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Solar Financing : Peer to Peer Lending (P2P)

Perhaps the only thing more creative about solar power than the technology itself is the vast number of ways that people are financing the purchase and installation. This is likely due to the fact that it's a fairly large chuck of change up front ($10,000-$25,000) and the initial return on investment is usually no more than $100/month in electricity savings. This equates to a scenario that won't be appealing for most consumers, unless they're already gung-ho for the green movement. Most people who purchase and use solar power like the ancillary benefit of reducing their carbon footprint, but it's often not the highest on the priority list; rather, it's a modern form of alchemy, and if tomorrow a technology came out that turned water to gasoline with no emissions, we'd all likely pay whatever price necessary to get a hold of it. This is generally the reason that solar power purchasers are savvy enough to find some unique and sometimes peculiar funding sources, which brings us to peer-to-peer funding.

P2P funding is not exclusive to the solar power community by any means, but solar is a perfect use case for this new form of lending. If you haven't heard of it, P2P lending is essentially a loan where instead of a bank, there are a group of tens, if not hundreds of lenders all contributing small amounts to add up to the requested amount. A middleman broker (usually a web site) will allow users to request money or loan money through the site and will generally post the anticipated rate of return for the lender. If this sounds a little familiar, it's a very similar concept to the micro loans that have become so popular in the third world, but with P2P lending, you generally get involved as an investor to make money and as an applicant in order to purchase something or to absolve some outstanding debts.

Solar power systems can be quite costly; a good system for an average sized home will routinely cost around $15,000, so a loan will be a great way to offload some of this cost on the front end. Keep in mind that you don't have to request the full amount; you may wish to pay for half with cash and do a P2P loan for the remainder. Check out all of the sites, read the reviews and decide which one seems safe, fair and easy for you to use. Make sure that the interest rate is reasonable and calculate your total cost of the loan of the life of the loan compared to the savings you'll receive from the reduced electricity bills. Ultimately, its one choice out of many to fund your solar power system, but it may fit the bill for a good portion of folks looking to get into solar power.

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