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What is a RE-AM Solar Loan?

What is a RE-AM Solar Loan?

In 2019 purchasing a solar system vs leasing a solar system is very popular. From speaking to many industry professionals and customers, it seems that owning a system really is the direction that most homeowners want. The cost of solar panels is going down, the scale of solar companies and suppliers are growing and technologies like Solar Edge HD Wave inverters are making it easier than ever to service any potential issues a system may have. Customer confidence in investing into a solar system and into their own property is growing. Customers are less afraid to buy a system. With that said, financing is what most customers choose to do and the question ‘What is a RE-AM solar loan?’ or ‘How does a solar loan work?’ is often asked. I will explain what a ‘re-am’ or re-amortizing solar loan is.

A re-amortizing solar loan is a loan that re-recalculates its monthly payment either once or multiple times at certain points of the life of your loan. For example, Enerbank has a new Triple RE-AM loan. What this means is that your loan re-calculates your monthly payment 3 times within it’s first 3 years. Enerbank USA offers 12 month or 18 months for the first re-am and then each May for the next 2 years it will again re-calculate. You have 3 points where your loan can re-calculate to a lower monthly payment based on what you put into it! What does this mean for customers and why is it so good for solar?

The answer is that this loan allows a customer to pay down however much of the loan they want to lower their effective monthly payment OR they can keep their tax credits and use it for themselves (with NO PENALTY to the APR or interest rate). Many standard solar loans are structured in a way that the customer must pay back the tax credit amount to the bank or else the interest rate will increase dramatically (often times to 18% or even higher). This solar loan does not penalize you for keeping your tax credit money! Your monthly payment will change based on your principal amount, but your interest rate will stay the same. So for the first 3 years of your solar loan, you can lower the monthly payment more and more depending on how much you put into your loan. Or don’t and just keep the tax credits from solar for yourself and use it for whatever you please! The flexibility and low-risk of this loan is exceptional and certainly an option for you to consider if you are looking to buy a solar panel system.

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