A single payment loan is a popular mechanism for financing part of the cost of a solar installation. Solar financing companies such as Sungage Financial, Dividend Solar, Green Sky, Admirals Bank and Enerbank all offer various loan packages. This type of loan is also referred to as a "bullet," "bubble" or "balloon" loan. Here is how to model it:
- Go to your account Settings. Click on Financing Templates then Create New Template. Give your template a descriptive name that you will later be able to understand.
- In the 'Basic Information' section, click on Loan.
- Click on the pencil icon to input your 'Project Useful Life' and your 'Discount Rate' (we chose 25 years and 3.0%).
- Input your 'Degradation Factor', 'Inverter Replacement Cost' and 'Inverter Life' (we chose 0.5%, $.35/W and 13 years).
- Input your tax rates (we chose 0%). Please contact a tax attorney for more information on whether your solar project's returns should be taxed. In our experience, in the US residential solar returns are never taxed.
- Add your Incentives.
- Click Add Loan and select Bullet. Give your loan a descriptive name that you will later be able to understand.
- 'Principal' percentage should be: 100% - Down Payment%. So if the homeowner is putting no money down, this should be 100%. If the homeowner is putting 20% down, this should be 80% (we chose 30%).
This is usually set to 30% in order to match the Investment Tax Credit.
- Input your 'Dealer Fee', 'Interest Rate', and the 'Duration' of the loan (we chose 4.5%, 0% and 12 months). Click OK.
- Lock your immutable fields.
We highly recommend you lock fields that will not change between different designs. This will save your team time and reduce errors.