Renew Financial solar loans: Everything you need to know

Owning your own solar energy system can provide you with a number of financial, environmental and functional benefits, but we understand that not all homeowners have the available funds to cover the upfront costs. 

Luckily, there are a number of solar financing options that can help make owning your own system a possibility. One of the leading lenders in this space is Renew Financial.

We’re going to delve into what exactly a Renew Financial solar loan entails, and see whether it’s the right option for you.

Overview of Renew Financial

In 2008 a group of finance and technology experts created Renew Financial with the aspiration to make renewable energy products more available for homeowners. Fast forward to 2023, and they’re one of the leading providers of solar and home improvement financing solutions in the country.

What types of solar loans does Renew Financial offer?

Renew Financial offers one type of solar installation financing: Property Assessed Clean Energy (PACE), also known in California as CaliforniaFIRST. 

PACE loans were introduced to allow more property owners to experience the benefits of renewable energy. PACE financing covers 100% of the costs of your solar installation, which means Renew Financial requires no down payment for a solar loan. Unlike traditional solar loans where you make monthly repayments, PACE is repaid through your property tax bill over a period of up to 30 years.

Renew Financial PACE financing also has no minimum FICO score as the loan is tied to the property rather than the borrower's credit history.

The Renew PACE program is also able to finance other household projects which fall under energy efficiency, renewable energy or resiliency upgrades. This could include new windows, landscaping or an HVAC system.

Loan amounts

Renew Financial provides solar and home improvement loans of up to 20% of your property value, with the maximum amount being $250,000. 

As solar panels typically cost between $18,000 and $20,000 before applying tax credits, Renew’s loan amounts are more than enough to cover any residential solar project.

Loan terms

Renew Financial specializes in long-term affordable financing with their solar and home improvement loan terms ranging between 10 and 30 years.

A 30-year loan term is one of the longest terms you’ll find in the industry, with the solar lengths of between 10 and 20 years being more common. 

Interest rates

The interest rates for a Renew Financial solar loan will vary on a case-by-case basis. However, the interest rates with a Renew Financial PACE loan will range between 3.69% to 8.49%. The main determinant of your loan’s interest rate will be the length of the loan.

Unlike many other solar loan providers, your loan’s interest rates will not be affected by your personal credit history or FICO score.

Where are Renew Financial solar loans available?

One of the major downsides of Renew Financial’s PACE solar loan is its lack of availability throughout the country. Currently, Renew Financial only offers their financial services for solar in California and Florida.

Learn more: All about PACE program solar loans

How to apply for a Renew solar loan

The main method of applying for a Renew Financial solar loan is through their partnerships with over 3,000 solar installers and contractors.

Once one of Renew’s installer partners has designed a renewable energy system that meets your energy needs and provided you with a quote, you will be provided with the option for a CaliforniaFIRST or PACE solar loan. 

Paying your Renew solar loan

There are two options you have to pay your Renew Financial solar loan.

Option 1: Paying your solar loan through your property tax bill, whether that be once or twice a year depending on where you live.

Option 2: Another method of paying off your Renew Financial loan is through prepayments. Prepayments must be in either $2,500 increments or the outstanding balance of the loan. There are also no prepayment penalties.

How does a Renew loan compare to other solar loans?

There are a couple of major differences between Renew Financials’ PACE financing and other solar loans and traditional bank loans. 

The first aspect of Renew PACE financing that differs from other solar loans is the no minimum FICO score required. In most cases the amount you can borrow and the interest rates your loan will incur will be determined by your credit score and history. However, with Renew’s PACE financing, your loan terms and amount are determined by your property’s worth.

Renew Financial also differs from others in the market with their repayment structure. Unlike most solar loans where repayments are made monthly, with PACE financing you make repayments annually through your property tax bill. This can pose a major benefit for homeowners, as the savings you’ll encounter during a 12-month period will often exceed your annual repayment.

In California, similar PACE financing options for solar are offered by companies like Ygrene and Hero. 

Should you go solar with Renew Financial?

There are two primary factors that contribute to a Renew Financial solar loan being the right option for you. These factors include no minimum FICO score being required and the zero down payment.

If you’re in a financial position where you have a low credit score and don’t have the available funds to make a down payment on a traditional bank loan, then a Renew PACE loan could be your best option.

However, you should consider that with a Renew Financial solar loan, you will in most cases incur a higher interest rate compared to other solar loans, which will decrease your overall savings.