| Mortgage Financing for Renewable Energy Systems |
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| Written by Admin | |||
| Monday, 13 October 2008 01:00 | |||
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Renewable energy at home sounds great to many of us. Problem is, the price tag can be tough to swallow. When we worry about financial security, who can take $5,000 - $30,000 out of savings to install solar panels or a small wind turbine? One option is renting. Some companies offer solar panel system rentals. They make money when you pay more in rental fees than they spend on manufacturing & installing your system. You get the renewable energy, but they get the financial benefit. If you want both financial gains and renewable electricity, the best answer can be mortgage financing.
With the current financial climate, we are smartly developing a distaste for debt and loans. However, when done conservatively, home loans are a smart investment and so are renewable energy systems. Several government mechanisms are available to provide consumers with low rates, generous terms and even rebates on renewable energy financing, and mortgage interest is generally tax deductible. A great way to finance renewable energy systems is by connecting the costs to our homes. Just like a house, renewable energy systems last longer than most will own them. They will continue to produce electricity for 25+ years. By purchasing a renewable energy system as part of a home mortgage, you can spread those costs over a 30- or 15-year mortgage. Mortgage payments will increase but utility electricity bills will drop. When done right, your monthly utility bill savings will be greater than the increase in your monthly mortgage payment. That means you spend less on energy and your monthly payment goes towards ownership of a renewable energy system, not to your utility company’s ownership of their power plants. Mortgage financing for renewable systems also ensures that if you live in a home for 10 years, you only pay for part of the renewable system. Depreciated costs (and future benefits) of the remaining 15+ years of system production are passed on to the next home buyer. Homeowners also benefit from the security and dependability of their own renewable energy production. With rapidly growing world energy demand, political instability in oil producing regions and pollution cap & trade systems on the horizon, the cost of energy will only increase in the long run. Owning your own energy is an excellent way to protect yourself from these uncertainties.Â
If you like the sound of mortgage financing for renewable energy system purchases, here are some options to consider:Â HOME MORTGAGE LOANS Primary Mortgage: Adds renewable system costs to your mortgage when you buy, build or refinance a home. Home-Equity Loan: Uses the equity in your home to finance your renewable system purchase.
SMALL BUSINESSES SBA loans and conventional bank loans are an option for small businesses, but renewable system purchases may be best financed through the business’ existing funds for capital purchases. Small-business incentive programs can also be found at www.dsireusa.org. Â
Links and information about renewable energy loan programs from different institutions are included below: Freddie Mac Support for Energy Conservation: freddiemac.com All single-family mortgage products allow borrowers to finance energy improvements and qualify for larger loan amounts based on the calculated energy savings. This permits the lender to add the cost of energy improvements to the purchase price of the house when setting the terms of the mortgage. FHA Energy Efficient Mortgages: www.fha.com/energy_efficient.cfm The Energy Efficient Mortgage Loan program helps low- and moderate-income homeowners incorporate the cost of energy efficient improvements into their new home or existing housing as part of an FHA insured home purchase or by refinancing a current mortgage loan.  GE Money: http://www.gemoney.com/en/business/Markets/Home_Systems/index.html Clean Power Finance: www.cleanpowerfinance.com Meridith Capital Group/SunWize: http://www.mcgmortgage.com/Solar.html Sharp - CitiMortgage Solar Loan Program Wells Fargo Solar Rebate Program: www.wellsfargo.com/jump/home_equity/solar First Again Solar Financing: www.firstagain.com U.S. Dept. of Agriculture (USDA): www.usda.gov Veterans Administration: www.va.gov/vas/loan/lenders.htm U.S. Small Business Administration (SBA):  www.sba.gov Database Of Incentives For Renewables & Efficiency:  http://www.dsireusa.org/ U.S. Department Of Energy Solar Energy Technologies Program:  http://www1.eere.energy.gov/solar/ CalFinder Solar Loan List: http://solar.calfinder.com/blog/solar-information/10-solar-lending-programs-in-10-locations/ (For Residents of California, Washington, Colorado, Pennsylvania, New York, Oregon, Orlando, Florida, and Vermont)
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