Should you finance solar with Dividend Finance solar loans?



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Dividend is a technology-enabled national provider of solar financing solutions. Image source: Dividend Finance

The cost to install a solar system can range anywhere from $15,000 to $25,000. Coming up with that amount of money can be difficult and often impossible for many households. This is why many solar panel installations are now being financed by solar loans.

There are many providers of solar loans, but finding the right one can often be difficult. Dividend Finance is one of the leading solar loan providers in the U.S. and is a company that you’re likely to come across.

Let’s take a closer look at what Dividend Finance offers, the application process, and whether or not it’s the right lender for your solar installation.

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    See your projected cash flow from using a solar loan to install solar panels

    Key takeaways

    • Dividend Finance is one of the country's leading solar loan providers, primarily offering their services through their network of over 700 installer partners.
    • Dividend’s solar financing option is known as the EmpowerLoan. The EmpowerLoan is a secured loan that requires no down payment.
    • The EmpowerLoan is offered in 12 or 20-year terms and is secured against your solar system.
    • The EmpowerLoan can be used to cover an energy storage system as well as your solar panels, with loans up to $120,000.

    Overview of Dividend Finance

    Based in San Francisco, California, Dividend Finance is a specialized lender of solar and general home improvement loans. Founded in 2013 by the current CEO Eric White, Dividend Finance hasn’t taken long to make a big impact on the solar financing industry.

    Dividend Finance is currently in the process of being acquired by Fifth Third Bancorp. Fifth Third is a financial services company that, with its acquisition of Dividend Financial, aims to upgrade its renewable energy portfolio and support the company's commitment to ESG (environmental, social and governance) matters.

    How it works

    Dividend Finance has partnered with over 700 solar installation businesses to provide more homeowners with solar power. Through their network of solar installers across the country, the Dividend team is able to offer exclusive access to their solar loans. When one of Dividend’s installer partners creates a quote for a solar system, they’ll attach a built-in financing option from Dividend Finance.

    It is important to note that Dividend Finance is not a bank itself but rather operates through a partnership with KeyBank. This allows Dividend Finance to lower their interest rates for customers and increase the number of loans provided.

    Dividend loan options

    Dividend’s solar financing option is known as the EmpowerLoan. The EmpowerLoan is a secured loan that requires no down payment, allowing more homeowners the opportunity to produce their own solar energy.

    The EmpowerLoan is customizable to customer requirements and therefore can vary in loan amounts, terms, and interest rates. However, the EmpowerLoan is only available in 28 states across America.

    What are the loan amounts for Dividend solar loans?

    Dividend Finance provides solar loans of up to $120,000. This means that Dividend is more than capable of meeting the needs of the majority of solar loans. This is evident with a 10kW solar system having an average total cost (after the solar tax credit) of about $20,000.

    See live solar panel costs for your home

    What is the term length of a Dividend solar loan?

    Dividend Finance offers two different loan term lengths for their EmpowerLoan. For an EmpowerLoan, you’re given the option between a 12 or 20-year loan. 

    Dividend Financial does not offer any short-term loans.

    These loan terms are around the industry average with the most common loan lengths being between 10 and 20 years.

    With Dividend’s long-term solar loans there are also no prepayment penalties. This means that borrowers are able to pay down the loan at any time they choose.

    What is the interest rate on a Dividend solar loan?

    The terms of Dividend’s solar loans will vary on a case-by-case basis. This means that the length and interest rate of the solar loan will be different depending on a number of different aspects.

    The interest rate of an EmpowerLoan will be determined by the homeowner’s credit history as well as the loan terms. The interest rate for an EmpowerLoan is also a fixed rate. Depending on your term and credit history, you should expect interest rates of between 3.49% to 6.99%.

    Application process

    Once one of Dividend’s installer partners has designed a renewable energy system that meets your energy needs, you will be provided with the option for an EmpowerLoan application.

    If you proceed with an EmpowerLoan, then you’ll be given a one-page online application form. Once you’ve completed this form, you’ll be notified of a decision immediately.

    Dividend has streamlined this process, meaning that you’re able to go from filling in your loan application to signing the contract in under two minutes. This is made possible primarily due to Dividend’s instant credit approval.

    Once your application is approved and you’ve signed the contract, the installation process will take place and when you’re happy with the system, payment will be made to your installer.

    Can you finance solar batteries with Dividend Finance?

    If you’re looking at installing a clean energy storage system with your solar panels then Dividend Finance does offer an all-in-one financing solution. Dividend offers a Solar + Storage Loan which is valuable for homeowners wishing to add a solar battery to their system.

    Are Dividend loans secured or unsecured?

    All of Dividend’s solar loans are secured loans

    A secured loan is where your loan is protected by an asset. This means the lender will hold the title over the asset until the loan is paid in full. This provides the lender with security, so if you cannot pay off your loan, then the bank will sell your collateral to pay off the loan.

    Fortunately, you don’t have to sign over your home as collateral for a Dividend EmpowerLoan - Dividend uses the solar equipment itself to secure the loan. This also means that you don’t need home equity to get approved for a loan.

    Learn more: Solar loans: Everything you need to know

    Repaying your Dividend solar loan

    With a Dividend Finance solar loan, your scheduled repayments are taken directly out of your account via an automated direct-debit transfer.

    Once the solar system has been installed and is ready for inspection, the property owner will be prompted to sign off on payment. From that point onwards you make fixed monthly payments for the duration of the loan term.

    There are no prepayment penalties, so you can pay off your loan early if you want. 

    Should you go solar with a Dividend solar loan?

    If you’re interested in going solar but can’t cover the upfront costs, then a Dividend Financial solar loan is a viable option. With their flexible loan terms, zero down payment, the streamlined application process, and a wide range of loan amounts, a Dividend loan is a competitive solar loan.

    Compared to other financial institutions, Dividend will also be more equipped to answer all your questions regarding solar loan products. This is due to Dividend Financial having specialized solar loan professionals.

    However, there have been some aspects of Dividend solar loans that have come under question. An issue that has been raised by many of Dividend’s consumers is poor customer service. The long waiting times and delayed responses can make Dividend a difficult lender to work with.

    Here at SolarReviews we recommend paying for a solar system in cash, but we do recognize that this is not possible for some homeowners. A solar loan may be necessary in some circumstances and if a Dividend loan isn’t the right fit for you, then there are many other options for you.

    Learn more: Top 6 solar financing companies

    Compare the total costs and savings of a financed solar system to a purchased system
     - Author of Solar Reviews

    Cameron Bates

    Blog Author

    Cameron is a business analyst and content specialist at SolarReviews.

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