Finance on OpenSolar - May '22 Insights
Now that five of the top US Solar Finance Companies are fully integrated on OpenSolar, we are starting to see some fascinating developments as more and more solar professionals are using the integrated finance feature.
Top Five States
High rates of solar finance uptake are a sign of a mature residential solar market, so it wasn’t surprising to see California, New Jersey, Florida and Texas on the list. It was a bit of a surprise to see Oklahoma near the top of the list, too, with Missouri knocking on the door of the top 5.
It’s exciting to see these emerging markets really mature and leverage solar finance to help expand the market!
Most Popular Product Type - and selling in a rising rate/inflationary environment
In May 2022, the most popular product type was a 1.99% 25 year loan, so customers are gravitating towards the longest loan terms but not necessarily the very lowest rates.
This is great to know as interest rates continue to increase (the fed announced a 0.75% rate increase last week and signaled that rates would continue to rise aggressively for much of the rest of the year). I’d expect most solar lenders to continue to increase rates in line with the market throughout the year.
Your customers watch the news, too, and understand that borrowing is getting more expensive, and they are unlikely to expect a 0% or 0.99% APR solar loan.
And, keep in mind that electricity prices are rising even faster than other prices (they were 16.2% higher in May 2022 than May 2021!), so there’s a bit more room to accommodate a higher solar loan payment and still save your customer real money.
That’s just the dollars and cents. Our hunch is that people are increasingly aware, given world events, of the fundamental need for energy independence both nationwide and at the household level.
Finance vs Non-Financed System Prices
The average system price of a financed system was substantially higher than that of a non-financed system - $42,243 vs $34,177. This is partially a reflection of dealer fees, but it also reflects the fact that solar finance allows homeowners the flexibility to opt for bigger systems with storage that better prepares them for the future. It’s also nice to see higher revenues going through the books of Solar Installer businesses!
Credit Application to Decision
Perhaps my favorite insight that we saw in May 2022 was the sheer speed with which solar pros using the integrated finance feature on OpenSolar are able to help customers get approved for financing and seal the deal, directly from the proposal!
Completion of a solar credit application on average took only 6 minutes and 4 seconds, and the average speed for a decision from one of our finance partners was only 48 seconds from the time the customer hit “Submit”.
The technologies used by our partners, when combined with OpenSolar’s proposal, are making it super easy for the homeowner and solar pro alike to proceed with projects.
We’ll run the numbers each month and bring you insights on what we’re seeing. If your solar business is on OpenSolar, then we’re psyched to support you! But if you’re not yet using the integrated finance feature, we urge you to consider it as the next step of your journey on our platform. It’s delivering substantial benefits to those who are.