PSEG to roll out energy improvements loan
PSEG Long Island next week will roll out a program to provide state-administered loans to customers to fund energy home improvements, including solar panels, that are repaid through their electric bill.
The program is expected to address what has been a major impediment to wide-scale adoption of home solar systems and other energy-saving projects: high upfront costs.
Under the program, which can be used for solar panel installation, geothermal systems and certain other green-energy systems, customers can pay for the purchase and installation of systems through a monthly installment on their PSEG bill. The monthly loan repayments can't exceed the prior year's average monthly electric bill before the improvements, PSEG said.
"It's good for customers and its good for the environment," said Mike Voltz, PSEG's director of energy efficiency and renewables, noting that there's been pent-up demand for solar in anticipation of the program. "The month of August will be a big month."
The utility is working with the New York State Energy Research and Development Authority to offer loans of as much as $25,000 at interest rates as low as 3.49 percent. Users must pay their bills through automatic bank withdrawals to qualify for the lower rate.
Customers with credit scores of 647 or higher will qualify for the loans, but there are also offerings for those with lower scores. Loan terms are for five, 10 or 15 years, with the $25,000 maximum available to those who choose the longest payback period. The loan program won't be available to commercial customers.
"It's a game changer," said Kevin MacLeod, vice chairman of the Long Island Solar Energy Industries Association, a local solar product and installer group, who worked with Assemb. Steve Englebright (D-Setauket) to advance the measure.
MacLeod, who operates KPS Solar in Bay Shore, said he and other installers have hundreds of customers signed up and waiting for the program.
So far this year, PSEG has received a total of 2,806 applications for residential solar panel rebates, including around 1,400 in May and June alone.
Leased systems have led the pack in sales by a 4-1 ratio, installers say, but that could change with on-bill financing because it would reduce the upfront cost of systems.
The largest home solar systems cost between $35,000 and $40,000, MacLeod said. Smaller systems cost under $20,000. But with a $25,000 loan, and a $5,000 LIPA rebate, upfront payments would be greatly reduced.
Some installers, MacLeod said, will offer one-year zero-percent interest for the balance not covered by the state loan. "People don't want to have to lay out that money in the beginning," he said.
Since the solar rebate program kicked off in 2000, a total of 8,745 installations have been completed, with 90 percent in home solar systems, Voltz said. A total of $128 million has been paid out in residential rebates.
Separately, PSEG will alter the rebate for residential solar systems to 50 cents per watt for home systems for systems up to 25 kilowatts. The current rebate is 66 cents per watt for up to 10 kilowatt systems, based on their performance.