Best Solar Panel Loans to Consider in 2024

With the average cost of solar panels (after tax credits) reaching about $20,498 nationwide, finding the right solar financing options is well worth your time. Fortunately, several solar financing companies offer excellent unsecured loans with competitive interest rates and flexible repayment plans. Our team of financial experts reviewed and ranked more than 30 online lenders to help you get funded, so read on to learn which loans for solar systems we recommend.

Because personal loans can have a big impact on your finances, it’s important to spend a little time reviewing your options to make sure you’re not overpaying. Also, it’s usually worth comparing your rates across multiple lenders to ensure you’re getting the best deal for your credit history and financial situation.

Our team of financial experts ranked lenders based on our ratings methodology for personal loans and found the best emergency loans on the market. This ratings methodology evaluates lenders based on loan length, APR, repayment terms, user experience, customer service, credit score history, banking and credit union use, and additional features.

Best Solar Panel Loans for 2024 - Full Overview

The lender reviews below can help you determine which solar power loans you may be able to qualify for, their basic rates and terms, and how to apply.

How to Choose the Best Solar Panel Loan?

As you search for the best way to fund solar panel installation, you should spend some time comparing lenders based on criteria that will impact your borrowing costs and lender experience. Our experts studied and compared the following factors for each of the companies that made our ranking.

• Loan features: Look for solar financing companies that offer loan amounts that fit with your project, as well as flexible repayment options that can suit your budget and your needs.
• Interest rates and fees: Compare solar loan interest rates across multiple lenders, and look for a loan company that charges minimal fees or no fees.
• Application process: Make sure you select a solar financing company that lets you get prequalified without any impact to your credit. Also look for providers who let you complete your loan application online.
• Qualification process: Have a general idea of the loan requirements for lenders you're considering, which may include a minimum credit score, a minimum income, or a maximum debt-to-income ratio.
• Customer support: Look for solar loan providers who list multiple ways to contact them online, which can include phone support, email customer service, and an online chat function.
• Online user reviews: Compare reviews from previous customers on websites like Trustpilot and the Better Business Bureau (BBB).
• Perks and Bonuses: Finally, check to see if any lenders offer auto-pay discounts, refer-a-friend programs, or additional perks.

What is a Solar Panel Loan?

A solar panel loan is an unsecured personal loan that lets homeowners access the cash they need for this environmentally-friendly investment. These loans come with fixed interest rates, fixed monthly payments, and fixed repayment plans that never change. Many solar panel loans also come with no origination fees, no prepayment penalties, and no hidden fees.

How Much Do Solar Panels Cost?

According to a recent study from Energy Sage, solar panels cost about $20,498 on average when you take into account a cost of $2.77/W for a 10 kW system and the 26% federal solar tax credit that's currently available through the end of 2022.

According to the data:

• Solar panel installation set consumers back anywhere from $17,538 to $23,458 on average last year (taking the federal tax credit into account).
• The cost of solar panels may be high, but prices for installation and equipment have actually fallen by 13% over the last five years.

Several important factors can impact the cost of installing and maintaining solar panels, including the size of your home, the size of the solar system being installed, the characteristics of your roof, and local costs for energy and labor. Meanwhile, the state you live in also plays a significant role in how much you'll pay for solar panel installation.

States with the lowest costs for solar power installation:

States with the highest costs for solar power installation:

How Much Money Do You Save With Solar Panels?

While solar panels require an upfront investment of money, they can pay for themselves in long-term energy savings if given enough time. When it comes to how much you'll save by installing a solar system on your roof, this depends on factors such as:

• Size of your roof
• Angle of your roof
• Number of hours of direct daily sunlight
• Local electricity rates

Another factor that comes into play is federal tax credits, which can ebb and flow over time.

That said, you can easily find recent data that estimates how much homeowners are currently saving with their solar panel systems. Per recent analysis from EnergySage, the following states show the average 20-year savings for installing a home solar system:

Solar Panel Tax Benefits

According to the U.S. Office of Energy Efficiency and Renewable Energy, Congress passed an extension of the Solar Investment Tax Credit (ITC) in December of 2020. This extension allows homeowners to receive a 26% tax credit for solar systems installed through the end of 2022. However, the ITC credit drops to 22% for systems installed in 2023, and the credit will expire in 2024 if Congress does not take steps to renew it.

Also note that several states offer their own tax credits for solar system installation, which you can compare on the NC State University website. For example, the state of Minnesota offers a solar energy sales tax exemption, property tax incentives, and solar rebate programs that vary by geographic region.

Leasing vs. Buying Solar Panels — Which Is Better?

Generally speaking, buying your own solar panel system will lead to greater energy savings over time. This is partly due to the greater return-on-investment (ROI) you'll receive when you own your own system and avoid lease payments, but it's also due to the fact you can take advantage of federal and state tax credits that apply.

That said, leasing a solar system can make sense for homeowners who don't want to deal with maintenance or repairs required for a solar panel system, as well as those who don't have the cash to invest in a system upfront.

How to Get a Solar Panel Loan?

Applying for solar system financing can look differently depending on where you live, how much you need to borrow, and the solar panel financing company you choose to use. However, the following steps provide a general idea of what is required.

• Step 1: Get a quote for a solar system for your home, then look for solar financing companies that offer loan amounts that can suit your needs.
• Step 2: Compare lenders online to look for companies that offer flexible repayment options, competitive rates, and monthly payments you can afford.
• Step 3: Check your rate online with at least three solar financing companies.
• Step 4: Compare loan offers available to you and see how they stack up in terms of their rates, terms, and monthly payment requirements.
• Step 5: Look at loan offers to check for hidden fees, including origination fees and application fees.
• Step 6: Decide on a solar financing company and fill out the loan application with your personal details, Social Security number, employment information, income, and more.
• Step 7: Wait to see if your loan application is approved, which could take place within hours or a few business days.
• Step 8: Watch your bank account to see when your funding shows up, and confirm the amount you borrowed is correct.
• Step 9: Use the funds to pay for your new solar system, then begin repaying your solar panel loan based on the terms you agreed to upfront.

Other Types of Solar Panel Financing

If you're in the market for a solar panel loan, you should know that there are more financing options to consider outside of personal loans. Consider the alternative options to fund your solar energy project.

• 0% APR credit cards: Some credit cards offer 0% APR on purchases for a limited time, which can make them ideal for solar panel financing. However, you should note that introductory rates don't last forever, and that credit cards currently charge an average APR over 16%.
• Rewards credit cards: Rewards credit cards can help you earn travel points or cash back for the cash you spend on your solar investment. Once again, however, the interest rates charged by credit cards can be much higher than personal loans.
• Home equity loans: Home equity loans let you use the equity in your home as collateral for your loan. Similar to personal loans, these loans come with fixed interest rates, fixed monthly payments, and fixed repayment terms.
• Home equity lines of credit (HELOCs): Home equity lines also let you use the equity in your home as collateral, and they extend a line of credit you can borrow against when you need it. However, HELOCs typically come with variable interest rates, and your monthly payment will fluctuate based on how much credit you access.

Conclusion

With solar panel systems costing thousands of dollars no matter where you live, finding the best financing option for this investment is crucial. After all, installing a solar system is about more than helping the environment — it's also about reducing your energy expenses and saving money over the long-term.

With that in mind, you'll want to focus on solar lending companies that offer the best rates and loan terms. Also watch out for fees associated with solar panel loans, including origination fees, prepayment penalties, application fees, and hidden fees.

The best solar panel loans we chose for this ranking provide an excellent place to start your research, so dive into the details and don't stop until you find the right solar financing for your needs.