For homeowners in Massachusetts, finding a low-interest loan to finance their solar power system just got a lot easier thanks to the launch of the Mass Solar Loan program. The program, jointly administered by the Massachusetts Clean Energy Center (MassCEC) and Massachusetts Department of Energy Resources (DOER), leverages $30 million in public funds to make low-interest, fixed-term solar loans more accessible for homeowners in Massachusetts.
Update: changes to the Mass Solar Loan program
Recent updates to the Mass Solar Loan program have changed interest rates. You can check out current program metrics here to get an in-depth look at the numbers. While some rates have changed for property owners, the Mass Solar Loan program is still a beneficial program helping Massachusetts residents go solar.
How does the Mass Solar Loan program work?
The Mass Solar Loan program was developed to further encourage the adoption of solar panels in MA and support the Commonwealth’s solar industry in a way that maximizes the benefit to the local economy. “The genesis of this program came out of the Department of Energy Resources,” explained Andrew Belden, director of solar programs at MassCEC. “They did a study in 2014 looking at the gross economic benefits to the Commonwealth of direct ownership versus third-party ownership. What it revealed is not just that direct ownership is better for homeowners… it’s also better for the Commonwealth as a whole, in terms of making sure those dollars stay within Massachusetts. The conclusions of that study were really the impetus for [the Mass Solar Loan] product.”
With the study in hand, DOER and MassCEC built a loan program to ensure that solar energy system ownership is a viable option for homeowners in Massachusetts. The result is a network of solar installers and financiers offering low-interest, fixed-term loans that make it easier for homeowners to buy their solar energy system outright, rather than lease it from a third-party owner like SolarCity, Vivint Solar, or others.
The Mass Solar Loan program is your best financing option in Massachusetts
System ownership means that homeowners aren’t splitting the financial benefits of a solar energy system with a third-party owner, thereby ensuring they keep more of their system’s value over its lifetime. For homeowners financing their purchase with a solar loan, the lower the loan’s interest rate, the higher the resultant solar savings. This is because less money is spent each month paying down the loan’s interest, enabling more solar savings to accrue.
The Mass Solar Loan program has some of the lowest interest rates available in Massachusetts. EnergySage compared the Mass Solar Loan to the top three financiers quoted most frequently to Massachusetts shoppers in the EnergySage Solar Marketplace. What we found: the Mass Solar Loan program’s maximum interest rate (3.25 percent) is significantly lower than the average interest rate for all three financiers. In addition, the interest rate is even lower than the bottom 25th percentile of all loans offered in the Commonwealth. In short, these are some of the best financing terms available.
Why are the interest rates so low? The Mass Solar Loan program uses what’s known as an “interest rate buy down” to deliver its impressive terms. This means that the program uses a portion of its funds to pay off, or “buy down”, some of the interest so homeowners can access lower rates. As a result, loans offered through Mass Solar Loan are three percent lower than what those same lenders would otherwise offer to homeowners – the maximum interest rate is 3.25 percent, but many can be lower still.
In addition to the interest rate buy down, the Mass Solar Loan program has two more incentives for borrowers who may not otherwise have access to financing. For homeowners with less-than-perfect credit scores, the program has a loan loss reserve incentive that can help participating lenders expand their eligibility criteria by reducing their financial risk. And for homeowners with an annual household income of $80,240 or below, the program will pay off a portion of their loan principal (20 to 30 percent) as soon as their solar installation is complete.
Mass Solar Loan banks
The Mass Solar Loan program is offered through qualified installers who pass the program’s screening process (which includes a system inspection, design review, and reference check). Your installer will submit an application for the program on your behalf, which you can then take to a participating bank or credit union. Take a look at the table below for more information on the banks participating in the Mass Solar Loan program:
| Bank | HQ Location | Interest Rate (5 year loan)* | Interest Rate (10 year loan)* | Interest Rate (15 year loan)* | Offers solar loans for more than $35,000? |
|---|---|---|---|---|---|
| Equitable Bank (formerly Weymouth Bank) | East Weymouth | 1.25% | 1.25% | 1.25% | Yes, up to $50,000. |
| UMassFive College Federal Credit Union | Hadley | 3.25% | 3.25% | N/A | Yes, but not through the Mass Solar Loan program. |
| Avidia Bank/BlueWave | Hudson | 1.89% | 1.89% | N/A | No |
| Bank Five | Fall River | 2.99% | 2.99% | N/A | Yes, up to $60,000. Interest rates vary based on term. |
| Clinton Savings Bank | Clinton | 3.00% | 3.00% | N/A | Unknown. |
| Naveo Credit Union | Somerville | 1.00% | 1.75% | 2.75% | Yes, but not through the Mass Solar Loan program. |
| Stoughton Co-Operative Bank | Stoughton | 2.49% | 2.99% | 3.25% | Yes, but not through the Mass Solar Loan program. |
| Sharon Credit Union | Sharon | 2.75% | 2.75% | N/A | Yes, up to $60,000 at the same interest rate. |
*Note: These rates are provided for informational purposes only and do not represent an offer. Contact each bank for more information about the rates available to you.
The Mass Solar Loan program also has a data dashboard that tracks the program’s performance since its start. As of April 2017, the program has funded nearly 2,300 solar projects in Massachusetts, at a median interest rate of 2.99%. Find up-to-date data on the Program Performance dashboard.
If you want to know how much you can save by going solar, EnergySage’s Solar Calculator gives you a quick customized estimate of your long-term solar savings. If you’re ready to get started, register your property today to start receiving and comparing quotes from local, pre-screened solar installers in Massachusetts.
