Expect solar companies to get more creative about financing
Earlier this year, I felt twinges of worry over whether or not the flagging economy would cause businesses to back off commitments to green technology investments. Now, I'm feeling sharper pangs of doubt over whether consumers and homeowners will be able to find the money to install solar panels or make other green technology investments that might hurt right now, but turn out to be money-savers over the long term.
One bit of good news did come in the form of the 30 percent federal tax credit that applies to solar installations. Not only did Congress FINALLY pass this extension, but they also removed a $2,000 cap that applies to the credit. The move was the talk of San Diego, where there was a solar power conference this week. This story does a nice job of capturing the mood.
When I think about the solar power installations that I've written or read about in the past few months, one trend that seems to be fairly common is the practice of leasing to get these projects off the ground. Companies are offering up their roofs and parking lots to solar installers, who finance the installations at their own cost; they get a guaranteed rate and the solar guys get some real estate. My brother in San Jose is considering a similar sort of lease-to-own type of arrangement.
My bet is you'll also see the financing companies get creative about encouraging these investments, despite the credit crunch that's making the lending environment more cloudy. One quick example is the incentives and extra benefits being offered by FirstAgain for residential clients that are looking to fund solar installations.
The lender is offering a promotion through the end of the year that will reimburse qualified customers that are qualified with loans of at least $10,000 with up to $250 to replace their incandescent light bulbs with compact fluorescent light bulbs (CFLs). If you're already progressive enough to have CFLs, you'll get a $100 "paperless" gift card from Green Home Environmental Products. Finally, FirstAgain will have a tree planted through American Forests for every unsecured personal loan that it funds.