Go ahead and Google "Dealer Fees" and everything you'll find will pertain to car dealerships but make no mistake about it, they exist in solar financing too and it's helpful to understand how they work.
Most people don't buy solar cash, because frankly it's not a smart cash investment. When you finance solar the solar lender charges dealer fees to your installer that are typically hidden from the customer. So let's say you are borrowing $30,000 for solar, the lender may only pay the installer $24,000 and still put you on the hook for $30,000. Because the installer is only getting a portion in this case, they'll need to mark up their system price unless you pay cash.
For exmample, if you get 3.99% for 25 years, these loan terms will come with a high dealer fee but if you received 10% for 20 years, you would have a minimal dealer fee if any fee at all.
So, are we saying you should pay cash to save money? No. Not at all. Which option you choose is up to you, but in most cases paying cash isn't the best financial decision.
The decision that is often made and makes no sense at all is the wait to pay cash move. Let's say it takes you two years to save up the cash. In that two years every single dime paid to your energy provider is now down the drain when that could have been paid to a solar loan where you were paying the principal down. All energy payments to your utility co. are 100% interest. Do the math.
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