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Q&A with Sungage Financial

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When making the switch to solar, many EnergySage shoppers end up financing their installation with a loan from Sungage Financial. Based in Boston, Massachusetts, Sungage currently provides financing solutions through their partner installer network in 18 states and Washington D.C. EnergySage conducted a Q&A with Mike Gilroy, Sungage CEO, to learn more about their company, what customers should consider when choosing a solar loan, and how they differ from other specialized solar lenders.

An overview of Sungage Financial

[ES] Tell us more about Sungage – what’s the background of your company?

[SF] Sungage began in 2009, when our founder–Sara Ross–was exploring options for installing solar on her roof. The opportunity to save money was clear; however, the path forward in terms of financing options was murky for both her and her local solar installer. Filling the void for consumer-friendly, solar-smart financing is where Sungage started. 

After her solar system was installed, Sara asked her solar installer to give her a call when their next customer needed help with financing a solar purchase. Partnering with her installer, Sara began lending out her daughter’s college savings fund to their customers–other local homeowners who wanted to go solar. When the idea for a solar loan proved popular, she proceeded to build a business that bridged the gap between homeowners, installers, and financial institutions.

[ES] What makes Sungage different from other solar financing options?

[SF] The Sungage “zero-interest bridge loan” and our exceptional service are our most unique features.  

When you purchase a solar panel system, you’re eligible to claim the federal solar tax credit. In a perfect world, you would want a zero-interest loan for the amount of the tax credit and the ability to start paying down your principal right away on the remaining balance.

That is exactly what Sungage offers.  Sungage puts the amount you expect to receive for the federal tax credit into a zero-interest portion (ZIP) of the loan. The remaining balance goes into the interest portion. This means that you can begin paying down your principal balance from day one and still pay zero interest on the amount you expect in federal tax credit.  Sungage is the only solar lender to offer this. For most programs, the entire loan amount goes into an interest-only loan, interest payments are made through next tax season, but nothing goes to pay down the principal balance until the following year when tax season is finished. In some markets like New York, Illinois and South Carolina local incentives and state tax credits can also be included in the zero-interest portion of the loan.

In terms of service, we combine the efficient process of an industry-leading technology platform with humans who understand solar financing. What that means for homeowners is that they can easily apply for the loan on any device, get a credit decision instantly in most cases, and then immediately review and e-sign the loan paperwork. When a homeowner has questions, they can pause and call into 844-SUNGAGE, where they are quickly connected with a human being (not a robot and not a phone tree). And that Sungage rep on the other end of the line is trained in both the solar and the financial aspects of the industry.

[ES] What’s the most popular loan option that Sungage offers?

[SF] Since many homeowners are interested in savings on day one (i.e., a bill swap with their electric bill), our longer-term loans (15 and 20 years) are the most popular. Regardless of the term, each loan includes our Zero Interest Portion (ZIP) loan. 

[ES] Does Sungage offer any specialized financing for those taking installing energy storage or re-roofing? 

[SF] Yes, Sungage offers the ability to finance roofs and batteries within our Solar Loan. Plus, since batteries charged by solar are eligible for the Federal ITC, we can include that in our calculation of the customer’s Zero Interest Portion (ZIP), helping to keep their monthly payment low. In addition to that, our Zero Interest Portion can incorporate many of the local and state-level incentives that we see around the country. For example, in New York, Illinois or South Carolina we can include the value of a customer’s state tax credit in our ZIP loan, lowering both the monthly payment and lifetime ownership costs.

 [ES] During the solar installation process, when does Sungage require payments?

[SF] Once a system is installed, homeowners approve the release of their loan funds to pay the installer for their work. Sixty days later, the homeowner’s first monthly payment is due.  Typically the local utility can turn on or “energize” the solar system within those sixty days.

Comparing solar loans

[ES] Why should homeowners choose Sungage over a loan from their local bank or another loan company?

[SF] Sungage is truly zero interest on the tax credit portion of the loan (the ZIP portion), whereas other lenders offer interest-only loan payments during the first 18 months. With an interest-only loan, the homeowner is paying interest on the entire loan amount (tax credit portion included) and delaying any reduction in principal.  The Sungage zero interest portion (ZIP) provides a true zero-interest loan for the anticipated amount of the tax credit and allows a customer to pay down their principal balance on the “non-tax credit portion” from day one. This lowers the total cost of ownership and increases lifetime savings. The ZIP feature is unique to Sungage.

Our exceptional service also provides a very different customer experience vs. a bank or other solar loan companies.  Banks may be local, but it is rare for them to have specialized teams or products specifically dedicated to solar lending which can lead to delays and confusion. Specialized solar lenders tend to be internet-based “financial technology” companies who are great at offering a quick credit decision, but not as great at answering questions, processing change orders or explaining how the tax credit works.

Additionally, Sungage provides flexible loan terms that allow a homeowner to choose the loan term that’s right for them. There’s no prepayment penalty throughout the life of the loan and we provide transferability of the loan if homeowners want to sell their home before paying off the loan. 

[ES] What do you think are the most important questions for homeowners to ask when choosing a solar loan and financing company?

[SF] A few come to mind:

  • If you call the financier, how easy is it to get a human being on the line? Just the simple exercise of asking some questions of a company can provide valuable insight – it’s reassuring to get a sense of how helpful that company will be if you do have a genuine question or concern in the future.
  • How does their loan product work?  Will I pay interest on the anticipated tax credit portion while I wait for my tax return to be filed?
  • What happens if you want to sell your house before the end of your solar loan’s term? What are your options? Is the loan transferrable to a new owner?
  • Does the lender communicate after the initial credit approval with both the installer and homeowner throughout the process of acquiring a solar system?
  • Can I add a co-applicant?  Does their name need to be on the deed?
  • If there are questions concerning my credit application, can I speak directly to an underwriter?
  • What’s the application and credit decision process like – fast and easy? Is it accessible via mobile phones? Is there online bill pay and documentation storage?

Compare various financing options on EnergySage

By signing up on the EnergySage Marketplace, you can receive up to seven custom solar quotes to compare side-by-side. These quotes will include information about the proposed solar equipment, system design, financing, and more. If you have specific preferences about financing your system–whether that be a short term loan, a low-interest rate, a $0-down option, or a loan from a specific provider like Sungage–simply note it in your account so installers can provide a quote that meets your needs.

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