When choosing a solar loan, there are multiple factors to take into account. Atmos offers two basic types of solar loans: Tax-Advantaged Loans and Simple Amortizing Loans. Within each category, different loan terms may be offered.
Tax-Advantaged Loan
A Tax-Advantaged Loan is generally only appropriate for borrowers that can take advantage of the federal investment tax credit (ITC). The tax credit is not a check or rebate from the federal government. It is a dollar-for-dollar credit against taxes owed, so a tax credit can only be monetized by customers that have a federal tax liability. The ITC can be rolled forward into future years if a borrower can’t take advantage of the full amount of the ITC in a single year. Borrowers should consult IRS guidelines for updated rules regarding rolling forward a tax credit.
If a borrower can take advantage of the federal investment tax credit, a Tax-Advantaged Loan is a great option. It provides borrowers with 30% of their project cost interest-free for 18 months. This reduces the overall financing costs associated with a solar installation but does include a step-up to the minimum monthly payment if a borrower chooses not to make prepay the amount of the ITC before month 19. More information on Tax-Advantaged Loans can be found here.
Simple Amortizing Loan
If a borrower does not have a federal tax liability, or if a borrower is on a fixed income and can’t afford the monthly loan payment without prepaying the amount of the ITC, a Simple Amortizing Loan may be more appropriate. Monthly payments for Simple Amortizing Loans remain the same through the life of the loan and does not include any potential step-ups. More information on Simple Amortizing Loans can be found here.
Both Tax-Advantaged Loans and Simple Amortizing Loans are excellent options to electrify your home and gain energy independence. Be informed and choose the right loan product for you. To get more information, please contact loan_servicing@joinatmos.com.
Please note: Atmos is not a tax consultant and does not provide tax advice. To understand the implications of the ITC for your situation or for other tax-related questions, please consult a tax advisor.