|Society||Why we chose it||Max duration / Max amount loan|
|Dividend||Best overall||25 years / $ 50,000|
|SoFi||Ideal for large loans||Seven years / $ 100,000|
|New American funding||Ideal for fixed rates||30 years / $ 510,400 (up to $ 765,600 in higher cost areas)|
|1st community credit union||Ideal for long repayment terms||21 years / $ 100,000|
|LightStream||Ideal for quick financing||12 years / $ 100,000|
|To improve||Best for poor credit||Five years / $ 50,000|
Frequently Asked Questions (FAQ)
Can you finance solar panels?
You can finance the purchase and installation of solar panels either with a specific solar loan, or with a personal loan or installment renovation. You can even finance your solar project with a home equity loan, line of credit, or refinanced mortgage. There are pros and cons to each financing method that influence the length of your tenure, your monthly payment amount, and your APR.
How much does it cost to finance a solar panel?
Many solar panel and installment loan lenders don’t charge a set-up fee or require a down payment for your project. In these types of cases, you can buy your panels and have them installed without having to shell out any money. The monthly payments you accept will be determined by your credit profile, DTI, term length, and your APR.
Most solar panel loans range from three to 12 years. There are a few outliers that fund over 20 or 21 years, and if you use the Fannie Mae HomeStyle Energy Efficient Mortgage, you can combine an APR potentially less than 3% and a 30-year mortgage that wraps your solar project in its note. for low pay.
When are solar panel loans worth it?
To calculate whether investing in solar panels is worth it, add up the gross cost of the system. This would be the quote you will receive from a contractor for the purchase and installation of the panels. Then subtract any rebates or tax credits available to you where you live. The difference is your actual cost.
Next, calculate your annual electricity consumption savings and remember to add to that number any income you will receive from the resale of your energy to the utility provider. This amount, which combines your savings and incentive income, is called your annual benefit.
Finally, divide your actual cost by your annual profit. The answer is how many years it will take you to pay off your solar loan. If you plan to live in your home for several years after your repayment period ends, then a solar panel loan would be a good idea for you.
- Cost of panels and installation = $ 30,000
- Incentives, tax credits = $ 10,000
- Actual cost = $ 20,000 ($ 30,000 – $ 10,000)
- Annual savings per year = i.e. $ 100 per month x 12 months = $ 1,200
- Income potential = i.e. $ 110 per month x 12 months = $ 1,320
- Annual benefit = $ 2,520 ($ 1,200 + $ 1,320)
- Payback period = $ 20,000 / $ 2,520 = 7.9 years
Do you plan to live in the house for eight years? You are essentially in balance. Do you plan to stay home for 20 years? The project is then worth it. The lifespan of a solar power system is on average 25 to 30 years.
Is it better to finance or lease solar panels?
Financing versus leasing your solar panels depends on your financial goals and whether or not there are incentives available in your area.
Financing may be your best option if you want to reap the financial benefits of installing solar panels rather than just the environmental benefits. Available federal and state incentive programs can lower your tax burden, lower the gross system cost, and increase the market value of your home.
You may prefer to lease 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 credits.
How we choose the best solar panel loans
We researched 12 lenders before selecting the top six. To find out which business would win each category, we found out the strengths and weaknesses of each business’s loan programs, terms, rates, and fees.
Lenders may have offered wide ranges of APRs, but to be on our list they had to adjust to excellent credit scores with competitive rates, while also accommodating applicants with less credit profiles. than stellar. In general, most of our winners looked at the candidate as a whole, rather than simply reacting to a credit score as a disqualifier. We have also favored lenders with longer term loan options, so borrowers have the flexibility to keep their monthly payments as low as possible. Finally, we looked for a straightforward application process, whether through an online form or an easy-to-find phone number.