Solar Financing and Loans

Special financing and loans are available for individuals and businesses that have an interest in going Solar. The following is an excerpt from an an extensive PDF document prepared by the U.S. Department of Energy. entitled “The borrowers guide to financing solar energy systems”

Introduction with a link to the PDF.

Using solar energy systems to provide heat and electricity for the nation’s buildings helps to conserve our fossil fuel resources and reduce our reliance on imported fuels. Because solar energy systems do not emit harmful pollutants, they also help protect the environment.

The Borrower’s Guide to Financing Solar Energy Systems: A Federal Overview provides information that can assist both lenders and consumers in financing solar energy systems, which include both solar electric (photovoltaic) and solar thermal systems. This guide also includes information about other ways to make solar energy systems more affordable, as well as descriptions of special mortgage programs for energy-efficient homes.

Although the sun’s energy is free, special equipment is needed to convert it to electricity or heat for a building. The up-front costs of this equipment can be daunting to consumers and a barrier to new purchases. Therefore, this guide was prepared to show how today’s solar energy systems can be affordably
financed.

Financing resources for solar energy systems include Fannie Mae, the Federal Home Mortgage Loan Corporation (“Freddie Mac”), and the U.S. Departments of Agriculture, Energy, Housing & Urban Development, and Veterans Affairs. U.S. Environmental Protection Agency and U.S. Small
Business Administration programs are also included. See the quick-reference chart that follows for summaries of the programs administered by these organizations.

Following the chart are brief descriptions of today’s solar systems and more detailed descriptions of the financing programs. The glossary at the end of this guide contains definitions of some of the special solar energy and financing terms used here.

The second edition of this guide includes updates on several of the financing resources summarized here, such as Fannie Mae and Freddie Mac. It also includes some additional sources of information.

Funding Resources:

Agency Program Loan Amount Federal Home Mortgage
Loan Corp. (Freddie Mac)
www.freddiemac.com
Conventional mortgages Up to $240,000

U.S. Dept. of Agriculture
(USDA)
www.usda.gov

Rural Housing Service,
Rural Business-Cooperative
Service, Rural Utility Service
$300,000
(average)

U.S. Dept. of Energy
(DOE)
www.doe.gov
Energy Savings Performance
Contracts, State Energy
Conservation and
Weatherization Assistance
Varies

U.S. Dept. of Housing
and Urban Development
(HUD)
www.hud.gov

Energy efficiency mortgages
for FHA 203(b) and (k)
insurance programs, etc.;
special HOME, HOPE VI,
and Title I programs for
energy efficiency and solar
systems (with limits)
HUD area limit

U.S. Dept. of Veterans Affairs (VA)
www.va.gov/vas/loan/
lenders.htm

VA Home Mortgage Loan Program
Up to $203,000
U.S. Environmental
Protection Agency (EPA)
www.epa.gov
Energy Star-Rated Home,
Energy Star-Rated Building
Guided by Fannie
Mae and Freddie
Mac limits
U.S. Small Business
Administration (SBA)
www.sba.gov
7(a) Std Small Bus. Loan,
7(a)-12 Energy Loan
Program, 7(m), etc.
Up to $750,000
guarantee (7(a))

Fannie Mae Corp.
www.fanniemae.com
(a) Conventional mortgages;
(b) Residential Energy
Efficiency Improvement
Loans
(a) Up to $240,000;
(b) up to $15,000

For additional information visit: http://www.nrel.gov/docs/fy99osti/26242.pdf