New 5 Year / 0.99% Solar Panel Financing Option

[mully]

I noticed that Tesla now has a 5 year / 0.99% financing option when I log in like a new user and configure a solar / Powerwall system. However, when I go to my "Your System Layout" page on my Tesla account, my only financing options are the 20 year/4.99% and 10 year/3.99% options.

Will I be able to change my financing terms down the road if I go ahead and click the "Accept and Check Credit" button?

I asked my project advisor about the new terms today via email. He responded with this: "It didn’t give me the option to send you the 5 year option. I need some clarification on what qualifies as I was out of office yesterday when it was rolled out."

I asked him to update me once he found out more but never heard back.

 

[Matt35]

Nice, I had not seen that option. I had placed a deposit a few months ago, but need to wait until I have my model 3 delivered in order to get a larger system approved by utility company. When I saw my plan, it showed a loan option for a smaller 17 panel $7k system. My service advisor said that shouldn't be listed as they don't do loans under $8k. I mention all of that because maybe its a similar scenario. Maybe they don't offer the 5 year option based on whatever your system size/price/state is. But I agree that they shouldn't list options on the site if they aren't going to be offered to you when your plan comes.

 

[mully]

I went ahead and clicked "Accept and Credit Check" to see if I was giving this new financing option but was not, so I called Tesla. They said that it only shows up on the account for brand new orders, but they are able to add it to my account on the backend. They told me they will inform Sunlight Financial who will send over an updated agreement with the new terms in 3 to 5 days.

 

[Matt35]

I went ahead and clicked "Accept and Credit Check" to see if I was giving this new financing option but was not, so I called Tesla. They said that it only shows up on the account for brand new orders, but they are able to add it to my account on the backend. They told me they will inform Sunlight Financial who will send over an updated agreement with the new terms in 3 to 5 days.

Awesome. Thanks for the update.

 

[KHYE]

Didn't see this rate as I havent submitted my order yet, i think it depends on your location. I saw 1.99%.

 

[holeydonut]

You should also check to make sure that selecting financing isn't burying financing charges.

For example, maybe cash-only is $20,000... but if the client selects 0.99% financing... then the "financed amount" becomes $20,999. This would be akin to burying an effective interest rate into the transaction or "buying points" with a higher principal balance.

Home loans and auto loans are highly regulated and have lots of rules around making this type of finance charge very overt to the customer. But most solar loans don't have as many rules around language and communications. I've seen numerous solar loans and PACE loans burying all sorts of crazy things in the contracts. Consumers have to be extra careful any time solar financing is involved.

 

[CrazyRabbit]

Mosaic has the best rates... 20 year at 1.99 (with auto payment from bank account).

 

[mully]

Mosaic has the best rates... 20 year at 1.99 (with auto payment from bank account).

Wow! I had not seen this Mosaic option. I will reach out!

 

[Matt35]

You should also check to make sure that selecting financing isn't burying financing charges.

For example, maybe cash-only is $20,000... but if the client selects 0.99% financing... then the "financed amount" becomes $20,999. This would be akin to burying an effective interest rate into the transaction or "buying points" with a higher principal balance.

Home loans and auto loans are highly regulated and have lots of rules around making this type of finance charge very overt to the customer. But most solar loans don't have as many rules around language and communications. I've seen numerous solar loans and PACE loans burying all sorts of crazy things in the contracts. Consumers have to be extra careful any time solar financing is involved.

Very true. My local solar companies try to bake it all in and not show it too clearly. A $19k system quickly had a new purchase price of $21k-$24k at different rates/lengths. Basically just buying points up front.

 

[tfan2018]

Does paying via loan affect the tax credit?

 

[Matt35]

Does paying via loan affect the tax credit?

No it shouldn’t. Similar to how you can buy a Tesla car on a loan and still get the tax credit.
and actually with the loan, they clarify in the monthly payment wording that the lower payment is based on you putting that rebate back into your loan as a lump payment by month 18.

 

[wjgjr]

No it shouldn’t. Similar to how you can buy a Tesla car on a loan and still get the tax credit.
and actually with the loan, they clarify in the monthly payment wording that the lower payment is based on you putting that rebate back into your loan as a lump payment by month 18.

Correct - all that matters is that you own the system, which is why a loan qualifies you for the ITC but a lease does not (instead, the leasing company may be able to claim it.) The only thing to note is that it was mentioned that in some cases the amount being financed is higher than the cash price. If the contract includes fees related to securing the loan, it is likely that portion of the price would need to be excluded from an ITC claim. (And, of course, interest payments would also be excluded.)

 

[Notadog]

I see that there is an option now for a 10 year, 0.99% apr loan. I don’t quite see the 18 month requirement on the Tesla website but if it’s true, would the true cost of the loan be monthly payment * 12 * 10 + ITC credit?? Isn’t that a lot more than cash? Like potentially nearly $10k more?

 

[mully]

I see that there is an option now for a 10 year, 0.99% apr loan. I don’t quite see the 18 month requirement on the Tesla website but if it’s true, would the true cost of the loan be monthly payment * 12 * 10 + ITC credit?? Isn’t that a lot more than cash? Like potentially nearly $10k more?

Nice catch on the new 10 year / 0.99% option. I see they are requiring 10% down with this option. It also looks like they are requiring you to pay for the full amount versus the amount after federal tax incentives. With that said, the cost of the loan for a 12.24kW system and 3 PWs works out to be about $2200 for the 10 years.

I still do not my panels install scheduled. (This process has been taking forever.) I am wondering if they will allow me to switch over to this plan...

 

[Notadog]

Nice catch on the new 10 year / 0.99% option. I see they are requiring 10% down with this option. It also looks like they are requiring you to pay for the full amount versus the amount after federal tax incentives. With that said, the cost of the loan for a 12.24kW system and 3 PWs works out to be about $2200 for the 10 years.

I still do not my panels install scheduled. (This process has been taking forever.) I am wondering if they will allow me to switch over to this plan...

I also see the 10% down, but I no longer see any mention of the lump sum payment that you had to pay at the 18 month mark. So is the total that I would need to pay just the monthly payment * 120 + 10% down payment?

My install is in 2 days and my advisor still let me switch.

 

[bryan995]

Taking into account looming inflation. The 10yr at 0.99 is a no brainer. Even if sitting on billions in cash

 

[Jimmy209]

Just got off the phone with an advisor. I am waiting for city permits on a panel system install. If you were already approved with sunlight financial you cannot switch to the new Tesla loan. Even if your system has not been installed, that is what I was told.

 

[holeydonut]

Taking into account looming inflation. The 10yr at 0.99 is a no brainer. Even if sitting on billions in cash

IMO, if the interest rate is that low, make sure they're not baking finance charges in. Someone has to prop up rates out that low. The 10 yr treasury rate may be low, but it's still north of 100bps. I don't see Tesla giving up more precious margin for free since they're already operating at what seems like a loss on the solar-side.

Also, try to have capital still to pay off the loan balance if you ever try to sell or refinance your house. These solar loans and wacky liens on fixtures can be a big headache.

 

[Notadog]

The loans are financed by Tesla themselves. When I was looking at the terms, the financed amount was equal to the cash amount. Liens will only be on the solar equipment, not on the house.

 

[holeydonut]

The loans are financed by Tesla themselves. When I was looking at the terms, the financed amount was equal to the cash amount. Liens will only be on the solar equipment, not on the house.

Haha, looks like Elon is doing something with all that BTC profit.

I can't believe how many times I got asked for proof my solar was paid off during my refi. Like, wtf guys... they cared more about my solar being owned than they did about my wages and compensation.