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Switching to solar

July 5, 2022

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Switching to solar

Financing a home solar project in Southern California

California is one of the best states for generating consistent solar energy. In fact, it’s one of the sunniest states in the U.S. with the most installed solar capacity of all 50 states. If you are a homeowner in Orange County or Los Angeles County who is considering going solar, we put together this quick guide to offer some tips and resources.

Why solar?

Southern Californians pay higher electricity rates compared to the national average, and those prices continue to rise. Depending on your chosen solar installation, you can offset up to 100% or more of your electricity bill with solar power.

If you have already considered taking steps to make your home energy-efficient in other ways, and you are interested in being energy independent while helping the environment, solar power may be worth looking into.

Learning about solar

There are many resources available to guide you in your decision-making process. The California Public Utilities Commission recommends that you read the Solar Consumer Protection Guide before you enter into any agreements with a solar provider. The guide includes step-by-step instructions on how to choose the right provider and what questions to ask.

Southern California Edison also offers several resources to assist you in your solar journey on their solar power page. If you’re a current SCE customer, it will be important to understand how your new net energy meter and energy credits will work.

If you’re ready to start shopping for providers, there are online marketplaces that allow you to compare offers. EnergySage is an online marketplace funded with grants from the U.S. Department of Energy, and SCE provides its own provider marketplace for its customers to browse.

Solar incentives

In addition to the environmental and energy cost benefits of solar, there are several federal and state incentives that you may be eligible for if you choose to install panels on your home.

On the federal level, you may qualify for the federal solar tax credit if you meet certain criteria. The tax credit is currently scheduled to end in 2023 unless congress renews it, so act quickly if you hope to take advantage of it. Discuss your options with your tax professional if you are interested in learning more.

In California, GRID Alternatives provides low to no-cost solar for families with limited or fixed incomes. And if you are an owner of a multi-family home, California’s Solar on Multifamily Affordable Housing program (SOMAH) offers incentives for eligible property owners who choose to install solar.

Financing solar

A Home Equity Line of Credit may be a good low-cost option for your solar project. With a Southland HELOC, you can enjoy a low fixed rate for the first five years of the loan, and a 10-year draw period with interest-only payments.

Another option available to you is a personal loan or line of credit. These loans require no collateral, and they offer a low fixed rate. You can use these loans for whatever you like, including financing your solar installation.

If you’re ready to make the switch to solar, there’s clearly quite a bit to think about before you start converting rays into energy. But one thing is certain; Members can count on Southland to help make their solar dreams a reality.

HELOC: *APR=Annual Percentage Rate. The initial interest rate is fixed for the first five years of the loan and then adjusts to the fully indexed variable rate at the beginning of the sixty-first month. Current HELOC Rate is based on Prime Rate + the margin (0.50% for up to 70% CLTV, 0.75% for 70.1-80% CLTV, and 1.75% for 80.1-90% CLTV). LTV = Loan to Value and CLTV = Combined Loans to Value, a ratio used to determine the equity available on your home. Other rates may apply based on credit.  Annual cap of 5% over fully indexed rate.  The rate cannot drop below 5.25% or exceed 15%.  The rate shown assumes that you have a FICO of 700 or above. Investment HELOC Rate is based on Prime Rate + the margin (1.75% for up to 70% CLTV). Other rates may apply based on credit profile. Prime is based on the Wall Street Journal Prime Rate + margin based on credit score. All HELOCs are variable rate loans. Rates can change monthly on the first of the month. Rate cannot change by more than 5% in any one year. 10-year interest only terms followed by a 15-year amortized payback period. Closing costs for the HELOC are currently waived (subject to change). $50 annual fee is waived on HELOCs with a minimum outstanding of $10,000 for 30 days during the year. Credit limit determined in part by the equity in the real property, which is used as security for the loan. Maximum loan amount is subject to credit qualification and appraised property value. Membership is subject to eligibility. Real Estate Loans are subject to credit approval. All new accounts will be verified through ChexSystems and are subject to credit approval and verification of equity. Rates and terms are subject to change without notice. Early closure cost reimbursement may apply— If the HELOC is paid off and closed during the first 3 years of the loan, you will be charged a $750 early termination fee to reimburse Southland Credit Union all third-party fees incurred at closing. NMLS #685526. Mortgage interest tax deduction may be subject to income restrictions. Consult a licensed tax advisor regarding your ability to take this deduction.

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