I was skeptical about the Mass Solar Loan when it was first announced by the Clean Energy Center and the Department of Energy Resources. The loan program, intended to replace the Commonwealth Solar II rebate, had been delayed and delayed again for nearly two years. In the meantime, many strong solar loans emerged to fill the void. Was the Mass Solar Loan even needed, I wondered?
But since its launch in fall 2015, about a dozen banks have signed on to provide state-backed, low-interest loans to people wanting to go solar. Unlike many solar loans, this one is available to people with moderate or low credit scores, making solar accessible to even more residents of the Commonwealth.
According to May 23 data from the Mass Solar Loan website, more than 450 loans have been written, worth around $15 million. That’s about half of the available $30 million in funding, and a very respectable start. And 7% of the property owners using the loan have had credit scores of below 680. In my experience, those are people who generally would not have qualified for other loans and therefore may not have been able to install solar.
In addition to the low interest rate, the Mass Solar Loan offers a potential “loan principal buy down” for lower-income households, meaning the state may pay 20-30% of your loan for you. That’s up to $10,500. Between that and the 30% the federal government gives you to go solar, you could get 60% of your solar purchase price covered for you. And the rest is easily “paid” for through electric bill savings and green “SREC” income.
Starting June 20, the formula by which the state determines who gets the principal buy down is changing to account for the number of people in your household. The new formula will allow more families to qualify. (However, the maximum amount to which the buy down applies was lowered to $35,000. You can still finance a system that costs more, but the principal buy down value is capped.)
For example, if you have a household of four with total income of $84,939 or less, you may get 30% of the system price paid for by the state. For a $35,000 system, that equals $10,500. If your household income is greater than that but less than $127,408, you get 20% of the system paid for, or $7,000.
|Household Income||The State Pays||Maximum Price Reduction|
|$84,939 - $127,408||20%||$7,000|
Not a household of four? We’ll help you figure out your eligibility based on household size and income.
Not sure what your exact household income is? Here’s where to look based on which IRS tax forms people in your house filed last year:
|IRS Form||Your Total Income|
|Form 1040 EZ||Line 6|
|Form 1040A||Line 15|
|Form 1040||Line 22|
So don’t let your household income or a low to moderate credit score stop you from looking into solar. If you own a single or multi-family home in Massachusetts, the Mass Solar Loan may have opened the door to solar ownership for you.
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