Financing opportunities for photovoltaic systems for the home in 2024

Funding opportunities for solar home systems in 2024

Investing in solar home systems is not only a way to reduce electricity costs, but also a step towards energy independence and a sustainable future. Although the initial capital costs can be significant, there are various financing options for photovoltaic systems that make this investment affordable for households.

As a system for generating energy from renewable sources, a photovoltaic system has no fuel costs and has close to 0 operating costs over its minimum 25 year useful life. At the same time, it generates electricity with relative predictability of production, and in the cases when it is used to cover own needs – at a fixed low cost of electricity, without the burden of fees for access to the network and transmission. This makes the photovoltaic system one of the most attractive investments on the market at the moment.

Bank loans for financing photovoltaic systems

While there are a variety of options for businesses, there is definitely a lack of specialized products in home solar lending. Most households have to rely on consumer credit if they decide to invest in a system to cover their own needs.

Procredit Bank is one of the few banks that have product for financing photovoltaic systems for households. With an interest rate of 3.95% and a maximum loan term of 7 years, the entire application process is done online. The bank has created a calculator that calculates the amount of the monthly installment in relation to the amount of the loan and the repayment period in months, with the maximum amount of the loan being BGN 100,000. With a loan amount of BGN 23,000 (which is an average value for the design, delivery and installation of a photovoltaic system with a power of 10 kW with a 10 kWh battery) and a repayment term of 5 years, the amount of the monthly installment is BGN 423.69 at an annual percentage of costs (APR) of 5.64%.

Advantages of PV bank financing

Bank financing provides quick access to the necessary funds for the construction of photovoltaic systems. Specialized loans offer lower interest rates and long repayment terms, making monthly payments more affordable for households.

State programs for financing photovoltaic systems for households

In order to increase the use of renewable energy in the final consumption of households, in 2023 The Ministry of Energy opened the first tranche of the procedure “National scheme for supporting households in the field of energy from renewable sources” within the framework of the NPVU. In order for a project to receive funding, it must relate to a residence where the applicant’s permanent address is, and there must not be a registered legal entity at this address. In the dwelling, it is necessary to use an inefficient source of heat energy (stove, boiler, fireplace) using solid fuel (wood, coal). Photovoltaic systems with a power of up to 10 kW are financed up to 70%, but with no more than BGN 15,000. The procedure was closed for applications in November 2023 and is currently under evaluation. The review and evaluation of applications is delayed due to administrative difficulties related to the lack of a sufficient number of evaluators. A total of 2,001 applications with a total value of BGN 44 million were submitted under it against a total budget of BGN 80 million for this tranche. A second tranche of financing under this scheme is expected to be opened in June-July 2024. Expect news from us as soon as we receive information.

Bridge financing from the Bulgarian Development Bank

Households with projects approved for grant funding for photovoltaic systems under the scheme must fully pay for the supply and installation of the equipment before receiving funds under the scheme. Given this fact, the Bulgarian Development Bank (BDB) has created special guarantee scheme for bridge financing of these projects. BDB has signed guarantee agreements with the Bulgarian-American Credit Bank, Investbank, Municipal Bank and Commercial Bank D for the financing of households investing in energy from renewable sources under the NPVU. The requirement is that the candidates have concluded a contract for b