{"id":6654,"date":"2023-01-20T17:11:28","date_gmt":"2023-01-20T17:11:28","guid":{"rendered":"https:\/\/aurorasolar.com\/?p=6654"},"modified":"2024-05-01T20:32:28","modified_gmt":"2024-05-01T20:32:28","slug":"5-proven-ways-sell-solar-high-interest-rates","status":"publish","type":"post","link":"https:\/\/aurorasolar.com\/blog\/5-proven-ways-sell-solar-high-interest-rates\/","title":{"rendered":"5 proven ways to sell solar in times of high interest rates"},"content":{"rendered":"\n

Inflation and supply chain issues have driven up the cost of just about everything lately, including car payments, groceries, and the price of energy. With the highest inflation rates since the early 1980s<\/a>, most consumers are now spending more money on the basic necessities of modern life than ever before. <\/p>\n\n\n\n

With homeowners pinching pennies to make ends meet, selling solar can be tricky. This is especially true because, along with inflation, interest rates have also risen. Gone (for now) are the days of zero-interest loans to finance those solar systems.<\/p>\n\n\n\n

\u201cWe are moving at light speed from the lowest interest rate environment, I think, in any of our lifetimes to what is certainly the highest in decades,\u201d explains Mike Gilroy, CEO of Sungage Financial<\/a>. <\/p>\n\n\n\n

But, none of this means that solar is no longer a great investment, of course. It\u2019s just that the way we sell it has to acknowledge these facts. During our recent \u201cDemystifying Solar Financing<\/a>\u201d panel at Empower, solar financing leaders from across the country laid out some winning strategies for selling solar in this high-interest rate environment.<\/p>\n\n\n\n

Why are loan rates rising?<\/h2>\n\n\n\n

First, it\u2019s important to understand why solar loan rates are rising. We often hear about interest rates going up, but what does that really mean? The Federal Funds Rate, at its most basic, is the cost of money. <\/p>\n\n\n\n

\u201cThe Federal Funds Rate is the base borrowing cost,\u201d explains Matt Murray, Chief Marketing Officer of Goodleap<\/a>. \u201cSo, every bank is borrowing money overnight and then deciding \u2018what do I need to do on top of that to make the money I need to to run a viable business?\u2019\u201d<\/p>\n\n\n\n

When that rate is low \u2014 or even zero \u2014 financing companies can offer loans at lower rates, for example, the 0% car and solar loans that were so popular in 2020 and 2021.<\/p>\n\n\n\n

\u201cIn that low-rate environment, it was natural that the industry gravitated toward low, fixed APRs. I think the 0%, 25-year loan was the epitome of that,\u201d Mike says. <\/p>\n\n\n\n

As the rate rises, the cost of capital for financing companies increases. This is why we\u2019re now seeing loans more in the 5-6% range and greater. If the Federal Funds Rate continues to rise, we can expect the interest rates customers pay to do the same.<\/p>\n\n\n\n

Again, though, none of this means that solar isn\u2019t a great investment for homeowners. So, let\u2019s get to the strategies.<\/p>\n\n\n\n

Highlight utility rate increases<\/h3>\n\n\n\n

There\u2019s an old saying: All you can count on is death, taxes, and utility companies raising rates. (Or something like that.)<\/p>\n\n\n\n

This continues to be true. The US Energy Information Administration (EIA) determined in its short-term energy report<\/a>, \u201cThe US residential price of electricity will average 14.9 cents per kilowatt hour in 2022, up 8% from 2021.\u201d The agency projects electricity costs will go higher still in 2023<\/a>.<\/p>\n\n\n\n

Of course, to many of us, 14.9 cents sounds pretty cheap for a kWh. You can check out your specific region on this chart<\/a>. Spoiler alert: No matter where you\u2019re located, the price of electricity has gone up, and will very likely continue to go up.<\/p>\n\n\n\n

So, even though a solar loan may be a bit more costly than it was in times with lower interest rates, its value could arguably be even greater when compared to the rising prices of energy overall.  <\/p>\n\n\n\n

There are a couple questions you can use to bring this home with homeowners:<\/p>\n\n\n\n