SunPower Corporation (SPWR - Free Report) has teamed up with Admirals Bank to launch a preferred-interest loan program, SunPower Loan program, for the homeowners of all 50 states of the U.S. and Washington, D.C. Admirals Bank will provide a $200 million worth loan facility to SunPower for residential solar programs over the next two years.
Per the program, Admirals Bank will disburse loans of up to $60,000 to each homeowner interested in installing a roof-mounted SunPower solar system. The granting of the loan will however be subject to credit approval.
Boston, MA-based Admirals Bank is focusing on home improvement lending initiatives in the residential solar and renewable energy industry. To strengthen its solar financing operations, the company opened a renewable energy lending division, Admirals Alternatives.
The objective of introducing the SunPower Loan program in the U.S. is to encourage homeowners to install high-efficiency solar systems on their roofs. The installation of solar systems also helps users to meet their energy need at a lower cost.
In addition, the solar system users will also get the first 25-year combined power and product warranty called the SunPower warranty. Besides, the borrowers maybe eligible for the federal tax credit of 30% and extra incentives provided by several states and municipalities.
We note that SunPower has been steadily offering loans to residential customers. In Apr 2014, SunPower and Google Inc. jointly started a new financing program worth around $250 million to support residential solar lease projects. In Jan 2014, the company in collaboration with Bank of America Corporation’s (BAC - Free Report) unit Bank of America Merrill Lynch launched a $220 million financing program for residential solar lease projects.
The demand for solar products is gradually rising primarily on the back of growing awareness among the masses about its benefits. Recently, the Obama administration rolled out its plan to curtail carbon emissions from power plants by 30% by 2030 from 2005 levels. The proposed rule is expected to come into effect next year.
It is a widely accepted fact that coal-fired power generation is one of the primary culprits behind rising carbon-emission levels. The popularizing of residential solar across the U.S. will help curb CO2 levels and drive the green energy sector to new highs.
We consider the offering of the preferred interest bearing loans as a positive move from SunPower. Homeowners are likely to take advantage of this benefit and install solar systems on their roofs without making substantial upfront investments. Solar bookings are likewise expected to get a boost.
SunPower currently has a Zacks Rank #3 (Hold). However, another better-ranked solar module manufacturer is JA Solar Holdings Co., Ltd. (JASO - Free Report) , carrying a Zacks Rank #1 (Strong Buy).