SWITCH is working with the Queen's Applied Sustainability Research Group and various other groups are working to convince financial institutions of the unique low-risk profile of solar FIT installations. As well, some vendors offer pre-arranged financing. As this information comes to our attention, it will be listed here.

In general, low-risk financing tends to be offered by lenders with a lower interest rate for the creditor. “Low risk”, usually means that it is “secured against” (i.e. guaranteed by) assets which can be easily claimed and sold by the lender if the creditor defaults on the loan. When these assets depreciate quickly, like cars, the rate of interest tends to be higher; when they tend to go up in value, like housing, the rate is lower.

To date, traditional lending through financial institutions at a competitive rate has been slow to materialize. However, recent inquiries by SWITCH staff have clarified that there is an option for homeowners who have equity in their homes.

In a recent meeting with Ian Rundle and Jeff Dillon of The Mortgage Professionals (www.mortgageproteam.com), SWITCH was given an explanation of how home equity loans can be accessed for microFIT applications. According to Rundle, “We can offer secured loans and mortgages at interest rates that are currently near all time lows so people can install solar systems and get good returns for the electricity they add to the grid.” For more information on how to use the equity in your home to finance your PV installation, you can contact Jeff Dillon (call 613-453-3663 or email jeff@mtgprof.com or fill in their on-line form), or contact your current mortgage broker.

Up to now, banks and credit unions have only been offering standard home renovation-type loans at 6-7%, sometimes for terms as short as 5 years. Secured home equity loans have the same length as a mortgage, offer the (lower) interest rate of a mortgage, and are secured through the equity in the property on which the panels will be installed. They are very common vehicles for financing a variety of products.

In a recent discussion with Dave Shilton of TD Canada Trust, SWITCH was given an explanation of how government-guaranteed loans can be accessed for microFIT applications by corporations. According to Shilton, “Thanks to the Canada Small Business Financing Loan (CSBFL) program, we can offer loans with floating rates at prime + 3% so that businesses who bank with us can install solar systems.” For more information on how to finance your PV installation using this program, you can contact Terry Romain at TD Canada Trust (94 Princess Street, Kingston, ON K7L 1A5; Telephone 613-549-8770, extension 246; email terry.romain@td.com) or contact your current bank loans officer.

CSBFL is available from all Canadian chartered banks. It is available to Canadian businesses with annual sales less than $5 million, and maximum loan amounts of $350,000 are available to acquire equipment or make leasehold improvements.

According to Carrie Lagasse, RBC's VP commercial financial services (Kingston and Quinte), Industry Canada has recently said that CSBFL will be available to homeowners, farmers, and Commercial property owners for solar PV systems (because they generate revenue), something that wasn't available before (March 2010).

Up to now, banks and credit unions have only been offering standard loans and lines of credit at 6-9%, sometimes for terms as short as 5 years. These government-guaranteed loans can cover up to 75-90% of the cost of a solar system, and have a term of 10 years.

Dave Shilton also clarified that it is also possible for business owners to get secured loans at (lower) mortgage-like rates and with standard mortgage terms if they are willing to use the equity in the buildings that they own to secure the loan. Carrie Lagasse added that the value of the solar systems can be added to the value of the building for the purposes of calculating mortgage collateral.

TD is aware that these loan options are not ideal (they only apply to their own customers, and they do not reward the low-risk nature of the OPA payment), but they do represent a small step forward, in SWITCH's opinion.

The Farm Credit Canada has come out with a new program to support farmers and agribusinesses in taking on renewable energy generation. (In order to qualify, at least 51% of their income must come from agricultural sources other than electricity generation).

• Basic information can be found here
• The government press release can be found here

• Home Equity Financing (borrowing against the equity in your home)
  • The Mortgage Professionals*
  • Cathy Campanaro Mortgage Agent*, FSCO Lic.# M09002032, Dominion Lending Centres Alliance # 11180
  • Should also be available from other mortgage brokers; to be confirmed
• Canada Small Business Financing Loan (CSBFL) program
  • TD Canada Trust (prime + 3%)
  • Should also be available at other banks; to be confirmed

• Solrcon and iSolara –Offer financing through TD Canada Trust at prime + 2.75% (Other retailers can also pre-arrange financing with TD Canada Trust by contacting the Indirect Credit Centre at (416) 983-3293 and beginning the accreditation process).

• Go Solar Ontario Financing Page
• Financing / Funding Agencies (when on site, click on Financing/Funding title to see agencies)