Loans are a popular mechanism for financing solar projects. Solar financing companies such as Sungage Financial, Dividend Solar, Green Sky, Admirals Bank and Enerbank all offer various loan packages.
In a regular loan the homeowner pays none or only a portion of the cost of her project up front (the downpayment) and then pays the lender a fixed amount every month. The fixed payment includes principal and interest - similar to a mortgage. Here is how to model a regular loan:
- 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 Mortgage Style. 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 100%).
- Input your Dealer Fee, Interest Rate, and the Duration of the loan (we chose 14%, 4.9% and 300 months).
- Read the summary at the bottom of the pop up box to make sure your loan description is accurate. Click OK.
- Lock your immutable fields.
We highly recommend that you lock fields that will not change between different designs. This will save your team time and reduce errors.