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Cash Poor Financing: 0 Down


In Part One of Cash Poor Richard, I told you about a solar lease program that’s similar to a car lease, with no money to pay upfront, and an option to buy after 15 years. Combined payments targeted to be cheaper than your current electric bill.

In Part Two , I told you about Power Purchase Agreements (PPA’s), where you don’t actually own the solar panels on your roof. Instead, you pay a small upfront fee and then pay the PPA company a fixed electric rate that hedges you against rising electric rates for the next 15 to 20 years.

Part Three: $0 Down Financing through a bank.

I have to say that this is probably the best options of the three outlined so far. Several solar companies have this program, offered through Clean Power Finance. The biggest installer offering this deal is Akeena Solar, a California company. But I don’t see why you couldn’t contact Clean Power and get the same with another installer. (You could also try a traditional second mortgage through your bank or an energy efficiency mortgage.)

Here’s the deal, and it’s really spectacular, as far as I can see:

  • Fixed rate loan, right now from 6.74% to 7.24% fixed. Not bad. Better than a credit card.
  • No income verification for loans up to $40,000.
  • Bank pays all loan fees.
  • You can pay it off any time.
  • Bank takes second lien position on your home (i.e., a second mortgage).
  • For some applicants, you can also get an unsecured loan, but then you don’t get the tax write off of the mortgage.
  • Terms up to 20 years.
  • Did I mention that it was no money down?
  • Of course, you have to have good credit.
  • Got to live in California or Texas.
  • Have to have at least 10% equity in your home and a decent debt to income ratio.
  • I’ll say it again: No moula down. Lower than your current electric bill. No brainer. Did I say that out loud?

The great thing about this financing is that YOU get the benefit of the full rebate, the tax credits, and the “green tags/RECs,” (sort of like carbon credits, which may be valuable some day.)

In addition, the solar installer should be able to show you how your loan payment will be less than your current electric bill (only a little more, and then lower as electric rates rise–and they will.) That means you’re saving money close to day 1. And after you’ve paid it back in around 12 years, heck, you’re making money, compared to what you would have been paying to elctric company. Keep in mind that solar panels are generally warrantied for 25 years, but usually go for 30 years or more.

There is one more option that may be even better than this one. You have to live in Berkley, California or Palm Springs, CA. But that may be changing very soon… See Part 4.

Last modified: December 18, 2015

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