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SunPower Corp. (SPWR - Analyst Report) has teamed up with Community First Credit Union to launch a low-interest solar loan program, SunPower Solar Loan, for the homeowners in Australia.
Community First Credit Union will disburse unsecured loans to the borrowers, who meet required criteria. Both the members and non-members of Community First Credit Union can utilize this loan. The maximum limit of available loan is up to $31,781 (AU$35,000), with tenure up to 10 years. However, the borrowers can repay principal on the loan before time without paying any penalty.
As far as the rate of interest is concerned, Community First Credit Union will offer an introductory variable rate starting at 6.99% per annum (the rate is current as of Aug 15, 2013 and subject to change without notice) or 7.10% per annum comparison rate (different amounts and terms will result in different comparison rates) for the applicants, starting from now to Dec 31, 2013. Community First Credit Union also provides fixed rate of 7.49% per annum (the rate is current as at Aug 15 2013 and subject to change without notice) or 7.52% per annum comparison rate (different amounts and terms will result in different comparison rates) for the first 5 years and then reverts to the variable interest rate at that time.
The objective of introducing the SunPower Solar Loan is to encourage the Australians to set up high-efficiency solar system on their rooftops, while enjoying reasonable payment alternatives. The installation of solar system also enables the users to meet their energy requirements at a lower cost.
We note that it is not the first time SunPower is offering easy loans for the residential customers. In 2009, the company introduced a 5-year solar loan program for the homeowners in the U.S. The loan was offered through Addison Avenue Federal Credit Union of Palo Alto, Calif. This initiative helped the company to market the solar power systems at an affordable price.
We consider the low-interest-loan-offering as a positive move for SunPower. Currently, the demand for solar products is high in the Asia-Pacific (APAC) region primarily due to growing awareness about its emission-free nature. SunPower’s second-quarter 2013 revenues from the APAC segment increased 110% year over year to $101.2 million.
In the scenario of high demand for solar products, we expect the loan offering to act as catalyst to improve SunPower’s future earnings. The homeowners of Australia will likely take advantage of installing solar system on their rooftops without making substantial initial investments, which is expected to improve the company’s order booking.
SunPower currently has a Zacks Rank #1 (Strong Buy). Other solar module manufacturers, including ReneSola Ltd. (SOL - Analyst Report), JinkoSolar Holding Co., Ltd. (JKS - Snapshot Report) and Yingli Green Energy Holding Co. Ltd. (YGE - Snapshot Report) also look attractive, each with a Zacks Rank #2 (Buy).