u/jordankglean

We are currently seeing a ton of homeowners with "0% solar financing" offers who assume it actually means free financing so I wanted to provide some more context. The reality is that private lenders aren't lending money for free!

In most cases, the financing cost is recovered through:

• Dealer fees - The lender charges the installer a dealer fee (which can be 25–35% of the loan amount). That cost is often just passed on to the homeowner via a higher project price.
• Promotional rates - The 0% or low interest expires after a few years then the homeowner has to refinance at a much higher rate (often 10% or higher).

Red flags to watch out for:

• Emphasis on monthly payments - Focusing on "$X per month" distracts from the total amount you ultimately pay.
• Time-sensitive offers - Statements like "This promotion ends this month" or "You need to sign today to lock in this rate" can discourage homeowners from getting additional quotes.

A few questions worth asking:

• How is the lender making money?
• Is there a dealer fee? If so, how much?
• What interest rate applies after the promotional period ends?
• What is the total amount I'll pay over the life of the agreement?

Alternative financing options:

• Cash purchase
• Home Equity Line of Credit (HELOC)
• Adding the cost to a mortgage renewal or refinance
• Municipal financing programs
• Delay the project until better financing is available

To be clear, this doesn't mean all solar loans are bad and it certainly doesn't mean solar is a bad investment. Many installers are very transparent about the financing they offer.

The key is understanding the financing before you sign. If you're considering solar, take your time, get multiple quotes and make sure you understand exactly what you're agreeing to.

Full disclosure I work for Glean and we review 1,000's of solar quotes each year which is where these insights are coming from.

The article is paywalled but here is the new program they reference:

A new home solar accelerator program, run by The Atmospheric Fund (TAF) and Toronto Hydro, offers a free “solar coach” to help stickhandle the permits and bureaucracy and provide contacts for vetted contractors to do the work.

“Getting solar is complex and confusing,” said Chris Caners, TAF’s director of electrification. “So we’re offering a personalized concierge service that will help homeowners understand the type and size of the system, the different incentives that might be available, and we’ll even go out and solicit quotes.”

“We’re trying to make the system work more smoothly for all players — the homeowner, the utilities and the installers, so we can increase the amount of solar across the GTHA.”