"“If you're borrowing money, you can't tell me for how long, what the interest rate is, and what the payment is. You don't know enough about the money,” he said. He is right. And the verdict on this specific deal is also blunt: a 21-year, 12% loan on a depreciating home upgrade is a financial trap for almost any household that signs one."
"“Solar financing only pencils out in a narrow band. Preston puts the ceiling at 'a small window where solar panel loans work, and that's when they're like 2 to 3, maybe 4%' interest. Above that, the interest cost overtakes the electricity savings, and the system stops being an asset.”"
"“A $30,000 balance at 12% on roughly $120 a month stretches out for about 21 years. Over that span, the borrower pays far more in interest than the panels cost in the first place. Compare that to the same $30,000 at 4% over the same period: monthly carrying costs are far lower, and the total interest is a fraction of the 12% version. The hardware is identical. The difference is entirely in the rate.”"
"“The Federal Funds Rate sits at 3.75%. The 10-year Treasury yield is nearly 4.6%. A 12% consumer loan is more than triple the Fed's benchmark and well above what the U.S. government pays to borrow for a decade. With inflation running near 2% to 2.5% annualized, the real interest rate on this solar loan is roughly 9% to 10%. That is credit-card territory dressed up as a green home improvement.”"
A caller believed she had a 30-month solar loan, but a $30,000 balance at $120 per month with 12% interest implies a repayment period closer to 250 months, about 21 years. The key issue is that solar financing only works within a narrow interest-rate range, roughly 2% to 4%. At 12%, the interest cost overwhelms electricity savings, and the real rate becomes roughly 9% to 10%, similar to credit-card levels. Over 21 years, the borrower pays far more in interest than the panels cost. The hardware is the same, but the rate determines whether the upgrade behaves like an asset or a trap.
Read at 24/7 Wall St.
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