Solar Loans: Compare Solar Panel Financing Options

Last updated on July 24, 2024
Written by 
Annie Millerbernd
Assistant Assigning Editor
Kim Lowe
Edited by 
Kim Lowe
Lead Assigning Editor
Fact Checked
Annie Millerbernd
Written by 
Assistant Assigning Editor
Kim Lowe
Edited by 
Kim Lowe
Lead Assigning Editor
Fact Checked

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Compare the best solar loans

NerdWallet reviewed more than 35 financial institutions to find the best personal loans for financing solar panels. These are our top picks.

SoFi
5.0
Read full review
Est. APR8.99-29.99%
Est. APR8.99-29.99%
Loan amount$5K-$100K
Loan amount$5K-$100K
Min. credit scoreNone
Min. credit scoreNone
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on SoFi's website
on NerdWallet
SoFi
Est. APR8.99-29.99%
Est. APR8.99-29.99%
Loan amount$5K-$100K
Loan amount$5K-$100K
Min. credit scoreNone
Min. credit scoreNone
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on SoFi's website
on NerdWallet
Pros
  • Multiple rate discounts.
  • Fast funding.
  • Large loan amounts.
  • Joint loan option.
  • Mobile app to manage loan.
Cons
  • No option to choose initial payment date.
  • High minimum loan amount.
SoFi offers online personal loans with consumer-friendly features for good- and excellent-credit borrowers.
  • No required fees.
  • Loans up to $100,000.
  • SoFi members can access financial planning support.
Lightstream
4.5
Read full review
Est. APR6.99-25.29%
Est. APR6.99-25.29%
Loan amount$5K-$100K
Loan amount$5K-$100K
Min. credit score660
Min. credit score660
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on LightStream's website
on NerdWallet
Est. APR6.99-25.29%
Est. APR6.99-25.29%
Loan amount$5K-$100K
Loan amount$5K-$100K
Min. credit score660
Min. credit score660
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on LightStream's website
on NerdWallet
Pros
  • No fees.
  • Rate discount for autopay.
  • Long repayment terms and large loan amounts.
  • Fast funding.
  • Rate Beat program and Experience Guarantee.
Cons
  • No option to pre-qualify.
  • No direct payment to creditors with debt consolidation loans.
  • High minimum loan amount.
LightStream is a solid option for good-credit borrowers, with no fees and a promise to beat competitors’ rates.
  • Same-day funding available.
  • Flexible loan repayment terms.
  • Large loan amounts for home improvements.
Est. APR7.99-35.99%
Est. APR7.99-35.99%
Loan amount$2K-$50K
Loan amount$2K-$50K
Min. credit score600
Min. credit score600
Repayment terms3 to 5 years
Repayment terms3 to 5 years
on Best Egg's website
on NerdWallet
Est. APR7.99-35.99%
Est. APR7.99-35.99%
Loan amount$2K-$50K
Loan amount$2K-$50K
Min. credit score600
Min. credit score600
Repayment terms3 to 5 years
Repayment terms3 to 5 years
on Best Egg's website
on NerdWallet
Pros
  • Wide range of loan amounts.
  • Secured loan options.
  • Direct payment to creditors with debt consolidation loans.
  • Fast funding.
  • Free credit score monitoring.
Cons
  • Origination fee.
  • No rate discounts.
  • No mobile app to manage loan.
Best Egg is a good choice for borrowers who want to secure their personal loan.
  • Next-day funding available.
  • Loans can be secured with home fixtures or a vehicle.
Est. APR9.99-35.99%
Est. APR9.99-35.99%
Loan amount$1K-$50K
Loan amount$1K-$50K
Min. credit score580
Min. credit score580
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on Upgrade's website
on NerdWallet
Est. APR9.99-35.99%
Est. APR9.99-35.99%
Loan amount$1K-$50K
Loan amount$1K-$50K
Min. credit score580
Min. credit score580
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on Upgrade's website
on NerdWallet
Pros
  • Secured and joint loans.
  • Multiple rate discounts.
  • Mobile app to manage loan payments.
  • Direct payment to creditors with debt consolidation loans.
  • Long repayment terms on home improvement loans.
Cons
  • Origination fee.
  • No option to choose your payment date.
Upgrade personal loans offer multiple rate discounts. A low minimum credit score requirement makes the perks stand out even more.
  • Access to free credit monitoring.
  • Loans can be funded within one business day after approval.
  • Accepts joint and secured applications.
Est. APR9.06-35.99%
Est. APR9.06-35.99%
Loan amount$1K-$40K
Loan amount$1K-$40K
Min. credit score600
Min. credit score600
Repayment terms2 to 6 years
Repayment terms2 to 6 years
on NerdWallet
Est. APR9.06-35.99%
Est. APR9.06-35.99%
Loan amount$1K-$40K
Loan amount$1K-$40K
Min. credit score600
Min. credit score600
Repayment terms2 to 6 years
Repayment terms2 to 6 years
on NerdWallet
Pros
  • Joint loan option.
  • Direct payment to creditors with debt consolidation loans.
  • Option to pre-qualify with a soft credit check.
  • Option to change your payment date.
Cons
  • Origination fee.
LendingClub personal loans are a solid option for good-credit borrowers who want to apply jointly.
  • Flexible loan amounts.
  • Offers access to credit health tools, like score monitoring.
Est. APR8.99-18.00%
Est. APR8.99-18.00%
Loan amount$250-$50K
Loan amount$250-$50K
Min. credit scoreNone
Min. credit scoreNone
Repayment terms1 to 5 years
Repayment terms1 to 5 years
on NerdWallet
Est. APR8.99-18.00%
Est. APR8.99-18.00%
Loan amount$250-$50K
Loan amount$250-$50K
Min. credit scoreNone
Min. credit scoreNone
Repayment terms1 to 5 years
Repayment terms1 to 5 years
on NerdWallet
Pros
  • Wide range of loan amounts.
  • Fast funding.
  • No origination fee.
  • Co-sign, joint and secured loan options.
  • Direct payment to creditors with debt consolidation loans.
Cons
  • Exclusive to credit union members.
  • No option to pre-qualify with a soft credit check.
  • No option to change your payment date.
Navy Federal personal loans may be a good fit for most members, thanks to flexible amounts, consumer-friendly features and quick funding time.
  • No origination fees.
  • Wide range of loan amounts.
  • Joint and secured loan options available.
Est. APR8.99-35.99%
Est. APR8.99-35.99%
Loan amount$5K-$50K
Loan amount$5K-$50K
Min. credit score640
Min. credit score640
Repayment terms2 to 5 years
Repayment terms2 to 5 years
on Achieve's website
on NerdWallet
Est. APR8.99-35.99%
Est. APR8.99-35.99%
Loan amount$5K-$50K
Loan amount$5K-$50K
Min. credit score640
Min. credit score640
Repayment terms2 to 5 years
Repayment terms2 to 5 years
on Achieve's website
on NerdWallet
Pros
  • Multiple rate discounts.
  • Direct payment to creditors for debt consolidation.
  • Joint loan option.
  • Fast approval and funding.
  • Access to a dedicated loan consultant.
Cons
  • Origination fee.
  • High minimum loan amount.
  • No mobile app.
Achieve accepts borrowers with fair to good credit and offers a rate discount for applying with a co-borrower.
  • Joint loan options available.
  • Dedicated loan consultants can provide support during the application process.

» MORE: Compare the best home improvement loans

What is a solar loan?

A solar loan is an unsecured personal loan used to pay for solar panels and installation. Banks, credit unions and online lenders provide solar loans. Typical loan amounts are $1,000 to $100,000, and annual percentage rates are 6% to 36%.

How do solar loans work?

Solar loans are installment loans. You receive money in a lump sum and repay it in equal monthly installments over a predetermined period, typically two to seven years.

Unlike with home equity financing, there’s no collateral required with solar loans. This means your home or solar panels aren’t at risk if you miss payments, but you may have to pay late fees.

How to compare solar loans

Compare these features to find a low-cost solar loan that fits your budget:

Annual percentage rate

APR represents the total cost of a loan, including interest and any fees. It offers the best way to make an apples-to-apples cost comparison between loan offers and other financing options. The loan with the lowest APR is the least expensive.

Monthly payments

Affordable monthly payments are as important as getting a low rate. Be sure loan payments fit comfortably into your budget because missed or late payments can negatively affect your credit.

Fees

Some lenders may charge an origination fee of 1% to 10% of the loan amount. The lender can deduct the fee before sending you the funds, reducing the amount you receive.

Repayment term

The length of a loan’s repayment term affects the monthly payments. Some lenders offer extended repayment terms specifically for home improvement projects. Although loans with longer repayment terms have lower monthly payments, they result in higher total interest costs.

How to get a solar loan

  1. Get a firm cost estimate. Compare bids from multiple solar panel installation companies. This will tell you how much you need to borrow.

  2. Calculate solar loan payments. Use a solar loan calculator to determine what APR and repayment term will get you an affordable monthly payment.

  3. Check your rate. Many lenders offer pre-qualification, which lets applicants preview their potential loan rate, amount, monthly payment and repayment term. This requires only a soft credit pull, so you can review multiple offers before applying.

  4. Apply. Once you accept a loan offer, the lender may require documents to verify your employment, income, address and other information. Have your W-2s and tax documents ready to make the application process go smoothly.

  5. Get funded. If approved, expect to receive funds within a few days.

Solar panel tax benefits

The federal government provides a 30% tax credit to those who purchase and install a new solar panel system in their home by 2032.

For example, if you install solar panels in 2024, you could receive a $6,000 credit on a $20,000 system with the federal tax credit alone.

Tax credits reduce your tax liability. If you get a $6,000 credit, you can reduce your tax bill by $6,000. This credit is nonrefundable, meaning if you don’t owe taxes — or owe less money than the 30% credit amounts to — you won’t get that money back in a refund. You can, however, carry any unused credit amount to a future tax year.

You can take advantage of tax benefits if you own your system, no matter how you pay for it.

The federal solar panel tax credit decreases to 26% in 2033 and 22% in 2034.

Some states also offer tax benefits and other incentives for solar installation. You can look up your state’s offerings in the Database of State Incentives for Renewables and Efficiency.

Other ways to finance solar panels

Solar company financing

Some solar companies offer financing through third-party lenders. These loans can be similar to home improvement loans — unsecured with no down payment required. The payment plans could have lower rates and longer repayment terms than personal loans, making your monthly payment lower.

Compare a quote from a solar company with other options to find the least expensive one.

Home equity loan

If you know how much your solar panels will cost, you can apply for a fixed-rate home equity loan. These loans have lower rates and longer repayment terms than unsecured loans because putting up your home as collateral lowers the risk for a lender.

Home equity line of credit

A HELOC is another low-rate option that is secured by your home. It’s more flexible than a home equity loan because you can draw on funds as you need them, and you often have the option to pay only interest during the initial phase of the loan. Unlike personal and home equity loans, HELOCs have variable rates.

Cash-out refinance

A cash-out refinance is a second mortgage that’s larger than your current mortgage. You use the new loan to pay the old loan and “cash out” the difference to purchase solar panels. It’s a good option if current mortgage rates are lower than what you’re paying and if you can keep closing costs low.

Closing costs can be 2% to 5% of the mortgage’s cost. That means a $350,000 mortgage can have $17,500 in closing costs — more than half the cost of installing a new solar panel system.

Leasing or getting a power purchase agreement

If you don’t want to make a large upfront payment or are ineligible for federal and state tax credits, consider a power purchase agreement or leasing solar panels.

In both cases, you pay little or no upfront costs to essentially rent and use the solar panels. The owner of the panels collects payment from you, as rent or through usage, and receives federal tax credits or any available tax incentives from the government.

The U.S. Department of Energy has more details about the difference between a lease and a power purchase agreement.

Are solar panels a good investment?

Here’s how to determine whether solar panels are worth the investment:

Calculate your sun exposure, costs and savings. Solar panels will help people in some parts of the country save more money than others. For example, someone in Seattle might not get the same value from solar panels as someone in Phoenix because of the disparity in sunshine.

To estimate your savings, you first need to know how many kilowatt-hours you use and how much you’re paying for them. In 2022, the average household used 899 kilowatt-hours each month, according to data from the U.S. Energy Information Administration. In June 2024, residential customers paid an average of 17.8 cents per kilowatt-hour.

Then, figure out what size system you’ll need. You can use a solar savings calculator to see how many panels your home would need and how much energy they would generate.

Estimate your payback period. Your solar loan payback period is the time it takes for your electric bill savings to match the cost of installing the system. This will be years, not months.

Let’s say you pay $17,000 for new solar panels and they save you $1,500 per year on your utility bills. Your payback period would be a little over 11 years.

Other factors determining your payback period include maintenance costs and whether utility rates change in your area.

Last updated on July 24, 2024

Frequently asked questions

  • The best solar panel financing option has the lowest annual percentage rate. If you have equity in your home, that may mean getting a home equity loan or line of credit. If not, a personal loan can be used for solar panels. The lowest rates go to borrowers with high credit scores and incomes.

  • You get an unsecured solar loan in a lump sum and repay it, with interest, in fixed monthly installments. Repayment terms are typically from two to seven years, and payments usually start one month after the loan is funded. Use a solar loan calculator to calculate monthly payments.

  • Solar loans are typically unsecured personal loans used to finance the purchase and installation of solar panels. These loans can have amounts from $1,000 to $100,000. Personal solar loans are one way to fund solar panels; other options include home equity, federal incentives or leasing if you aren't ready to buy.

Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial technology companies and financial institutions. We collect over 50 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

To recap our selections...

NerdWallet's Solar Loans: Compare Solar Panel Financing Options

  • SoFi Personal Loan: Best for Solar loans
  • LightStream: Best for Solar loans
  • Best Egg: Best for Solar loans
  • Upgrade: Best for Solar loans
  • LendingClub: Best for Solar loans
  • Navy Federal Credit Union Personal Loan: Best for Solar loans
  • Achieve Personal Loans: Best for Solar loans
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