Everything You Need to Know About Solar Loan Providers and Loan Rates

What is the best way to finance solar panels?

The best way to finance your solar panels depends on a wide range of factors. It’s important to research and compare a variety of solar loan providers and loan types. The lowest loan rates usually offer the most savings, but don’t ignore the other terms.The structure, fees and finer details can also determine whether a loan is suitable for you.

• Banks
• Credit Unions
• Solar Panel Manufacturers
• Utilities
• Municipalities

Banks

Most banks offer secured and unsecured solar loans.

Secured loans usually require substantial home equity to use as collateral. In return, you’ll often get lower solar loan rates, fewer fees, and tax-deductible interest payments. Unsecured loans don’t require collateral and are usually approved more quickly. However, they tend to have higher solar rates and additional fees.

PACE loans are repaid through property tax assessments, but the loan rates are generally much higher. Finally, on-bill financing allows you to make loan payments via charges on your monthly utility bill.

Credit Unions and Solar Financing Companies

Alternatively, credit unions and solar financing companies may provide less costly loans specifically for solar energy. Many solar panel manufacturers and installers offer loan services during the installation process. Several government-backed loan programs also provide low-cost financing to eligible homeowners.

How can you qualify for the best solar loan rates and terms?

Improve Your Credit Score

First and foremost, the rates you’ll receive depend on your creditworthiness. Every lender uses their own set of criteria, so be sure to explore all your options.In some cases, your financial institution may also offer you more favorable terms. Whenever possible, apply for pre-qualification to receive more accurate rates without undergoing multiple hard credit inquiries.

Of course, the most reliable way to get excellent rates is to improve your creditworthiness.You can start by requesting your credit reports, carefully reviewing them and promptly disputing any mistakes.

Lower Your Debt

Next, work on paying down your outstanding debts before applying for a new loan. If you have any accounts that were placed in collections, focus on paying those off first. These actions will help you raise your credit score and qualify for better solar loan rates.

However, it’s important to note that your credit score isn’t everything. Solar loan providers typically also base their decisions on your debt-to-income ratio. This metric is used in assessing your ability to pay and in setting your loan terms. Consider whether you can improve this ratio by reducing your debt or increasing your earnings.

Which Lender to Choose for the Best Solar Loan Rates?

By comparing the available rates, you’ll be able to make a confident, informed decision that’s best for you.

Trying to finance solar energy systems doesn’t have to be an intimidating process. From personal bank loans to specialty financial products, solar loan providers offer solutions for nearly everyone.

Program Description

Alternatives Federal Credit Union

This home equity loan is available in up to 15 year terms for amounts up to $100,000. You pay interest for the first 18 months. You can even use the loan to pay for other home efficiency upgrades.

Connecticut Green Bank

This is the nation’s first state-funded green bank. Their mission is to make solar and energy improvements more accessible with flexible terms. It offers no money down loans with low-interest rates, a generous rebate program and a path to a solar lease.

Center for Energy and Environment

This Minnesota nonprofit provides low-interest loans for solar PV systems. *APR is based on a loan amount of $50,000 and a term of 15 years. The loan is secured by a mortgage on the property.

Milwaukee Shines Solar Loans

This collaboration between the City of Milwaukee and Summit Credit Union offers low-interest, fixed-rate loans for home solar. Financing is available for $1,000 to $20,000 and terms up to 15 years.

Clinton Savings Bank – Mass Solar Loans

This local bank offers to finance in select towns in Massachusetts. Loans are available for amounts from $3,000 to $35,000. You can even re-amortize within 18 months if you want to take advantage of lower rates or lower monthly payments. Lower-income households may qualify for even more incentives with this offering.

Dividend Finance

Dividend is a company that specializes in financing renewable energy upgrades across the nation. They offer three loan options in most states, all with $0 down. They even have an option for solar plus storage.

Eagle Community Credit Union

California homeowners looking to go solar can apply for loan amounts from $5,000 up to $50,000 with terms ranging from 60 months to 180 months. Installations must be done by approved contractors. 

Education Employees Credit Union

Solar financing is available from $100 to $40,000 with low-interest rates. Products and services purchased must meet the Energy Efficiency Standards of the credit union. No home equity, appraisal or collateral is required to apply.

Elevations Credit Union

The Elevations Energy Loan offers low-interest, fixed-rate financing for solar and energy upgrades. Loan amounts and term options are flexible.

Energy Loan Network

This network connects homeowners to lenders with fixed-rate, low monthly payment financing options for solar installations.

First Citizens’ Federal Credit Union

This credit union offers fixed-rate solar loans for 5 to 19-year terms. Available to Massachusetts homeowners, these loans are secured by a mortgage on the property.

Franklin First Federal Credit Union

 You can only lend if you are a  member of the credit union. To qualify for membership the borrower must live, work or go to school in Franklin County.  Loans are available from $3,000 to $60,000 with 10 to 15-year repayment terms. Unsecured loans are available and you have the ability to re-amortize within the first 18 months. 

GreenBiz
Green Biz Financial

They offer the following loan terms: 5, 7, 10, 12, 15, and 20 years. Rates are based on the customer’s credit score. Loans to finance Solar, Battery Storage, Generators, HVAC, Windows, Doors, Roofing(must be combined with Solar). They have a low, flat dealer fee.

Michigan Saves

This nonprofit is dedicated to making energy improvements easier for all Michigan energy consumers. They connect homeowners with approved contractors and lenders that provide a low fixed-rate loan with flexible terms. Financing ranges from $1,000 to $50,000 up to 15 years.

PSE&G

When you finance through PSE&G, you can repay your Solar Loan using Solar Renewable Energy Credits. PSE&G guarantees a minimum value for your credits, so price fluctuations are less of a problem. A few fees apply to those wishing to take advantage of this program, so include those fees when calculating the installation cost.

Provident Credit Union

This credit union solar loan offers fixed-rate options for up to $35,000. Repayment terms are available for up to 20 years.