think this article best summarizes what is most often wrong with PACE loans:

....
Many thanks pointing this out. Yes, the poor are a great target historically.
 

holeydonut

Active Member
Supporting Member
Jun 27, 2020
3,074
2,421
East Bay NorCal
And Tesla won't finance either - you basically need to apply for the loan prior to installation, or you're screwed. Happy days.


Hmmmm, sounds like Tesla doesn't have a reliable financing partner with a lending license in Jersey. I would recommend you hit up SoFi or Lending Club or Fiona (no, I didn't paste any affiliate links...) to see if they can get you a personal loan for this "home improvement project". Interest rates are pretty low and you could get something reasonable.

If this personal loan option doesn't work, I would also recommend that you to explore a HELOC. Some regional banks near me are offering introductory 0.99% APR rates on HELOCs at this time, which if you pay down before the HELOC revolving period ends, you could save quite a bit of interest.

You can also look for other installers other than Tesla. If your project needs a new main service panel, I've found Tesla's rates aren't actually cheaper than the competition. For example, Sunrun will include a main service panel replacement/upgrade for "free" as long as that cost is a simple like-for-like.
 

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