Clean Power

Published on October 25th, 2013 | by Zachary Shahan


Home Solar Loans From Admirals Bank That Trump Solar Leasing?

October 25th, 2013 by  

As we’ve reported numerous times, in places where solar leasing is offered, the large majority of people who go solar decide to do so through the solar leasing model. There are various reasons for that*, but I think the biggest has got to be the $0-down or close-to-$0-down incentive. People don’t like putting their money into something up front — they’d often rather drag the payment process on for as long as possible, even if that means paying more in the long run (note: this is generally not my approach). The interesting news is that Admirals Bank is confident that it is offering an even better deal (nationwide) than solar leasing companies, while still not making you put any money down.

On its website, Admirals Bank notes that homeowners can borrow up to $40,000 for a renewable energy project. On that same page, it offers a table comparing solar leasing/PPAs to the purchasing of a solar system through Admirals Alternatives financing. Here’s the table:

solar leasing versus ownership

I was curious to find out a few more things about the home solar loans, so I called up Admirals Bank this week. Here are some more details from my call with one of the loan reps:

  • The loan is indeed available nationwide (something I hadn’t seen written anywhere on the website but had heard from a commenter).
  • The program has been in place for about 1 year.
  • To qualify for the $25,000 loan, you have to have a credit score of 650 or above. You also must have a debt to credit ratio of 45% or better.
  • There’s also the possibility of getting a $40,000 loan, but you must have a credit score of 700 or above for that.
  • No equity is needed to get the loan.
  • The interest rate on the loan is 4.95%.
  • The length of the loan is flexible, anywhere from 5 to 20 years.
  • The check is made out to you, the homeowner. Once receiving the money, you have 6 months to have the work completed. Someone will actually come out to verify that the project is completed once you say it is.

So, those are the details on Admirals Bank home solar loans. If I were about to go solar, I’d definitely do the math on this one and compare it to any solar leasing/PPA options or other loans that were available in my area. I’m sure it’s the best option for financing a solar system in many situations… perhaps yours?

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Related stories:

  1. 7 Ways to Go Solar
  2. How To Go Solar
  3. How Much Solar Costs In Your State

*There are other potential incentives to going solar through a solar leasing company — not having to worry about maintenance or monitoring and not having to deal with the tax paperwork, for example. Additionally, solar leasing companies can take advantage of some governmental incentives that you might not be able to take advantage of, and will presumably pass those savings on to you.

**Full disclosure: this article was not sponsored in any way. It came about through a tip from a reader.

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About the Author

is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.

  • Lee Chan

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  • Marion Meads

    Admirals Bank is to be avoided like the plague. My friend went to apply for a loan. First, off their definition of interest rate is different than the APR. If you have outstanding credit score, and you want to pay off the loan in 5 years, the interest rate is 4.95% but then the APR is 7.95%, and the APR is the basis of the amortization and not the interest rate!!! This is a bait & switch rip-off definition between Interest Rate and APR. A 20 year loan would get you an interest rate of 9.90% but the APR is about 13%!!! I can get better rates in credit card than these guys.

    At an APR of 13%, suddenly the terms of SolarCity becomes better. Admirals Bank is supposedly using government money for solar program as Home Improvement loan. In order to apply, the amount of paper work is the same as applying for a home refinancing, and sometimes even worse. They require tax returns of 2 years, W-2, pay-stub, your current mortgage payments, all your other properties. After gathering all your documentations and processing time of 2 to3 weeks, they will release the loan.

    I don’t get the logic of these banks. Why would you need inordinate amount of data and credit score, when you are faithfully paying your electric bills, and with solar, instead of paying the utility, you pay the loan, sometimes smaller than your electric bills if you properly designed the system capacity. This means that you already have the money source, instead of going to the utility, it goes to pay-off the loan. What they would need should be your electric bills and then the system capacity. If they matched, then there is no need for application that will require you to reveal all your finances. The banks could have the system as collateral. But if you have afforded paying your electric bills forever, there should be no reason to require documentations similar to home refi loans.

    And for how much loan, $10,000, max of $25,000. This is roughly the purchase price of cars, and you can get the car right away, within the hour, sometimes even less.

    The Admirals Bank is one BAD DEAL. Imagine if they hammer you with 13% APR, it would more than double the time to pay off the loan, and you may not recover your system financially.

    Feel free to email me Zachary, I can write more details about it. The APR will now be the bottleneck of mass solar adoption at zero down ownership.

    • David Galvan

      I am in the process of getting a home solar loan from Admiral’s. Here are the terms I’m getting, as of May 7, 2015:

      Amount financed: $20,811
      Total Loan settlement charges (cost of getting the loan): $1,474
      So total loan amount: $22,285 (to achieve $0 down).

      That is broken up into two separate loans: one to pay for the net cost of the system with 6.95% interest over 20 years, and the other to pay for the 30% federal tax credit portion at 0% interest.

      Title 1 FHA Loan: $16,041
      interest rate: 6.95%
      APR: 9.102%
      Term: 20 years
      Monthly payment: $138

      Piggyback same-as-cash loan: $6,234.30
      interest rate: 0%
      caveat: must be paid back in 18 months. (Basically, I get the federal tax credit next year, and use it immediately to pay off this interest-free loan.)

      Since my average monthly electrical costs over the past 12 months has been $178/month, this works out pretty well for me as I will be saving at least $480/year immediately. I can save even more money over the long term if I make some major extra payments to pay down the principal, but then of course I’ll develop a “payback period”.

      • Erik Evenson

        David, I am considering getting a solar loan and was wondering how your experience with Admiral’s was.

        • David Galvan

          Admiral’s was generally good, and everything shook out pretty much as I laid out above. It’s basically a “home improvement loan”, a second mortgage on your house, similar to what one would use to do a major kitchen remodel or something like that.

          One negative is that the vetting process for the loan was indeed a pain in the you-know-what. I mean, I went through the process of getting a home loan about 3 years ago, and a refinance on another property recently, and sure those were a pain. But the Admiral’s loan vetting process seemed even worse, and for far less principal money than those other loans were for. Just a lot of documentation of our tax returns, employment documentation, letters explaining the wording of our employment contracts etc. It all worked out in the end, but it did remind me of Marion’s comment above: Odd the amount of hassle, over a period of many weeks, you have to go through for a loan that is similar in principal amount to a car loan one could get inside of an hour at a dealership. Still, this period of hassle was not a deal-breaker for me, so while it was annoying, it ends and you don’t need to think about it after the loan goes through.

          On the plus side for Admiral’s: For me it came down to a choice between Solar City and Sungevity for purchasing a PV system using financing. (I knew I didn’t want a lease or PPA, due to potential issues when selling the house in the future, and I liked the idea of reaping the benefits of owning the system and getting “free electricity” after the loan is paid off, since they only expect the efficiency of the panels to degrade by 10% after 20 years.

          One difference was that Solar City handled the financing in-house, while Sungevity partnered with Admiral’s bank to handle the financing separately.

          More importantly, Solar City spread the financing over a 30 year period, while Admiral’s is over a 20 year period. The upshot is that the Solar City option, for the same 7.25 kW PV system, ends up costing over $18k more than the Sungevity/Admiral’s option. Specifically, going through Solar City would have cost me $51.8k over 30 years worth of monthly payments. Sungevity/Admirals will cost me $33.4k over 20 years worth of monthly payments. (That’s compared with a net cost of $15k for that system after federal and local tax credits and rebates, assuming I had $21k to plunk down to purchase the system outright upfront.)

          I raised this point to Solar City and asked why they thought their loan program was competitive given it costs the buyer over 55% more for the same product compared with Sungevity/Admirals?

          Solar City’s response was that those extra 10 years (30 year agreement instead of 20 year) include warranty and replacement of any faulty equipment (aka., an extra inverter replacement), and therefore that has some value compared to Sungevity’s 20 year agreement. But that argument didn’t hold water with me, considering an inverter replacement is probably going to run just a few thousand $, nowhere close to the $18.4k difference.

          So, that’s what drove me to choose Sungevity over Solar City: I will pay less for the same system, and own it outright in less time.

          And, as I mentioned in my previous comment, I’m saving about $40/month in my average electricity bill compared to not going solar, so my savings are “instant”.

          One more thing: Sungevity had excellent customer service. Very responsive and patient with the questions I had for them. Admiral’s was responsive and accommodating of my questions as well.

  • Ray Boggs

    $0 down solar loans have always trumped leases. And now that a complete, name brand, grid tie solar system with individual solar panel monitoring and shade mitigation can be installed for less than $3.00 a watt before any incentives, even prepaid leases and PPAs no longer make sense.

    Solar Home has been promoting $0 down solar loans for about a year now. We’ve created over 130 videos, built hundreds of websites tied to high relevance keyword driven domains and posted hundreds of comments on numerous websites and yet consumers are surprised to learn that such financing programs exist. It almost makes me think that some sort of information suppression campaign was active behind the scenes. Maybe the leasing companies train their sale teams to suppress or even deny the advantages of a solar loan versus a lease. Hmm….do you think so?

    The word is out, the “Pandora’s Box” of $0 down solar loans has been opened and there will be no turning back. The reign of the solar lease and PPA is now officially over and $0 down solar loans will now rule. Good by S.C. it wasn’t nice knowing you.

    • Sorry, am just seeing this. Thanks for doing that work — I haven’t seen it! I do think the solar leasing companies funnel people straight into the leasing option and bypass the loan option, but they obviously do a *really* good job of it. Not just 75% of California residents, but also huge companies like Walmart and GM choose the solar leasing/PPA route. I’d really like to find some legitimate explanation of advantages offered by solar leasing companies, but I haven’t yet… the biggest advantages are: they make the whole process simpler on the consumer (which is probably what sells their option 95% of the time) and they might be able to take advantage of some incentives the homeowners can’t (in some situations) — but whether or not those extra savings trump their profits and overhead seems highly questionable.

  • Marion Meads

    Zachary you forgot one of the very important caveat in solar leasing PPA. They include a mandatory inflationary price escalation of 5% to 6% per year. I have “applied” for leasing from the popular companies and I point to them that it is the deal killer for me. I have argued for a guaranteed 20% less rate than the yearly average utility rate and showed them that based on their projections (utility rates increases their prices faster than their inflationary adjustment price), they can earn more money from me. They said it is not their business model. I therefore suspect that their projected utility price increases are way over-hyped, that even after I showed them that it would truly be profitable for them based on their own assumptions. If they cannot trust their own assumptions and projections to depend upon, how would I trust them? As it is, they are only guaranteeing their profits. Considering now how the solar PV is eating the electric utilities lunches, and there will be competitive price wars, so it is looking to me that their projected electricity price increases, and hence the savings that they are showing you are over-inflated.

    The renewable energy loan from Admirals Bank would be excellent, but then you really have to shop around for installers. The algebra becomes simple. Is the retail value of the generated electricity from your installation greater than the finance charges and depreciation (or amortization) of your renewable project?

    It would be excellent if you can DIY, as in the case of solar PV. A DIY of 10 kW peak grid tied system for example would cost just about $1.50/watt and that includes the inverters, roof mounting, and payment to licensed electrician for connecting your installed panels to the grid via your main circuit panel, AND WITHOUT REBATES.

    So a 10 kW peak would generate in one year, about 16,425 kWH of electricity.
    If you’re composite tiered average is $0.22/kWH (ranged from $0.11 lowest tier to $0.47/kWH highest tier), it would have saved you $3,613.50 per year. A simple payback period of 4 years and 2 months. A 20 year project would have an amortization (principal + interest) of $1,182.95/year, and you are generating electricity three times that value. All without rebates

    On the other hand, if you contract out to installers, they would typically charge you $4/watt, and so you would need to maximize the loan at $40,000. For a 20-year term, that would be #3,154,54/year and you are still better off slightly because your electricity produced is about $3,613.5/year. Now if you shop around, you can get about $3.25/watt and apply all rebates, you can get this down to about $2.25/watt after rebates.

    Solar leasing will be guaranteed to have your rates increase, while if you pay off the panels as quickly as you can, you wouldn’t care about the rate increases after that.

    • Good comments. As far as shopping around for installers, Energy Sage provides an excellent service, and i imagine it will eventually cover the whole country:

      • Marion Meads

        Our local solar installer has quoted me $1/watt installation if i have purchased the system to be installed.

        Solar Home excellent grid-tied system sells for $1.71/Watt, and with the installation, this would come to about $2.71/Watt. With tax credit of 30%, the effective installed price would be: $1.90/Watt.

        • Nice. That’s amazing (by US standards).

        • mls4deals

          HI Please advise what state you are in and who you are getting those quotes from? My best quote in California is 3.45 a watt for solar world panels and 3.85 a watt for Sunpower panels.
          Thanks MLS

          • Marion Meads

            Prices are changing. Usually, you’ll get good price towards the end of the year when they clear inventories and the price could go down to about $1.65/Watt all materials included. Right now the prices are:

            $11,176.99 for a 4.75 kW Peak Grid Tied System

            Our local PV installer here quoted $4,000 to install the 4.75 kW system.

    • Mitchell B.

      If you would still like to go solar I can help you. I have a 0% increase option and should be able to do what you are asking. Of course this is assuming your electricity bills exceed about $150 per month. Are you with PG&E?

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