Solar panel installations have become increasingly affordable, but the upfront costs can still be substantial. With the average residential solar system costing around $30,000 before incentives, most homeowners turn to solar financing companies to make their clean energy dreams a reality. According to the Consumer Financial Protection Bureau, 58% of solar projects were paid through loans in 2023, showing the critical role financing plays in solar adoption.
The solar financing landscape has evolved dramatically since 2020, with new lenders entering the market, competitive interest rates, and innovative financing structures designed specifically for solar installations. Whether you’re looking for traditional solar loans, lease agreements, or specialized financing programs, understanding your options is crucial for making the best financial decision.
What Are Solar Financing Companies and Why They Matter
Solar financing companies are specialized lenders that provide funding solutions specifically designed for solar panel installations and related home energy improvements. These companies understand the unique aspects of solar investments, including:
- Integration with federal and state tax credits
- Long-term payback periods that align with solar panel lifespans
- Property value considerations and energy savings calculations
- Specialized underwriting that considers future energy savings
The solar financing market has experienced tremendous growth in recent years. This growth is driven by the extension of the federal Investment Tax Credit (ITC) at 30% through 2032, making solar installations more attractive than ever. However, current legislation in Congress proposes ending the 30% tax credit for residential solar, with the House passing a measure in May 2025 and the Senate considering similar changes.
Complete Guide to Solar Financing Types
Solar Loans
Solar loans are the most popular financing option, accounting for approximately 60% of all financed solar installations. These loans come in several varieties:
Secured vs Unsecured Solar Loans
Secured solar loans use your home or the solar system itself as collateral, typically offering lower interest rates (3.99% to 7.99% APR). However, they put your property at risk if you default.
Unsecured solar loans don’t require collateral but generally carry higher interest rates (6.99% to 12.99% APR). They’re faster to process and don’t put your home at risk.
Traditional Bank Loans vs Specialty Solar Lenders
Traditional banks like LightStream and Navy Federal Credit Union offer competitive rates but may lack solar-specific features. Specialty solar lenders like Sunlight Financial and GoodLeap provide:
- Re-amortization options when you receive tax credits
- Deferred payment periods
- Integration with installer networks
- Solar-specific underwriting criteria
Solar Leases & Power Purchase Agreements (PPAs)
Solar leases and PPAs allow you to go solar with little to no upfront costs. With a solar lease, you pay a fixed monthly amount to rent the solar panels. With a PPA, you pay for the actual electricity the panels produce at a predetermined rate.
Pros:
- No upfront costs
- Maintenance included
- Immediate energy savings
Cons:
- No ownership of the system
- No tax credit benefits
- Lower long-term savings compared to ownership
- Potential complications when selling your home
PACE Financing
Property Assessed Clean Energy (PACE) financing allows you to finance solar installations through your property taxes. The loan is repaid over 15-20 years as an assessment on your property tax bill.
PACE financing is available in 37 states plus Washington D.C., but availability varies significantly by municipality. California’s HERO Program is the largest PACE provider, while states like Florida and Missouri have robust PACE programs for residential solar.
Home Equity Options
Home equity financing can offer some of the lowest rates for solar installations:
HELOC for Solar Installations
Home Equity Lines of Credit typically offer variable rates starting around 7.5% to 10.5% APR. The interest may be tax-deductible if used for home improvements, and you only pay interest on what you use.
Cash-Out Refinancing
If current mortgage rates are favorable compared to your existing rate, cash-out refinancing can provide funds for solar at mortgage rates (currently 6.5% to 7.5% for 30-year fixed mortgages).
Top 15 Solar Financing Companies (2025)
Tier 1 National Leaders
1. Sunlight Financial
Overview: Sunlight Financial has financed over 300,000 solar systems and specializes in both solar installations and battery storage systems. The company went public in 2021 and has established itself as a major player in the clean energy financing space.
Key Features:
- Loan terms: Typically over 20 years
- Interest rates: Around 3.3% average APR
- Minimum credit score: 650
- Zero and low-interest rate options available
- Available nationwide
Pros:
- Competitive interest rates
- Covers solar + battery systems
- Strong BBB rating (B+)
- High customer satisfaction (4.6/5 stars)
Cons:
- Higher credit score requirement
- Limited flexibility in loan terms
2. GoodLeap (formerly LoanPal)
Overview: GoodLeap has become one of the fastest-growing solar financing companies, offering fixed-rate loans for solar installations and energy-efficient home improvements.
Key Features:
- Loan terms: 7 to 25 years
- Interest rates: As low as 2.98% APR
- Loan amounts: Up to $100,000 (varies by credit score)
- Minimum credit score: 600
- Available nationwide
Pros:
- Flexible credit requirements
- Covers additional energy-efficient upgrades
- Multiple loan term options
- No prepayment penalties
Cons:
- Loan amounts vary significantly by credit score
- Customer reviews are mixed (3.96/5 stars)
3. Dividend Finance
Overview: Now operating under Fifth Third Bank, Dividend Finance offers the EmpowerLoan, a secured solar financing option with competitive rates.
Key Features:
- Loan amounts: Up to $120,000
- Terms: 12 or 20 years
- Interest rates: 3.49% to 6.99% APR
- Minimum credit score: 660
- Available in 45 states
Pros:
- High loan amounts available
- No down payment required
- Secured by solar system (lower rates)
- Extensive installer network
Cons:
- Very low customer satisfaction (1.3/5 stars)
- Secured loan puts system at risk
- Not available in all states
4. Mosaic (Note: Filed for Bankruptcy June 2025)
Overview: Mosaic filed for Chapter 11 bankruptcy in June 2025, citing economic headwinds and tax credit uncertainty. Prior to its bankruptcy, Mosaic was one of the largest solar financing companies in the United States, having funded over $10 billion in solar loans since its founding.
Important Note: With Mosaic pausing new loan applications and processing, homeowners and installers may face installation delays. Other financing companies continue to support residential solar.
Specialized Solar Lenders
5. Energy Loan Network (ELN)
Overview: ELN operates as a network connecting credit unions with solar customers, offering competitive rates through established financial institutions.
Key Features:
- Terms: 8 to 20 years
- Average interest rate: 5.24% APR
- Available nationwide
- 24/7 online applications
Pros:
- Excellent customer reviews (4.98/5 stars)
- A+ BBB rating
- Credit union backing
- Transparent process
Cons:
- Limited loan term flexibility
- Rates vary by credit union partner
6. Atmos Financial
Overview: Atmos Financial is a climate-focused lender offering both residential and commercial solar loans with a mission-driven approach to clean energy financing.
Key Features:
- Residential loans up to $100,000
- Commercial loans up to $500,000
- 6-month payment deferral option
- Low dealer fees
Pros:
- Climate-focused mission
- Competitive rates and low fees
- Flexible payment options
- Both residential and commercial options
Cons:
- Newer company with limited track record
- Limited availability in some states
7. Clean Energy Credit Union
Overview: The first credit union dedicated exclusively to clean energy, offering solar loans with member-focused benefits.
Key Features:
- Terms: 12 to 20 years
- Competitive member rates
- Focus on clean energy projects
- Member ownership structure
Pros:
- Member-owned structure
- Clean energy specialization
- Competitive rates for members
- Educational resources
Cons:
- Must become a member
- Limited geographic availability
Traditional Banks & Credit Unions
8. LightStream (Truist Bank)
Overview: LightStream offers unsecured personal loans for solar installations with competitive rates for borrowers with excellent credit.
Key Features:
- Loan amounts: $5,000 to $100,000
- Terms: 2 to 12 years
- Interest rates: 6.49% to 25.29% APR
- Minimum credit score: 660
Pros:
- No fees or prepayment penalties
- Rate beat guarantee
- Fast funding
- A+ BBB rating
Cons:
- Higher rates than specialized solar lenders
- No solar-specific features
- Poor customer reviews (1.33/5 stars)
9. Navy Federal Credit Union
Overview: Available to military members and their families, Navy Federal offers competitive personal loans that can be used for solar installations.
Key Features:
- Loan amounts: $250 to $50,000
- Terms: 1 to 5 years
- Interest rates: 8.99% to 18.00% APR
- No minimum credit score
Pros:
- No origination fees
- Military-focused benefits
- Flexible qualification criteria
- Quick funding
Cons:
- Limited to military families
- Shorter loan terms
- No solar-specific features
10. Local Credit Unions with Solar Programs
Many local credit unions offer specialized solar loan programs with competitive rates for members:
- Redwood Credit Union (California): 5-20 year terms, competitive member rates
- Elevations Credit Union (Colorado): 3-15 year terms, covers solar + storage
- Provident Credit Union (California): Up to 20-year terms, member benefits
Regional & State Programs
11. State-Specific Financing Programs
Connecticut Green Bank: Offers 12-year solar loans with competitive rates for Connecticut residents.
Michigan Saves: Provides 1-10 year financing for energy improvements including solar.
NYSERDA (New York): Offers 1-15 year financing options for solar installations.
12. Utility Company Financing Options
Several utilities offer on-bill financing for solar installations:
- PSE&G Solar Loan Program (New Jersey): 10-year terms with utility bill integration
- Santee Cooper (South Carolina): 10-year financing for residential solar
- Fort Collins Utilities (Colorado): 5-20 year terms for energy improvements
13. Municipal Solar Loan Programs
City of Milwaukee: 15-year solar financing for residents
City of Plano, Texas: Municipal solar loan program with competitive rates
Hamilton County, Ohio: 5-year solar financing program
14. PACE Financing Providers
HERO Program: California’s largest PACE provider, offering 5-20 year terms
Renew Financial: PACE financing available in California with 5-30 year terms
How to Choose the Right Solar Financing Company
Selecting the best solar financing company requires careful evaluation of several key factors:
Key Factors to Evaluate
Interest Rates and APR
Always compare the Annual Percentage Rate (APR), which includes both interest and fees. Current solar loan APRs range from 3.99% to 12.99% depending on credit score and lender.
Loan Terms and Flexibility
Longer terms mean lower monthly payments but higher total interest costs. Consider:
- Payment deferral options
- Re-amortization when you receive tax credits
- Prepayment penalty policies
- Rate lock periods
Fees and Hidden Costs
Watch out for:
- Origination fees (0% to 9.99%)
- Dealer fees (can add 10-30% to loan amount)
- Late payment fees
- Processing fees
Reputation and Customer Service
Research:
- Better Business Bureau ratings
- Customer review scores
- Industry awards and recognition
- Response time for customer service
Questions to Ask Potential Lenders
- What is the total APR including all fees?
- Are there dealer fees, and how much?
- Can I re-amortize when I receive tax credits?
- What happens if I want to sell my home?
- Are there prepayment penalties?
- How long is the rate lock period?
- What credit score do I need to qualify?
- How quickly can the loan be funded?
Red Flags to Avoid
- “Free” solar panel claims: Nothing is free – you’ll pay through higher loan costs
- High-pressure sales tactics: Legitimate lenders give you time to decide
- Extremely low credit requirements: May indicate predatory lending
- Unclear fee structures: All costs should be transparent upfront
- Door-to-door sales: Reputable companies don’t use high-pressure door sales
Credit Score Requirements by Lender
- 600-649: GoodLeap, Best Egg, LendingClub
- 650+: Sunlight Financial
- 660+: LightStream, Dividend Finance
- No minimum: Navy Federal Credit Union (members only)
Solar Financing Application Process
Step-by-Step Application Walkthrough
Step 1: Get Solar Quotes
Before applying for financing, obtain quotes from 3-4 solar installers to understand your system cost and energy production estimates.
Step 2: Check Your Credit Score
Review your credit report and score to understand which lenders you’re likely to qualify with. Most solar lenders require scores of 640 or higher.
Step 3: Pre-Qualification
Many lenders offer soft credit checks that won’t impact your credit score. This helps you compare offers before committing.
Step 4: Compare Offers
Evaluate offers based on:
- Total APR including all fees
- Monthly payment amounts
- Loan terms and flexibility
- Lender reputation and service
Step 5: Submit Full Application
Once you’ve chosen a lender, submit your complete application with required documentation.
Step 6: Final Approval and Funding
After approval, review loan documents carefully before signing. Funding typically occurs within 2-5 business days.
Required Documentation Checklist
- Government-issued photo ID
- Social Security number
- Proof of income (pay stubs, tax returns, W-2s)
- Bank statements (last 2-3 months)
- Proof of homeownership (deed or mortgage statement)
- Solar installation contract and system specifications
- Property tax bills (for some lenders)
- Homeowners insurance information
Timeline Expectations
- Pre-qualification: Instant to 24 hours
- Full application review: 2-7 business days
- Final approval: 1-3 business days
- Funding: 1-5 business days
- Total process: 1-2 weeks on average
Common Approval/Rejection Reasons
Common Approval Factors:
- Credit score above 640
- Stable employment history
- Debt-to-income ratio below 45%
- Sufficient home equity
- Complete documentation
Common Rejection Reasons:
- Credit score too low
- High debt-to-income ratio
- Recent bankruptcy or foreclosure
- Insufficient income documentation
- Property issues (liens, title problems)
Solar Tax Credits & Incentives Impact
Federal Investment Tax Credit (ITC)
The federal solar tax credit remains at 30% through 2032, then decreases to 26% in 2033 and 22% in 2034. However, current legislation in Congress proposes ending the residential solar tax credit, with the House passing a measure in May 2025 and the Senate considering similar changes. This credit can significantly impact your financing strategy:
- For a $30,000 system, you’ll receive a $9,000 tax credit
- Many lenders offer re-amortization when you receive the credit
- You must have sufficient tax liability to claim the full credit
- Unused credits can be carried forward to future tax years
State and Local Incentive Programs
Top State Incentives for 2025:
- California: SGIP battery rebates up to $1,000/kWh
- New York: NY-Sun incentives up to $1,000 per installation
- Massachusetts: SMART program with long-term contracts
- New Jersey: Transition Renewable Energy Credits
- Illinois: Illinois Shines program with upfront rebates
How Tax Credits Work with Different Financing Options
Solar Loans
With solar loans, you own the system and receive all tax credits. Many lenders offer:
- 18-month payment deferrals to receive tax credits
- Re-amortization options to lower monthly payments
- Balloon payment structures
Solar Leases and PPAs
With leases and PPAs, the system owner (not you) receives tax credits. This is factored into your lease/PPA pricing but reduces your overall savings.
PACE Financing
With PACE financing, you own the system and receive tax credits, which can be used to pay down the PACE assessment.
Cost Analysis & ROI Calculations
Total Cost of Ownership: Cash vs Financing
Let’s compare a typical $30,000 solar system (before incentives):
Cash Purchase:
- Upfront cost: $30,000
- Federal tax credit: -$9,000
- Net cost: $20,552 (based on 2025 EnergySage data)
- 25-year savings: $45,000
- Net benefit: $24,448
Solar Loan (6% APR, 20 years):
- Loan amount: $30,000
- Total interest: $12,947
- Total payments: $42,947
- Federal tax credit: -$9,000
- Net cost: $33,947
- 25-year savings: $45,000
- Net benefit: $11,053
Interest Rate Impact on Long-Term Savings
For a $30,000, 20-year solar loan:
- 4% APR: Total interest = $9,151
- 6% APR: Total interest = $12,947
- 8% APR: Total interest = $17,120
- 10% APR: Total interest = $21,686
A 2% difference in APR costs approximately $3,800 over the loan term.
Payback Period Calculations
Your solar payback period depends on:
- Total system cost (after incentives)
- Monthly energy savings
- Financing costs
- Electricity rate escalation
Typical payback periods:
- Cash purchase: 8-12 years
- Low-rate solar loan (4-6%): 10-14 years
- High-rate loan (8-12%): 12-18 years
- Solar lease/PPA: 15-20+ years
Expert Tips & Best Practices
Timing Your Solar Financing Application
- Best time to apply: After receiving final solar quotes but before installation
- Avoid multiple applications: Apply to 2-3 lenders within a 14-day window to minimize credit impact
- Consider seasonal factors: Lenders may offer promotions during slower periods
- Lock in rates: Interest rates can change daily; lock in favorable rates quickly
Negotiating Better Terms
- Shop multiple lenders and use competing offers for leverage
- Ask about rate discounts for autopay or existing relationships
- Negotiate dealer fees with your installer
- Consider larger down payments to reduce loan amounts and interest
- Ask about promotional rates or limited-time offers
Working with Solar Installers vs Direct Lending
Installer-Arranged Financing Pros:
- Convenient one-stop shopping
- Pre-negotiated terms
- Streamlined approval process
- Integrated project management
Installer-Arranged Financing Cons:
- Dealer fees increase costs
- Limited lender options
- Potential conflicts of interest
- Less transparency in terms
Direct Lending Pros:
- No dealer fees
- More lender options
- Better rate transparency
- Direct relationship with lender
Direct Lending Cons:
- More complex process
- Separate contractor coordination
- Potential funding delays
Refinancing Options
Consider refinancing your solar loan if:
- Interest rates have dropped significantly
- Your credit score has improved
- You want to change loan terms
- You’re facing financial hardship
Many lenders offer refinancing options, and some specialized solar refinancing companies have emerged to serve this market.
Frequently Asked Questions
What credit score do I need for solar financing?
Most solar financing companies require a minimum credit score of 640, though some lenders like GoodLeap accept scores as low as 600. Navy Federal Credit Union has no minimum requirement for members. Higher credit scores (720+) qualify for the best rates.
How much can I borrow for solar panels?
Solar loan amounts typically range from $5,000 to $100,000, with some commercial lenders offering up to $500,000. The exact amount depends on your credit score, income, and the lender’s policies.
What’s the difference between secured and unsecured solar loans?
Secured solar loans use your home or solar system as collateral, offering lower interest rates but putting your property at risk. Unsecured loans don’t require collateral but typically have higher rates.
Can I get solar financing with bad credit?
Yes, some options exist for borrowers with poor credit, including PACE financing, co-signer loans, or working with specialized bad-credit lenders. However, rates will be higher and terms less favorable.
Should I choose a solar loan or lease?
Solar loans typically provide better long-term value because you own the system and receive tax credits. Leases require no upfront costs but offer lower overall savings and can complicate home sales.
How do dealer fees affect my solar loan?
Dealer fees, typically 10-30% of the loan amount, are added to your principal balance, increasing your total cost. Ask your installer about dealer fees and consider direct lending to avoid them.
What happens to my solar loan if I sell my house?
Most solar loans must be paid off when you sell your home, either from sale proceeds or by the new owner assuming the loan (if permitted). The solar system typically increases home value to help offset the loan balance.
Can I pay off my solar loan early?
Most solar lenders allow early payoff without penalties. Some even offer ongoing re-amortization when you make large payments, such as when receiving tax credits.
Conclusion
Choosing the right solar financing company is crucial for maximizing your solar investment’s financial benefits. While cash purchases offer the best long-term returns, solar loans make clean energy accessible to millions of homeowners who can’t pay upfront.
The top solar financing companies in 2025—including Sunlight Financial and GoodLeap—offer competitive rates, flexible terms, and solar-specific features that traditional lenders can’t match. However, the best choice depends on your credit score, financial situation, and long-term goals.
Key takeaways for choosing solar financing:
- Compare APRs including all fees, not just interest rates
- Consider both specialized solar lenders and traditional banks
- Factor in tax credits and incentives when evaluating options
- Avoid high dealer fees by considering direct lending
- Choose loan terms that balance monthly affordability with total cost
With the federal tax credit at 30% through 2032 and solar technology costs continuing to decline, 2025 remains an excellent time to go solar, though potential changes to federal tax credits make timing important. By choosing the right financing partner, you can start saving on electricity costs immediately while building long-term wealth through clean energy ownership.
Remember to get quotes from multiple installers and lenders, read all terms carefully, and don’t rush into any financing decision. The right solar financing company will help you achieve energy independence while protecting your financial interests for decades to come. For those ready to take the next step, consider preparing your home for solar power installation to ensure a smooth transition to clean energy.