Evaluating the Risks and Rewards of Solar Energy Financing
Evaluating the Risks and Rewards of Solar Energy Financing
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Consumers who are seeking out contractors to work on their solar energy projects often have big ideas but they aren’t as well-versed on the actual costs associated with having solar installations performed on their homes or businesses.
The real cost of a solar project may have those same consumers thinking twice about converting to renewable energy because they simply don’t realize how much solar panels cost before they start shopping around to hire the right solar installer to do the work.
Even though there are financial benefits and tax benefits for homeowners to embrace solar technology, the expenses associated with these conversions are sometimes out of the consumer’s budget. The solution to that problem is identifying solar lenders who are willing to work with the consumer to help him or her get the money they need to pay for the job.
Where does that put your solar installation business? In the unfortunate position of waiting to generate revenue that helps you expand and grow your business. Solar loans through traditional financial institutions can take time to get approved and the costs associated with submitting and processing applications can leave the customer spending more out of pocket than is necessary. Home equity loans also take time and the customer’s credit score is a major contributing factor to an approval or a denial of the application.
Converting to solar power shouldn’t be that much of a hassle and your solar business can help homeowners avoid these barriers to conversion with solar financing options through Fund My Contract.
Solar Financing and the Risks to Business Growth
Consumers who want to install solar PV systems can hire your solar business when they want to have the work performed. Right there, on the spot, at the time you provide them with an estimate for the cost of the solar panels and the labor, not at some undetermined time in the future that may never come to pass.
That’s because you can offer solar financing through Fund My Contract. Our network of third party lenders have some of the most innovative financing programs throughout the solar energy market. Customers can become hesitant when they are presented with the realistic upfront costs of installing solar panels because most solar installers expect them to pay the full amount in one lump sum at the time of the transaction.
Paying all at once is the most common reason why a homeowner elects to wait until a later date to engage your services. He or she may decide to shop around for a better price, sometimes to the detriment to the quality of the work or wait until the cost of the solar equipment can fit in their budget.
But the problem with that situation is that you don’t know if or when the homeowner will ever return to hire your business. You’re assuming a rather significant risk to the future of your business. How many times do you need to take that same risk with one potential customer after the next before your solar installation business starts to suffer?
When you offer solar financing you are not only making it easier for your customers to hire your business but it takes the financial burden off their shoulders by giving them options on how to pay for the work they need. Sure, they’re all for reducing their monthly electric bill but the idea of paying for the work over a series of fixed monthly payments gives them more spending power and makes the work more affordable to fit easily in their budget.
The Rewards of Offering Financing
Working with Fund My Contract puts your business in a position to succeed by providing your customers with more choices when it comes to paying for the solar panels they want to install on their homes. Affordability is the name of the game and you can provide the access they need to own the systems they want installed. Unlike solar power purchase agreements, where the customer avoids upfront costs but ultimately doesn’t own the system he or she is having installed, your solar business can work with the customer who wishes to own the solar panels that he or she is hiring you to install.
The Fund My Contract network of third-party lenders is ready to help you offer your customers the financing they need so that your business can generate income that makes it easier for more robust expansion on your timetable, at your expectation for success. Offering financing to your customers is designed to help your business compete in a crowded marketplace while enabling your customers to access the financing programs that make solar panels an affordable alternative for energy. We don’t charge high merchant fees and the costs to the customer to access financing are ultimately determined by their eligibility for participating in the programs you choose to offer.
Working with our lenders allows you to establish a menu of financing options that the customer may select from when he or she decides that financing is a more viable choice for moving forward with solar energy deployment in his or her residence. You can design the programs to best fit the needs of your customer base. Some customers may want a program that comes with fixed monthly payments, other customers may want more flexibility in the time it takes to repay the amount being financed. There may be customers who would prefer to take advantage of a promotional interest rate that reduces the costs of financing and you can extend such an offer to customers who qualify for that lower rate.
The Fund My Contract model for solar financing also gives more customers the ability to access the financing programs that you offer because the approval criteria works a bit differently with our third party lenders. Credit score is only one component of the customer’s overall financial picture. Credit history is included along with debt-to-income ratio, annual income, current employment status, employment history, amount requested for financing, and other factors all play an equal role in the approval process of a customer.
This helps more customers get approved and more approvals means more sales and higher revenue for your solar business.
Best of all, when the customer’s application is approved by the lender and the funding is processed, your business gets paid in full, upfront, for the goods and services that your business is providing to the customer who may be paying for the work in monthly installments, but your business receives the full amount when due.
It’s also important to note, that funding can only be spent purchasing your products and hiring your services, it cannot be spent with any other merchant, retailer, or contractor. Simply put, if the customer decides not to move forward with the work they’ve applied to have financed through your program, the application is canceled.
Risk vs Reward - Fund My Contract Makes it Easy
Risky is waiting for your customers to make payments on overdue invoices and chasing after unpaid service orders. Risky is watching customers walk out the door wondering if or when they’re going to return. Risky is not generating revenue and slowing the growth prospects of your business.
Why not reap the rewards of financing instead? Make it easier for your customers to say yes and hire you on the spot. Make it easier to generate income and protect your company’s bottom line by improving the affordability of your solar prices and giving more customers access to your high-quality solar installation services.
Weigh the risks versus the rewards, then call Fund My Contract. Speak with one of our solar financing experts to discuss how our network of lenders can boost sales and increase revenue to make it easier for your business to expand and grow.
Why wait? Get started today.
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