Best Solar Panel Loans in 2022

The essential

You can finance the purchase and installation of your solar panels with a specially designed solar panel loan, personal loan or home improvement loan, or a mortgage. The amount of loan you need, your ability to make large payments, your credit profile and your income will determine whether you want to apply for a loan that you can repay in three, five or seven years or one that spans 20 year. at 30 years old.

With a 25-year term option to keep your monthly payments low, loan amounts large enough to cover the majority of home panel installations, annual interest rates as low as 3.99%, manufacturing warranty, no original penalty or prepayment fees, and a 10-minute loan application, Dividend Solar Finance stood out as our best.


Frequently Asked Questions

Can you finance solar panels?

You can finance the purchase and installation of solar panels either with a specific solar loan or with a personal installment or home improvement loan. You can even finance your solar project with a home equity loan, line of credit or refinanced mortgage. Each financing method has pros and cons that influence your term length, monthly payment amount, and APR.

How much does solar panel financing cost?

Many solar panels and installment lenders do not charge assembly fees or require a down payment on your project. In these cases, you can buy your panels and have them installed without paying any money. Your credit profile, DTI, length of term and APR will determine what monthly payments you will eventually accept.

Most solar panel loans range from three to 12 years. There are a few outliers that finance for 20 or 21 years, and if you use the Fannie Mae HomeStyle Energy Efficient Mortgage, you can combine a potentially less than 3% APR and a 30-year mortgage that wraps your solar project in its rating. for a low payment.

When are solar panel loans worth it?

To calculate whether investing in solar panels is worth it, add up the gross cost of the system. This is the quote you receive from a contractor for the purchase and installation of the panels. Then subtract any tax refunds or credits available to you where you live. The difference is your actual cost.

Next, calculate your annual electricity savings and don’t forget to add to this figure any revenue you will receive from selling your energy to the utility provider. This sum, which combines your savings with your incentive income, is called your annual benefit.

Finally, divide your actual cost by your annual profit. The answer is how many years it will take you to pay off your solar loan. If you plan to live in your home for several years after your payback period ends, a solar panel loan would be right for you.

Quick example:

  • Cost of panels and installation: $30,000
  • Incentives and tax credits: $10,000
  • Actual cost: $20,000 ($30,000 – $10,000)
  • Annual savings per year: i.e. $100 per month x 12 months = $1,200
  • Potential income: i.e. $110 per month x 12 months = $1,320
  • Annual benefit: $2,520 ($1,200 + $1,320)
  • Payback period: $20,000 / $2,520 = 7.9 years

Do you plan to live in the house for eight years? You reach the break-even point. Do you plan to stay in the house for 20 years? So the project is worth it. The lifespan of a solar energy system is on average 25 to 30 years.

Is it better to finance or rent solar panels?

Financing or leasing your solar panels depends on your financial goals and whether or not incentives are available in your area.

Financing may be your best option if you want the financial benefits of installing solar panels rather than just the environmental benefits. Federal and state incentive programs available can reduce your tax burden, lower your gross system cost, and increase the market value of your home.

You may prefer to rent your panels if you want to avoid liability for maintenance or repairs to your solar panel system or if you do not qualify for government tax credits.


How We Choose The Best Solar Panel Loans

We researched 12 lenders before selecting these six. To determine which company would win each category, we uncovered the strengths and weaknesses of each company’s loan programs, terms, rates and fees.

Lenders may have offered wide APR ranges, but to make our list they had to accommodate excellent credit scores with competitive rates while accommodating applicants whose credit profiles are less than stellar.

In general, most of our winners looked at the whole candidate rather than just reacting to a credit score as a disqualifier. We’ve also favored lenders with longer term loan options, so borrowers have the flexibility to keep their monthly payments as low as possible. Finally, we looked for a simple application process, whether through an online form or an easy-to-find phone number.