Financing Options, solar leasing, third party ownership model, REAP Programs Solar Leasing is an increasingly popular option for individuals and businesses that want solar on their roofs but do not have the means to purchase the system. A third party owns and installs the system, and has a (usually long term) agreement with the building owner regarding the cost for purchasing the energy generated. The third party enjoys the incentives and tax credits for the system, while the building (home) owner shows their support (literally) for clean and renewable solar energy.
While the net cost of solar electric or solar water heating is reduced by incentives and tax credits, only the Energy Trust and sometimes other local utility incentives are paid up front. This leaves the system owner writing a substantial check to the contractor. If your savings account isn’t quite up to the task, special equity lending programs are set up for renewable energy projects.
Solar Leasing is an increasingly popular option for individuals and businesses that want solar on their roofs but do not have the means to purchase the system. A third party owns and installs the system, and has an agreement with the building owner regarding the cost for purchasing the energy generated. The third party enjoys the incentives and tax credits for the system, while the building or homeowner shows their support for clean and renewable solar energy.
Umpqua Bankoffers the GreenStreet loan program (www.greenstreetloan.com) that reduces the many typical loan-related fees of home equity secured and unsecured loan programs. GreenStreet also allows the customer to pay their loan off early without a pre-payment penalty.
First Tech Credit Union(www.firsttechcu.com) offers its E3 loan program to credit union members. The E3 loan also has no upfront fees and can be paid off without penalty. In addition, the E3 loan allows the borrower to “carve-out” up to 3 amounts within the credit line that can be designated as term loans. A term loan is a loan that has a fixed interest rate and payment throughout the life of the loan. For example, a 10 year fixed rate and fixed payment, fully amortizing loan would be considered a term loan.
Unitus Community Credit Union(www.unitusccu.com) also offers a home equity secured line of credit that allows for a similar “carve-out” of a portion of the line amount into a fixed rate term loan. Each of these banks and credit unions will require that the customer have either adequate equity in their home to secure the loan or have documented cash available to pay an unsecured loan in full at any time.
It is great to see that there are financial institutions that are actively looking to promote the renewable energy projects of their customers and, in doing so, are helping to grow Oregon’s clean, green economy.
There are other programs and assistance available throughout the state. Be sure to check with your local municipality for any existing options.
Rural Energy for America Program - (REAP) offers grants and/or loan guarantees for the purchase and installation of energy efficiency improvements. Assistance is limited to small businesses and farmers and ranchers. Projects must be located in a rural area. REAP grants and guarantees may be used individually or in combination. Together they may finance up to 75% of a project's cost. Grants can never finance more than 25% of the project or $250,000, whichever is less. (The REAP program also supports renewable energy projects.)
State Energy Loan Program - The purpose of the Energy Loan Program (also known as SELP) is to promote energy conservation and renewable energy resource development. The program offers low-interest loans for projects that:
- Save energy
- Produce energy from renewable resources such as water, wind, geothermal, solar, biomass, waste materials or waste heat
- Use recycled materials to create products
- Use alternative fuels
The Energy Loan Program can loan to individuals, businesses, schools, cities, counties, special districts, state and federal agencies, public corporations, cooperatives, tribes, and non-profits. Projects must be primarily in Oregon.
Community Renewable Energy Feasibility Fund - The Community Renewable Energy Feasibility Fund, or CREFF, is a grants program that funds feasibility studies for renewable energy, heat, and fuel projects in Oregon.
The fund is administered by the Oregon Department of Energy with two goals:
- Encourage widespread adoption of renewable energy projects that reduce Oregon’s dependence on fossil-based energy sources.
- Promote sustainable economic development within the state.
The Emerald People’s Utility District (EPUD), which serves over 17,000 customers, initiated the Solar Water Heater Program in 1997. EPUD residential customers who switch from electric to solar hot water heaters are eligible for a $600 rebate, as well as a zero-interest loan. The rebate budget is approximately $18,000 per year. To be eligible for the rebate, participants must select an EPUD-approved contractor.
Qualified participants may also borrow up to $7,500 at 0% interest to cover any costs not covered by the rebate. The repayment period is three years (36 months) for loans of $1,500 or less, and up to five years (60 months) for loans of $1,500 to $7,500. EPUD screens all potential loan recipients. The loans are provided through a local credit union, with EPUD buying down the rate to zero percent. EPUD maintains a budget of $120,000 per year for its customer loans. To date, $350,000 in loans have been awarded to Solar Water Heater Program participants.
Salem Electric- residential customers participating in the WeatherWise, Heat Pump, Bright Way Solar or Photovoltaic programs are eligible for a loan with a 5% interest rate from a local bank.
Loan amounts range from $500 to $7,500. Customers participating in two or more of the eligible programs are eligible for a loan of up to $10,000. The loan term is 12 to 60 months, and there is a minimum payment of $25 each month. Solar water heating systems must meet the requirements of the BPA Bright Way to Heat Water program. Solar photovoltaic (PV) systems must meet equipment requirements established by the Oregon Department of Energy.
Customers can take advantage of the loan program or the Salem Electric rebate, but not both.
Eugene Water and Electric Board - EWEB's solar water heater program promotes the installation of energy-saving residential solar water and pool heating systems by providing customers with cash discounts and/or loans. Because a solar water heater’s effectiveness depends on proper installation, EWEB provides financial incentives only when a qualifying system is installed by an eligible program contractor. Please contact Energy Management Services at (541) 685-7000 for a list of eligible contractors.
City of Ashland Conservation Division - Ashland utility customers using electric water heaters may qualify for either a cash rebate of up to $1000 or zero-interest loan for installation of approved solar water heating systems. Call Larry at 552-2065 to schedule a free solar site analysis.
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