Solar partnerships ‘brighten’ prospects for mortgage companies

“Homebuyer demand for mortgages drops 29% since last year as interest rates top 6%,” CNBC reports September 14e 2022. While homebuyer demand for mortgages has fallen by almost a third since last year, there is a bright light on the horizon for mortgage companies with the advent of partnerships solar panels and the momentous passage of the American Inflation Reduction Act.

Why should homeowners worry about reducing their carbon footprint when they face rising mortgage rates, runaway inflation, and soaring food and fuel prices? With the passage of the Inflation Reduction Act (IRA), Americans can ease their transition to renewable, zero-carbon electricity with the billions of dollars in tax credits that will be issued to support the battery, energy, and power industries. wind, solar and other clean energies.

Inflation Reduction Act creates National Green Bank

This bill “will provide a range of consumer incentives to reduce high energy costs and lower utility bills.” This includes direct incentives for consumers to buy electric and energy-efficient appliances, clean vehicles and rooftop solar panels, and to invest in energy-efficient homes. A significant portion of the funding goes to low-income households and disadvantaged communities.

The Inflation Reduction Act (IRA) provides $27 billion for a greenhouse gas reduction fund that “could increase private sector lending for community solar energy, efficiency and more so in underserved neighborhoods,” reports Canary Media.

As stated in the IRA, environmental benefits include:

  • $9 billion in consumer home energy rebate programs focused on low-income consumers, to electrify appliances and for energy-efficient renovations.
  • 10 years of consumer tax credits to make homes energy efficient by making heat pumps, rooftop solar systems, electric HVAC systems and water heaters more affordable.
  • $4,000 consumption tax credit for low- and middle-income earners for the purchase of used electric vehicles, and up to $7,500 tax credit for the purchase of new electric vehicles .
  • $1 billion grant program to make affordable housing more energy efficient.

Even before the IRA was passed, we saw more and more lenders offering energy-efficient “green mortgages” that allow borrowers to finance energy-efficient upgrades at favorable loan terms. A green mortgage offers additional funds with the purchase or refinance of the mortgage that can be applied to energy efficiency improvements.

America’s largest home lender goes solar

Consider Rocket Mortgage’s expansion into solar with the launch of Rocket Solar to advise potential customers, connect them to the company’s digital financing app, and facilitate solar installation. As America’s largest home lender, Rocket Mortgage’s “first step into green energy” included the release of “a new rate and term refinance giving homeowners the ability to consolidate any solar panel loan with their mortgage for a low interest rate,” the company said in a statement.

Whether a solar system is purchased or rented, the use of solar energy significantly lowers a homeowner’s monthly energy costs while increasing the value of their home.

A green mortgage can increase an individual’s purchasing power and allow buyers to qualify for a larger mortgage. People who buy a home that is already energy efficient can lower their monthly bills. Businesses are also turning to green mortgages to improve their energy efficiency.

Commercial lenders and energy efficient mortgages

Consider Fleet Mortgages’ entry into the business of buying commercial green mortgages with their announcement of their “first entry-level foray into providing green mortgages for homeowner borrowers,” as reported by FT Advisor.

According to the US Office of Energy Efficiency and Renewable Energy, the average cost of solar photovoltaic panels has dropped by almost 70%. Solar energy is economically competitive with conventional energy sources in most states.

Installing a solar system is like creating your own power plant. Landowners manufacture power directly on their own property instead of relying entirely on the utility company to do it for them. Although you can’t completely disconnect from the grid, tapping into solar power allows you to generate your own electricity every sunny day.

When President Biden signed into law the Inflation Reduction Act (IRA) in August 2022, we witnessed the largest federal investment in alternative energy and sustainability in American history. As Americans, we can use the new green energy tools at our disposal to help our country achieve its ambitious goals of carbon neutrality.

Based in Chino, Calif., Bobby Tetsch is founder and CEO of Modern Pro Solutions, an energy company founded in 2016 that is changing the way homeowners power their homes. Bobby Tetsch can be contacted at: [email protected]

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