Best Solar Loans

The cost of solar panels and installation can be high, averaging nearly $30,000 in 2025. If you need a loan to cover the expense, using your home’s equity is a good place to start. But if you haven’t built up sufficient equity or would rather not tap into it, a personal loan can be a good replacement.

Consider options based on your credit profile and other factors, and compare lenders to find the best solar loan for your situation.

Compare rates on solar loans

Best solar loans of 2025

Navy Federal Credit Union

Navy Federal isn't a Credible partner, but it deserves mention for its home improvement loans. These are potentially a great value and can be used to pay for solar installations. Loan amounts are available up to $150,000 if you apply with a co-applicant, and rates top out at 18%. Plus, repayment terms can extend to 15 years, and the lender does not charge origination fees.

However, you'll need to be a member or eligible for membership to get a loan, which generally means being in the military or related to someone who is.

Compare: Co-applicant vs. Cosigner: What's the Difference?

What are solar loans and how do they work?

A solar loan is a method of financing the purchase and/or installation of solar panels. You can get a solar loan from a number of sources, including banks, credit unions, and online lenders, as well as specialized lending companies. Like any type of loan, solar loans involve borrowing money — which means paying interest and possibly fees and other charges.

The main benefit of a solar loan is that it allows you to pay for equipment and installation over time instead of covering the entire cost upfront. Since these projects routinely cost several thousand dollars, a solar loan provides the borrower with some financial flexibility.

Types of solar loans

You have several solar loan options, including:

Personal loans

You can use a personal loan to pay for a solar panel project, typically in the form of a home improvement loan. Personal loans are most often unsecured installments loans. This means they don't require collateral and provide the funds upfront in a single lump sum that you repay, along with interest and fees, over a term of several years. They also typically have fixed interest rates, which means the rate won’t change over the life of the loan.

Related: How Do Personal Loans Work?

Home equity loans

A home equity loan involves borrowing against the equity you've built up in your home. You can typically borrow up to 80% of your home's value minus your current mortgage balance. Although they may have lower rates and longer repayment terms than most personal loans, home equity loans require using your home as collateral. Defaulting on a home equity loan could mean losing your home to foreclosure.

Home equity line of credit (HELOC)

Like a home equity loan, a HELOC uses your home as collateral. But rather than receiving a lump-sum payment, you get access to a line of credit you can draw from as needed. This option may be less practical for a large one-time purchase, so consider the upfront costs of solar panels and installation as well as your potential credit line limit. Since HELOCs require using your home as collateral, like home equity loans, the risk of foreclosure is another factor to consider.

Solar financing companies and dealer financing 

Beyond traditional personal loans and home equity lenders, some lenders specialize in solar loans. Examples include Mosaic, Sunlight Financial, and Dividend. Often, you apply for this type of financing through your contractor or solar panel dealer. This option may come with additional caveats, such as a rate hike or drop after an introductory period based on how much of your loan you’ve paid off. These loans may also come with longer repayment terms compared to personal loans and introductory no-payment periods.

Despite potential advantages, Ben Zientara, Solar Policy Analyst at SolarReviews, urges caution: “Be aware of how solar loan dealer fees can increase the principal balance of your loan, even as they lower the APR of the payments,” says Zientara. “Compare the differences between fee-free loans like those through a credit union or state green bank” to loans from solar financing companies.

Pros and cons of solar loans

Solar loans can provide much-needed financing, but there are disadvantages to consider, too. Compare the following pros and cons before applying for a solar loan.

Pros:

• Upfront cash: According to EnergySage, a marketplace for clean energy, the average solar panel purchase and installation costs nearly $30,000. Solar loans make this hefty price tag manageable for those who can’t afford the cost out of pocket.
• Fixed monthly payments: A solar loan provides the predictability of a fixed monthly payment over a predetermined term. This allows you to plan for the cost of a solar system ahead of time and adjust the rest of your budget accordingly.
• No collateral required: Many solar loans don’t require collateral. This means you won’t risk losing your house, solar panels, or other assets if you default on the loan.
• Flexible repayment terms: Depending on your application and the lender you choose, you can decide between a range of term lengths, often between two and seven years. This lets you adjust your monthly payments and repayment period to work with your budget and timeline.

Cons: 

• Higher interest compared to secured loans: Solar loans are often unsecured. Due to the added risk for the lender, unsecured loans often have higher interest rates compared to secured loans like home equity loans.
• May be hard to qualify without good credit: Unsecured solar loans are more difficult to qualify for compared to secured loans, which require some type of collateral. This means lenders tend to have stricter eligibility criteria, making it more difficult to get a loan with bad credit.
• Missed payments can hurt credit: Like many forms of borrowing, falling behind on your monthly payments can damage your credit. Payment history makes up 35% of your credit score, so the impact of missed payments can be significant. 
• You’re committing to loan payments — no matter what: “You’ll be responsible for making payments even if the solar installation stops working,” says Zientara. “Make sure you choose an excellent company and have a strong backup plan for what to do if you’re stuck paying for both solar loan payments and a larger electricity bill for a few months.”

Learn More: Should I Get a Personal Loan?

How to compare solar loans

Like any loan, solar loans can have different features. Before settling on a specific solar loan and lender, compare them carefully based on the following factors:

• Annual percentage rate (APR): A solar loan's APR expresses the annual cost of borrowing (including upfront fees) as a percentage of the loan amount. The lower the rate, generally, the more affordable the loan.
• Fees: Solar loans may have fees. The most common are origination fees and late payment fees. Don't neglect these potential costs, and keep an eye out for lenders that charge low or no fees.
• Repayment terms: Your loan's term influences both your monthly payment and the total cost of borrowing. Personal loan terms typically range from 2 to 7 years, but can extend to 20 for home improvement loans, depending on the lender. Shorter terms mean higher monthly payments but a lower total cost of borrowing. Longer terms carry smaller monthly payments but a higher total cost.

• Loan amounts: Loan maximums vary by lender. Some lenders loan up to $50,000, while others offer as much as $150,000 or more. After calculating how much solar panels and installation will cost, check lender maximums to ensure they can meet your borrowing needs.
• Customer satisfaction: Your experience as a customer is equally as important as a loan’s fees, terms, and other stats. Research previous customers’ experiences by consulting sites like Trustpilot and the Better Business Bureau. And consider whether lenders offer customer service options that meet your needs and preferences — like phone support or a mobile app.

Prequalify with several lenders to compare loan quotes between them. You can see APRs, loan amounts, and repayment terms each lender may approve you for. You can also see how or if any upfront fees are likely to impact the amount you’ll receive. Prequalification involves a soft credit check and takes a few minutes to complete. Note that when you formally apply for a loan, most lenders will add a hard credit inquiry to your credit report, which could ding your score for up to a year.

How to apply for a solar loan

Apply for a solar loan using the following steps: 

1. Check your credit: Knowing your credit score can help narrow down lenders since many have minimum credit score requirements. You can check your credit score using Credible’s free credit monitoring tool. Review your credit report, which is separate from your credit score, by visiting AnnualCreditReport.com. This is a good opportunity to find (and dispute) any mistakes that may be hurting your score. 
2. Figure out how much you need to borrow: Before you apply for a loan, you need to know the cost of solar panels and installation. Requesting quotes from several solar companies can help you get a good estimate.
3. Compare lenders: Visit several lender websites or an online loan marketplace to compare interest rates, loan amounts, repayment terms, fees, and eligibility requirements, such as minimum credit scores.
4. Prequalify: After narrowing down potential lenders, prequalify with those that offer it. This can help you estimate your loan cost and monthly payments without a hard credit pull, but it’s not a guarantee or offer. Your rate may change when you formally apply.
5. Complete the application: When you’re ready to apply, submit a formal application and any supporting documentation the lender requires. This often includes a form of ID, proof of income, proof of employment, and potentially more.  

What about solar panel tax credits?

Unless you can install solar panels before Dec. 31, 2025, you're probably out of luck. The Residential Clean Energy Credit will no longer be available after that date. 

This federal tax incentive offered homeowners the opportunity to claim a tax credit of up to 30% of the costs associated with improvements such as solar panels. The clean energy credit is essentially a moot point now, since you can claim the credit only for the year the equipment was installed, not just purchased, and installation can take months to complete.

However, you still may be able qualify for incentives and rebates at the state level. You can see what’s available in your state using the database of state incentives for renewables and efficiency.

Methodology

Credible evaluated 32 lenders across 1,216 data points to find the best solar loans. We chose the best lenders based on the following weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible’s team of experts gathered information from each lender’s website and from our partners directly. We also considered each of our partner lenders’ statistics over a 12-month period — including average funding times, average credit scores for approved applicants, and average rates. Each data point is verified by a senior editor to make sure it’s accurate at the time of publication. 

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.