Solar Finance Fees When Buying

A good thing to inquire about when buying solar is what type of financing fee you will be paying. Why is
that important? Well, for a couple of reasons. One, without question, the seller of your system is simply
passing that cost onto you. Two, often times, the seller has a reserve account into which it must pay (a)
until it has written enough business with the lender or (b) to cover past solar deals that have gone
haywire. Typically, a finance fee is about 15%. So, if you purchase a $35,000 solar system, $5,250 goes
right to the lender for the privilege of writing your business. Candidly, there is no reason why you should
ask for anything less than a 10% reduction if you are paying cash for your solar system.

Let’s delve deeper into this reserve account scenario. Solar Watchdog is aware of solar companies out
there that pay upwards of 22% in finance fees. That means that you – the consumer – are paying for
that company’s past mistakes. Now, 15% is a fair number for a finance fee; but, 22%? That means that
your loan cost you an extra 7% because the company trying to sell you a system has so many customer
complaints that it has to pay extra dollars to cover its past mistakes. Routinely, solar companies
overpromise how much a solar system will produce. They offer radiant barrier, insulation, LED light
bulbs, windows, thermostats, home monitoring systems, or some other energy efficiency product; but,
none of those products have a huge impact on your electric bill. Yes, all of them reduce energy
consumption, but not enough to make up for the overpromising/underdelivering. That means that there
are LOTS of consumers out there who were promised that the 6 KW system they purchased, and the LED
bulbs and radiant barrier thrown in for good measure, is going to take that 1600 average monthly
kilowatt consumption down 80%. When it doesn’t happen, consumers get upset and complain to their
lender, the company, the Attorney General, attorneys, anyone who will help them. Lenders don’t want
to be involved in a customer dispute; so, they often suspend the loan payments until the matter is
resolved. If the matter is bad enough, the lender makes the solar company buy back the loan. That is
expensive and companies cannot afford to do that; accordingly, for all new business, the solar company
with lender complaints has to pay extra finance fees on new business to cover old losses. In other
words, you are paying for their past and existing consumer complaints.

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