hey guys how you doing my name is julian
here in san diego with all tech solar
and today
i'm going to be pulling the curtain back
on solar financing and exposing all of
the things that
most solar companies don't want you to
know and i'm going to be doing it all
in colorful board shorts to prove to you
that the guys in suits aren't actually
always the smartest so
let's get started this video is
essentially labeled the higher interest
rate is cheaper
and that's really what i'm going to be
explaining today how these higher
interest rate options are actually
way better for the customer less
expensive most of the time
and protects you against an early payoff
i hear
all the time about you know these point
nine nine percent one point nine nine
percent
uh interest rate loan options for solar
and i have to explain
how they're actually achieving this
artificially low bot down rate
every single time so i decided to make a
video that just made it extremely easy
to understand
and you will not be confused or get
taken advantage of when it comes to
financing your solar system all right
guys so let's dive right in
so what i'm going to be going over today
is explaining
how these financing companies are giving
you a .99
a 1.99 why sometimes you see a 6.99
and why they're all over the place you
know let's say you have um you know a
tier tier one credit you know like 720
or above
and all of these different lenders are
giving you all these different rates
and on top of it the prices are all over
the place so it's so hard to figure out
you know a true apples to apples
comparison or you know really process
and compare and figure out which one's
best for you so
i'm going to make this uh really easy to
understand and
after this quick video you're going to
totally get it and be able to analyze
your quotes
with that being said if you are in the
san diego area or
anywhere else in the country but mostly
san diego give me a call
we can you know skip all the bs and just
help you get a really
solid system that makes sense for you uh
with with no salesy gimmicks along the
way
all right so let's explain there's a
cash price
and then a financing price most of the
time and
you're probably wondering why is the
financing price more
okay so in this example um for all three
different financing plans we're gonna be
dealing with a seven kilowatt system
that the cash price is twenty thousand
dollars this is before
the tax credits so really it's going to
be uh 74
of 20 000 as the net cost which is 14
800 but that's besides the point so
we're going to be talking about
financing so
with this first option here you see that
the interest rate's 5.74
and the amount that you finance is
twenty thousand dollars
note that this is the same as the cash
price so you're not actually financing
any more money than what the actual
contract is for
and because of that you have a true
interest rate you're going to be
borrowing money
for 12 years and someone has to make
money you know
for you borrowing it so that interest
rate at 5.74
is how they're gonna do that now your
payment in this
um in this scenario like i said before
you do any type of
tax credit pay down this is you
pocketing the tax credit completely
you're going to have a payment of 189
dollars for 12 years
and 51 dollars of that payment is going
to be going towards interest
okay so just try to keep that in the
back of your head now let's go to option
two
you can see the interest rate's better
it's a 2.74 percent
obviously better than a 5.74 percent
but uh the prices is twenty two thousand
two hundred dollars
now where's that two thousand two
hundred dollars coming from
well you're actually buying down the
rate
and the company that's selling you the
solar isn't really telling you that
and the payment's 181 dollars so it is
actually eight dollars a month or less
um
but you have to finance uh 2200 more
uh now let's go to the third example now
we have a 0.99
interest rate so even better but you can
see that you have to finance
24 000 so an extra four thousand dollars
and buy down fees
now the payment's 176 so it actually
does come out to be a little bit better
as far as the payment goes
but here's the thing most people
do not take the entire term to pay off
their solar
the average person in california moves
every six or seven years
and at that point in time these loans
are paid off most of the time
and and the debts cleared that way the
the new buyer can be entering
basically the home with a paid off
system and so
what happens in these different
scenarios if you don't take the full 12
years let's say
you put the solar on and three years
later someone's going to get
you know someone's getting a new job and
you're going to move put the house up on
the market
which interest rate or plan would you
have wanted to go with
well you're actually going to
hope that you're going to be in this
plan right here because
obviously you know every month you pay
down a little bit more
of the principal that principal amount
is less
and your payoff amounts less now unless
you're
using the full you know 144 payments
this 176 dollar payment is not going to
save you any money and in fact it could
cost you money
because really what you're betting on is
with your choice of financing is how
long the debt
will be outstanding because it's very
obvious that if you only pay
two or three years your your principal
payoff amount
is going to be several thousand dollars
less and your whole solar system is
going to have cost you
quite a bit less than if you know three
years later you have to
pay off this system and now essentially
you know even though you saved
all of uh 12 a month for a few years
12 a month times 12 144 a year
let's say it's three years um it's going
to be less than 450
that you save in payments but your
principal payoff
is going to be probably like 3 000 or 3
500
more still at that point all right so
what i did here was i
accelerated our timeline three years and
i assume that something is happening and
the family is moving putting the house
up for sale and they're going to have to
pay
off their solar loan that they've only
had for three years so
let's figure out which plan actually
helps them
the most so that really high interest
rate that a lot of people
initially were thinking i don't want to
pay 5.74 percent
is actually the cheapest and here's why
so you've spent you know in three years
six thousand eight hundred and four
dollars in payments
the remainder is 15 032 for the payoff
tax credit and i am including the tax
credit now in these finalized examples
because i know somebody is going to say
oh but the tax credit's bigger you know
on the
the systems with the buy down because
you still get 26
back of the fee so i included the larger
tax credit in to make it uh
really as as fair as possible but at the
end of the day
the total amount that you know they
would have paid um in this scenario is
16636
same same thing up here they pay a
little bit less over time you know in
the payments
but their payoff is a little bit higher
the tax credits a little bit more but at
the end of the day
17 430 is about 800
more expensive than the first option and
down here
same thing they spent six thousand three
thirty six over three years
the remainder is over eighteen thousand
the the tax credit is
a little over six thousand dollars which
is great but at the end of the day
they would have paid over eighteen
thousand dollars now if we fast forward
this
another few years and we reach around
year eight year eight is going to be
approximately when the crossover occurs
for when this payment down here even if
you did have to pay it off at eight
years
still becomes a little bit less but
you really only have a couple years
after that eight years
goes on to differentiate how much more
this payment is going to save you so
statistically speaking most people
are going to fall in the range of having
to pay off their system
where this higher interest rate
is actually going to save them the most
amount of money
not every time and of course it is
impossible to always predict the future
but like i said in california
statistically even when people think
they're in their forever home six to
seven years later they move and so what
you want to do is set yourself up to
where
you know when you're getting out of that
sale
setting yourself up in a way to where
you're going to leave
and extract the most amount of money out
of that sale and so that's hopefully
what
you learned here once again my name is
julian with alltech solar here in san
diego
please reach out to me for a quote
760-473-5878
we can do it all over the phone if
that's easiest for you in person is
great as well
and like i said with me you're not going
to get any bull you know bs
sales fluff no gimmicks talk to you soon
thanks so much