Solar loans are rapidly becoming one of the most popular choices for financing solar today.
The reason for that is the fact that with solar loans you own the system and can receive all of the available rebates and incentives, including the federal Investment Tax Credit of 30 percent. In addition, you don’t have to pay for solar lease maintenance costs or profit margins.
Most importantly with the advent of zero-down solar loans (loans where no upfront payment is required), homeowners are able to immediately start saving on their power bill, while increasing the value of their home by the value of their panels.
Benefits of solar loans in a glance:
Loans are ideal for homeowners who:
Solar loans are loans issued expressly for putting solar panels on a house.
They have a principal amount, an annual interest rate, monthly payment requirements, and a payback period, just like any other loan.
For example, you might see a $20,000 solar loan with a 4.5% interest rate, and a fifteen-year payback period.
These loans work quite similarly to a home improvement loan or an auto loan.
Solar installers, banks, credit unions, PACE program participants and independent financing companies all provide loans, so the options for homeowners are increasing all the time. These providers are creating new loan options all the time, so it is becoming easier and easier for homeowners to find a loan that fits their exact residential solar financing needs.
Solar Loan Advantages:
There are three types of solar loans available today to consumers:
We drill into the differences in the table below, but the principal difference between the two is that secured loans use your home as collateral, while unsecured loans utilize the solar panels themselves as collateral.
|Type||Secured Solar Loans||Unsecured Solar Loans||Municipal Solar Loans (PACE)|
|What is used as collateral?||Home||Solar Panels||Home|
|Is there an FHA Guarantee?||Yes||No||Depends|
|Loan terms||5-20 years||5-20 years||Varies|
|Interest rate||3.5-6.5%||3.5-9%||3% and up|
|Is interest tax-deductible?||Yes||No||Yes|
|Special notes||Lower origination fees than unsecured|
Solar installers, banks, credit unions, and independent financing companies all provide loans, so the options for homeowners are increasing all the time.
If you like to find out more on solar loan rates check the list of our pre-screened providers who offer solar loans along with other financing options.
Interested in getting exact prices for the cost solar for your home? Get competitive solar quotes from qualified, trusted installers in your area. To see an estimate for how much you could expect to save and how much a solar system would cost, try our solar calculator.