Best solar panel loans in 2021



Company Why did we choose it Maximum term / maximum loan amount
Dividends Best overall 25 years old / USD 50,000
SoFi Best for large loans Seven years / $ 100,000
New American funding Best at a fixed rate 30 years / $ 510,400 (up to $ 765,600 in higher cost areas)
1st Community Credit Union Best for long maturities 21 / $ 100,000
LightStream Best for fast financing 12 years / 100,000 US dollars
Update Best for bad credit history Five years / $ 50,000

Frequently Asked Questions (FAQ)

Can you fund solar panels?

You can finance the purchase and installation of solar panels either with a dedicated solar loan or an installment loan for personal renovation or home renovation. You can even finance your solar project with a home loan, line of credit, or a refinanced mortgage. Each funding method has its own pros and cons, which affect the length of your term, the amount of your monthly payment, and the annual rate.

How much does it cost to finance solar panels?

Many solar and installment loan lenders do not charge a processing fee and do not require you to make a down payment on your project. In such cases, you can buy your panels and install them without money out of your pocket. The monthly payments you ultimately agree to will be determined by your credit profile, DTI, maturity, and annual interest rate.

Most solar panel loans are between three and 12 years. There are a few exceptions that fund for 20 or 21 years, and if you are using a Fannie Mae HomeStyle Energy Efficient Mortgage, you can combine an annual interest rate potentially below 3% and a 30 year mortgage that turns your solar project into your own note for one low pay.

When do solar panel loans pay off?

Add up the total cost of the system to figure out if it is worth investing in solar panels. This will be the offer you will receive from the contractor for the purchase and installation of panels. Then, subtract any discounts or tax breaks that are available to you where you live. The difference is your actual cost.

Then calculate your annual energy savings, and remember to add to that number any income you get from selling energy back to your utility provider. This amount, which combines your savings with your incentive income, is called your annual benefit.

Finally, divide your actual costs by the annual benefit. The answer is the number of years it will take you to pay off your solar energy loan. If you plan to live in your home for several years after the payback period ends, then a solar panel loan will be wise for you.

Quick example:

  • The cost of panels and installation = $ 30,000
  • Benefits, tax credits = 10,000 US dollars.
  • Actual cost = $ 20,000 ($ 30,000-10,000).
  • Annual savings = $ 100 per month x 12 months = $ 1200.
  • Income Potential = $ 110 per month x 12 months = $ 1,320.
  • Annual allowance = $ 2,520 ($ 1,200 + $ 1,320)
  • Payback period = $ 20,000 / $ 2,520 = 7.9 years.

Are you going to live in the house for eight years? You basically break even. Do you plan to live in the house for 20 years? Then the project pays off. The lifespan of a solar energy system is on average 25 to 30 years.

Are solar panels better funded or leased?

Funding or renting solar panels depends on your financial goals and incentives, which may or may not be available in your area.

Funding may be your best option if you want to reap the financial benefits of installing solar panels, not just the environmental benefits. Affordable federal and state incentive programs can lower your tax burden, lower the overall cost of the system, and increase the market value of your home.

You can rent your panels if you want to avoid the responsibility of maintaining or repairing your solar panel system or if you are not eligible for government tax benefits.

How do we select the best solar panel loans

We researched 12 lenders before selecting the top six. To find out which company will win in each category, we identified the strengths and weaknesses of each company’s loan programs, terms, rates and commissions.

Lenders may have offered a wide range of APRs, but in order to get on our list, they had to provide excellent credit ratings with competitive rates, as well as adapt to candidates with less than stellar credit profiles. Overall, most of our winners looked at the candidate as a whole, rather than just reacting to the credit rating as a disqualifying factor. We also favored lenders with longer loan terms so that borrowers were able to keep their monthly payments as low as possible. Finally, we were looking for a simple application process, whether through an online form or easy to find a phone number.


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