The Federal Reserve cut interest rates yesterday, and while it’s meant to support the broader economy, here’s how it helps homeowners go solar.

On Wednesday, the Fed cut interest rates by a half point, lowering the benchmark lending rate to 4.75-5.25%. Over the past few years, higher interest rates meant that financing a solar system was more expensive, which pushed out the break-even point for those investing in solar. Many homeowners and business owners became hesitant to take the plunge.

But now, the Fed’s September rate cut – combined with dropping installation costs – makes going solar even more attractive. Homeowners will see faster returns on their solar investments compared to a year ago. According to a blog by EnergySage, this 50-basis-point reduction means that a $30,000 home solar system could cost around $3,000 less over the course of a 20-year loan, thanks to reduced interest payments.

Even though solar is a solid investment in any interest-rate environment, lower rates make the math even better. As Spencer Fields, director of insights at EnergySage, puts it: “This rate cut will save solar shoppers thousands of dollars in interest over the lifetime of their solar panels. Most solar adopters finance their system with a loan, so dropping interest rates will help make solar more affordable and likely drive up demand for new commercial and residential solar installations.”

How do lower interest rates make rooftop solar cheaper?

Your savings with solar depends on several factors, including local electricity prices, how much energy you use, and state policies like net metering. But if you’re financing your system with a loan, the interest rate is a critical part of the equation.

Just like with a mortgage, the lower the interest rate, the less you pay over time. The average home solar panel system costs about $30,000, and according to EnergySage, 85% of homeowners finance their solar system. A 4.75% interest rate on a $30,000, 20-year loan would cost you around $16,500 in interest. At a 5.50% interest rate, that same loan jumps to $19,500 in interest. That’s a $3,000 difference just from the Fed’s rate cut.

And if you manage to pay off your loan in less than 10 years, the combination of the rate cut and early repayment could save you as much as $10,000 in interest for a 20-year loan.

It’s also important to consider the full cost of the loan. Fees and other charges can vary depending on your lender. That’s why it’s crucial to look at the Annual Percentage Rate (APR), not just the interest rate, as the APR gives you the full picture of your costs.

A faster payback period for solar

Solar isn’t just a green choice – it’s a smart financial move. Many homeowners pay off their solar loans in less than 10 years, which means everything after that is pure savings. If you lock in a lower interest rate, you’ll hit that payback period even faster.

EnergySage reports that the average homeowner using their Marketplace pays off their solar loan in under 10 years, even if they take out a 20-year loan. With rates down, you’ll be able to reach that milestone sooner and save even more in the long run.

Should you wait for interest rates to drop further?

There’s a lot of talk about the Fed cutting rates again by the end of the year and possibly more in 2025. But trying to time interest rate changes can be as tricky as timing the stock market. While the Fed has hinted at future rate cuts, nothing is set in stone. If inflation shifts or the job market takes an unexpected turn, the Fed could adjust its course. So while it’s tempting to wait, there’s no guarantee rates will keep falling.

Read more: Here’s how much money you’ll get with the Inflation Reduction Act

If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.

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Chinese automaker Maxus launched Europe’s first AWD electric pickup, beating Toyota, Ford, and several others to the market. The new Maxus eTerron 9 is slightly larger than a Ford Ranger and has up to 267 miles (430 km) range.

Maxus, initially under British van maker LDV Group, was bought out by China’s SAIC Motor in 2010.

The Chinese brand launched the new eTerron 9 EV pickup at the IAA Hanover Auto Show in Germany this week. It follows the Maxus T90EV, the UK’s first electric pickup that was only offered in RWD.

Powered by two electric motors (125 kW/170 hp front and 200 kW/272 hp rear), Maxus’ new eTerron 9 packs a combined output of 325 kW (442 hp). It can also tow up to 7,700 lbs with nearly 1,400 lb (620 kg) max payload.

With a 102 kWh LFP battery, the Maxus eTerron 9 is rated with up to 267 miles (430 km) WLTP driving range. It can also be charged (20% to 80%) in about 40 minutes with up to 115 kW at fast charging stations.

Meet Europe’s first AWD electric pickup

An included All-Terrain System (ATS) unlocks six driving modes: Normal, Mud, Sand, and others to fine-tune your drive.

Maxus said an optimized venting system and battery design improves range by 18% in cold weather compared to other EVs on the market.

The electric pickup also features bi-directional charging to power work sites, camping equipment, tools, or other external electronics.

At 5.5 meters (18 ft) long, the Maxus eTerron 9 is slightly bigger than Ford’s Ranger, which is 5.37 meters long.

Maxus will open orders for Europe’s first AWD electric pickup in October. Deliveries are scheduled to begin in January 2025.

Although prices have yet to be announced, the new model is expected to sit above the T90EV, which starts at £49,950 ($66,300) in the UK before VAT. Maxus said more details will be revealed shortly.

Source: Top Gear, Maxus

Battery recycling specialist Redwood Materials has just gained another major automaker as a client, signing a partnership with BMW of North America. Redwood will help recover and recycle end of life lithium-ion cells and their rare materials from BMW Group marques like MINI and Rolls-Royce.

Today’s latest partnership announcement only helps solidify Redwood Materials’ current status as the industry leader in battery recycling. The company, founded in 2017 by Tesla co-founder and former CTO JB Straubel, has found quick success in creating a more circular economy around lithium-ion batteries and their precious materials, such as cobalt, copper, lithium, and nickel.

In the past few years especially, Redwood has earned the business of several major OEMs, including Ford, Volkswagen Group, and Volvo. In turn, Redwood has recycled those brand’s batteries and resold their materials and components to companies like Panasonic and Toyota for a new life in EVs.

The company is quite good at what it does, too. In 2023, it was touting 95% efficiency in a battery recycling pilot, which helped it garner huge government loans to build reborn EV batteries and a huge company valuation (over $5 billion as of September 2023).

As Redwood Materials continues to expand its battery recycling operations on two continents, it continues to add clients to its Rolodex, which now includes BMW.

Redwood to offer battery recycling to BMW and MINI in US

BMW of North America shared details of its new partnership with Redwood Materials today, which includes battery recycling of lithium-ion cells from all-electric, plug-in, and mild hybrid vehicles from BMW Group marques in the US, including MINI, Rolls-Royce, and BMW Motorrad.

BMW states that Redwood will now work directly with the automaker’s network of nearly 700 locations across the US, which includes dealerships, distribution centers, and other facilities. The battery recycling specialist will help recover BMW’s end-of-life lithium-ion cells and take them to its facilities in Reno, Nevada, where it can do what it does best – recycle and refine their critical minerals. Redwood’s chief commercial officer, Cal Lankton, spoke about the new partnership with BMW:

The transition to electric mobility presents a tremendous opportunity to rethink how we manage the batteries that power our clean energy future. Our partnership with BMW of North America ensures responsible end-of-life battery management that will improve the environmental footprint of lithium-ion batteries, help decrease cost and, in turn, increase access and adoption of electric vehicles.

As mentioned above, Redwood promises that 95% to 98% of the critical minerals recycled will be returned to the battery supply chain and put into new EV models. Battery recycling is a critical yet nascent industry for EV adoption and sustainability, as the current materials inside EV batteries are nearly infinitely recyclable and are not lost in their lifetime of usage.

Redwood’s recycling processes are also a far better option than anyone else today since they have a significantly smaller environmental impact than conventional mining or other recycling technologies. Redwood states its recycling and refining of said materials reduces energy by 80%, CO2 emissions by 70%, and water by 80%.

As we’ve previously reported, Redwood is in the process of erecting a new battery recycling campus in Charleston, South Carolina, not far from BMW Group’s production plants in Spartanburg and Woodruff.