Solar panels are a big investment. Solar financing options help with the burden of large upfront costs.
Solar is now cheaper than it’s ever been, but it’s still a significant upfront cost for the average homeowner.
Luckily, there are many solar financing companies that offer loans, leases, and power purchase agreements so homeowners in the United States can easily make the switch to solar and start saving on their electricity bills.
We put together this guide to help you find the best financing company for your specific needs.
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There are three main solar panel financing options if you don’t have the cash on hand for an upfront purchase: a solar loan, a solar lease, or a solar power purchase agreement (PPA).
A solar loan works like other personal home improvement loans - you take out a loan from a lender for the purchase of the system and make monthly loan payments to pay back the loan.
With solar leases and PPAs, you don’t have to pay any upfront costs. Instead, a solar developer owns the system on your roof and you submit a monthly payment to them for using the energy the solar panels create. The monthly payment is usually lower than what your electric bill would be without solar.
Read more about the differences between solar leases and solar PPAs here.
| Solar lease | Solar PPA | Solar loan | |
|---|---|---|---|
| Benefits | Zero upfront costs | Zero upfront costs | Purchase system with zero upfront costs |
| System owner? | No | No | Yes |
| Receives tax credits/SRECs | No | No | Yes |
| Uses net metering | Yes | Yes | Yes |
| Responsible for maintenance? | Solar company | Solar company | Homeowner |
| Monthly payment | Fixed with annual price escalator | Varies depending on solar energy production | Fixed |
6 popular solar financing companies
1. Mosaic
Offers: Solar loans
Available in: All 50 states and Washington D.C.
How it works: Mosaic is one of the largest direct solar loan lenders in the U.S., helping more than 100,000 homes make the switch to solar. Mosaic has a network of solar contractors and installers they work with, so your installer will put you in contact with them if you are interested in a loan.
Solar loan: Mosaic lends loans ranging from $10,000 to $100,000. Their loan terms are typically between 10 and 20 years. Mosaic interest rates vary, but in some cases you can qualify for an interest rate as low as 2.49%. The company has been known to approve loans to those with credit scores as low as 640.
2. LightStream Financial
Offers: Solar loans
Available in: All 50 states and Washington D.C.
How it works: LightStream Financial is a division of SunTrust bank. Unlike companies like Sungevity and SunPower, LightStream Financial will not put you in contact with installers or offer you any sort of warranty on your system. They just provide you with a residential solar loan.
Solar loan: To qualify for Lightstream Financial’s home improvement solar loan, you must have a minimum credit score of 660. Loan terms range between 2 and 12 years, depending on the loan amount and what works best for you. Interest rates range from 4.99% to 16.99%. There are no fees, prepayment penalties, or home equity loan requirements.
3. Sunlight Financial
Offers: Solar loans
Available in: All 50 states and Washington D.C.
How it works: Like LightStream and Mosaic, Sunlight Financial is a direct lender of solar loans. Sunlight Financial has their own network of solar installers and have funded over $4 billion loans to date. But, Sunlight doesn’t stop at solar - their loans can also help finance solar battery systems and roof replacements.
Solar loan: Sunlight Financial now offers zero and low-interest rate loans for homeowners looking to go solar. You can choose from a 12-year loan with interest rates as low as 0.00%, a 20-year loan with rates as low as 0.49%, or a 15-year loan with rates as low as 1.49%. Sunlight Financial requires a credit score between 650 and 699, with a debt to income ratio of 55% or lower for loans between $10,000 and $70,000.
4. GoodLeap
Offers: Solar loans
Available in: All 50 states and Washington D.C.
How it works: GoodLeap, formally Loanpal, is a direct lending company that provides fixed interest rate loans that cover solar installations and solar battery installations, and can cover a portion of other energy efficient home upgrades (like smart thermostats and energy efficient windows).
Solar loan: GoodLeap offers solar loans with terms between seven and 25 years. APR rates can be as low as 1.99% and the loan you can qualify for depends on your credit score. FICO scores between 600 and 649 can qualify for up to $45,000 and scores between 650 and 699 can qualify for $50,000. Any credit score above 700 can receive loans up to $100,000.
5. SunRun
Offers: Solar leases, solar PPAs, solar loans
Available in: AZ,CA, CO, CT, FL, HI, IL, MD, MA, NV, NH, NJ, NM, NY, PA, RI, SC, TX, VT, WI, Washington D.C., and Puerto Rico
How it works: SunRun is the largest residential solar company in the U.S., installing a new solar system every 2.3 minutes on average. When you take out a loan with SunRun, they take care of all paperwork, permits, design, and installation of your solar installation.
Solar lease/PPA: SunRun offers solar leases and PPAs with $0 down payment and 20-year terms. Their solar leasing payments are a flat payment, whereas the solar PPA payments are based on how much energy the solar panels produce. SunRun will install and maintain the panels - all you have to do is pay your monthly lease or PPA payment.
Solar loan: SunRun’s solar loan, called Bright Advantage, allows borrowers to purchase a home solar system even if they don’t have the money for an upfront payment. Bright Advantage is an unsecured loan, so you don’t have to use your house as collateral. If you qualify, SunRun will partner you with a lender that offers competitive interest rates. You will be responsible for maintaining the system. SunRun does not list their bank partners on their website.
6. SunPower
Offers: Solar leases, solar loans
Available in: AZ, CA, CT, FL, HI, IL, LA, MA, MD, NJ, NV, NY, OR, TX
How it works: SunPower is one of the most popular solar energy companies in the U.S. SunPower serves as a one-stop-shop for solar solutions: they will assist you in finding an installer, designing a system, and finding financing options.
Solar lease: SunPower solar lease contracts have terms of 20 years, during which SunPower is responsible for all maintenance and repairs. Monthly payments will either be fixed or include a yearly price escalator, which is determined on a case-by-case basis. Solar system performance is guaranteed for 20 years. SunPower owns the system and therefore receives any solar rebates, however, the homeowner can still take advantage of net metering.
Solar loan: Most recently, SunPower, in conjunction with their loan partner Technology Credit Union (TCU), announced they will offer a 15-year 0.99% annual percentage rate or 25-year 1.99% rate loan for their home solar systems. In order to qualify for SunPower’s loan, you must have a credit score of at least 640.
Because it is a loan, the homeowner will be the owner of the system, and therefore can take advantage of incentives like the solar investment tax credit (ITC).
How to choose the best solar financing company
In order to find the right financing company for your solar energy system, you first need to find the right solar installer.
Get quotes from multiple local solar companies and check out their reviews on SolarReviews to see what solar installer is best for you. Many solar installers work directly with solar financing companies, so they will help you connect with loan, lease, and PPA providers.
Once you find the right financing option for you, you’ll be on your way to powering your home with renewable energy, all while seeing energy savings on your utility bill!
Key takeaways
- You can finance a solar panel system with a solar loan, solar lease, or solar PPA.
- LightStream Financial, Mosaic, Sunlight Financial, and GoodLeap are direct lenders that offer solar loans to help homeowners install solar systems on their roofs.
- SunRun and SunPower offer an array of solar financing options, including solar loans, leases, and PPAs.
Catherine Lane
Written Content Manager
Catherine is the Written Content Manager at SolarReviews. She has been researching and writing about the residential solar industry for four years. Her work has appeared in Solar Today Magazine and Solar Builder Magazine, and has been cited by publications like Forbes and Bloomberg.