Save Some Green When Going Green
If you are a current or soon-to-be homeowner, you may already be aware of the benefits of using solar energy for your home. Not only is the upgrade good for the environment because it lowers your carbon footprint, it can also save you money on your monthly electric and heating bills. A major downside though, is the upfront cost. The installation and the solar panels themselves can end up costing a pretty penny. However, there are ways to help combat these high prices: solar energy loans.
But what are these loan programs, and what do they cover? Here are five different financial options that can save you money on solar panels for you home.
SEE ALSO: 3 Ways To Determine If Solar Panels Are Right For You
1. PowerSaver Loan
One type of loan you can choose to help finance the purchase of solar panels is a PowerSaver loan. Backed by The Federal Housing Administration (FHA), this low-cost loan is offered to homeowners wanting to install energy efficient improvements or upgrades.
So, not only will the loan cover solar panels, it can also be used toward energy efficient doors and windows, water heaters, HVAC systems, and insulation.
Although there are three PowerSaver loan options available, there are only two choices that will cover enough for the installation of solar panels:
- PowerSaver Second Mortgage: providing up to $25,000, this loan is available for borrowers who do not currently have a second mortgage, second lien, or existing home equity loan. Interest rates tend to range from 4.99% to 9.99% for up to 20 years.
- PowerSaver Energy Rehab: also known as a 203(k) PowerSaver loan, it is intended for home buyers wanting to combine energy efficient improvements with a home purchase, or homeowners wanting to include the improvements with refinancing. As long as at least $3,500 of the improvements consist of eligible PowerSaver measures, the loan will be FHA-insured up to 100% for a home purchase or refinance plus the cost of the improvement project.
2. Energy Efficient Mortgage
Another FHA program intended to help homeowners and homebuyers finance the purchase of solar panels and other energy efficient products is the Energy Efficient Mortgage program (EEM). This program allows those buying, selling, refinancing, or remolding their home to pay for energy saving improvements through their mortgage. Anyone who qualifies for a maximum FHA insured loan will be eligible for the EEM.
Benefits of EEMs can vary depending on the energy efficiency of the new or existing home, which is determined by a home energy rating system or an energy consultant.
3. State Backed Loans
There are also state loan programs available to current and potential homeowners to help with the costs of renewable energy resources like solar panels. Most states offer their residents at least one low-interest loan that will finance the purchase and installation of energy efficient systems and products,
and the terms will vary from state to state.
Oregon, for example, offers the State Energy Loan, which typically ranges from $20,000 to $20 million, for projects that save energy, use recycled materials and alternative fuels, reduce energy consumption, and produce energy from a renewable resource. New Yorks Home Performance with ENERGY STAR, on the other hand, offers small loans from $1,500 to $25,000, plus a 10% discount on eligible energy improvements (up to $3,000), but only to residents who use certain utility providers.
4. Solar Loans
There are also solar loans available, which are loan programs intended specifically for financing the purchase and installation of solar panel systems for your home
. Solar loans can be provided by certain banks (both local and national), credit unions, solar panel manufacturers, specialty finance companies, national and private lenders, and even utility companies. These loans will also vary in terms depending on the provider, so its important to shop around and compare rates if you want to find the best loan for you.
SEE ALSO: Creating Green Homes: The 5 Step System
As an added bonus, some government agencies and utility providers often offer rebates, tax credits, and other incentives for using renewable energy resources
. So, no matter how you choose to finance your solar panels, theres a chance youll be able to get money back on the deal.
In any case, if you are interested in going green and investing in solar panels, make sure you research all the financial programs available to you
. Taking the time now can end up saving you a lot of money and energy in the future.