top of page

A Basic Guide on Solar Financing

In the US, there are over 2.5 million homeowners and growing that have installed solar. A single solar system can last for up to 25 years, and beyond with little maintenance. Investing in solar can help to reduce all or most of your electricity bill.

However, the upfront cost of a solar system can be quite high. You must understand the options available to you when it comes to financing your solar system. This way, you can make the right choice.


You can obtain a loan to buy a solar system. At some banks, credit unions, and solar installation firms, you can obtain zero-down financing loans. The different types of loans are:

Personal Loan

A personal loan is a great option to finance a solar system. You can opt for one with fixed payments and fixed interest rates. Personal loans are often unsecured, which means you do not need to put up the home as collateral or have a lot of home equity to qualify. In most cases, the only requirement is a good credit score.

PACE Loans

A residential property assessed clean energy (PACE) loan is an option offered in some states. This loan can be tied to the property, which enables you to pay it back as part of the annual property tax. If the home is sold, the loan is transferred to the new buyer.

Home Equity Loan

A home equity loan is like a personal loan. It has fixed interest rates and monthly payments. However, you can borrow against the home.

Home Equity Credit Line

You can use a credit card to pay the initial cost of installing solar panels. However, these loans come with varying interest rates.

FHA and Fannie Mae loans

These are mortgage loans from the government. They can be used to get solar panels for the home, to make various renovations to the home, and to upgrade a home, making it more energy-efficient.


A solar system lease works just like leasing a car. You can lease the solar system to lower the upfront cost of installation. Under a solar lease, the financial will own and maintain the system on your roof. You will then pay a fixed monthly rate to the company.

Power purchase agreement (PPA)

Under a PPA, the terms are quite similar to a lease. The difference is how much you pay and to whom. With a PPA, you will buy the electricity from the system from the owner of the solar system at a set rate. PPAs often come with a zero-down option. Thus, you can quickly begin to see monthly savings on your bill. Some PPAs come with the option to raise the rate you pay over time. You must read the agreement carefully when picking your options.


Today, there are numerous options to finance your solar system. It is worth noting that no matter which option you pick, once there is a solar system on your roof, it has been proven to significantly increase the value of the home.

9 views0 comments

Recent Posts

See All


bottom of page