Proposing Solar Loans with Optional ITC Payments

Many solar loan companies provide loan programs that are structured such that the loan principal is assumed to be the contract amount minus the Federal ITC amount. During an upfront promotional term of 12-18 months, the monthly payments are based on the "assumed" loan principal. If the customer does not make a lump sum payment to the finance company in the amount of the expected Federal ITC within the given promotional term, the loan company will re-amortize the loan at the higher principal amount, thereby increasing the customer's monthly loan payments.

Some solar loan companies, such as Sunlight Financial, require you to disclose this to the customer in your proposal. This article explains how to do that using SolarNexus.

How to Propose a Loan Comparing Monthly Payments with and without ITC Payments

On the Analysis screen for a given solution, SolarNexus provides the ability to define up to 3 individual payment scenarios side by side. To SolarNexus, the case where the customer pays their ITC to the finance company is a totally different scenario than if the customer pockets their tax credits (or simply doesn't qualify for them). That's because they each result is totally different set of cash flows.

If your finance company requires you provide the customer with the results of both scenarios, as does Sunlight Financial, you must do the following:

1. Setup one of the 3 available scenarios with the selected finance program AND specify that the customer will pay their ITC to the finance company.
2. Setup a second scenario by selecting THE SAME FINANCE PROGRAM, but in the second case, specify that the customer will pocket their ITC. (See the screenshot below)
3. Run the analysis.
4. Generate a proposal that clearly shows the difference between the scenarios.*

* - NOTE - If you are using Sunlight Financial's loans, they require very specific presentation of the two payment possibilities. Use the SolarNexus provided "SN_Dynamic_Services_Proposal" template (or a custom proposal assembled by SolarNexus) to provide an output approved by Sunlight Financial.

The SolarNexus designed proposal will show the case where customer pays the ITC to the finance company AND show a disclosure beneath it explaining that if they don't pay the ITC to finance company before the end of the promotional period, their payment will go up to $X. See below for a sample resulting from the Analysis settings above.

Sample proposal page presentation:

The SolarNexus provided document template recognizes this special condition and outputs its price and payments page to summarize both scenarios - with the assumption being that paying the ITC to the finance company will be the best case. Rather than show two separate columns for the same finance program, the SolarNexus proposal only shows that option one time, and provides the "Financing Notes" disclosure as the representation of the case where the customer pockets their ITC (or doesn't qualify for them).