Best Solar Panels Loans in 2024 [Ultimate Guide]

Most residents in the United States are worried about the rise in their monthly electricity rates and are moving towards solar panels as a sustainable and cost-effective solution. However, the initial investment for solar systems typically ranges from $15,000 - $23,000, depending on the number of panels and the overall consumption requirements. This is where solar panel loans come into play, as they provide a financial pathway for individuals and families to make the switch to solar energy without the burden of upfront costs.

As you will learn, different types of solar panel loans are available in the United States, each created to meet different financial needs and situations. That said, if you do not wish to get involved in solar panel loans and are looking for more affordable options, you can check out the monocrystalline foldable solar panels from Renogy.

What is a solar loan & how do they work?

As the name suggests, a solar loan is a financing option that allows homeowners or business owners to install solar panels on their property with minimal or no upfront costs. The solar panel Loan is similar to a home improvement loan that one avails from a bank or a private entity that covers the cost of purchasing and installing solar energy systems.

Just like any other personal or professional loan, the borrower repays the loan amount over a previously agreed-upon time, typically with fixed monthly payments. This way, they can enjoy reduced electricity bills and even avail of tax rebates from the federal or local government.

Here's how a solar panel loan works:

• Always start by checking different loan providers who have the best interest rates and have good customer ratings.
• Once you have finalized a solar panel loan lender, then you can sign the contract and make the initial payment (if required).
• Once a homeowner chooses a solar panel loan, the lender pays the solar installer directly for installation, and you will start making monthly payments to the lender.

Solar panel loans often have lower interest rates than other financing options. Depending on the loan terms, one can choose from various repayment periods, which usually range from 5 to 20 years. If you want to go solar in 2024, consider checking out the foldable and portable solar panels from Renogy. They can be used anywhere to convert the sun's energy into electricity and charge household or outdoor appliances.

In the United States, the estimated cost of installing solar panels depends on multiple factors, including the manufacturer, types of solar panels, service provider, demographics, and monthly or yearly usage. For instance, a monocrystalline solar panel roughly costs $1 to $1.50 per watt, whereas a polycrystalline solar panel will cost $0.90 to $1 per watt.

Here's an average cost of installing solar panels in different states:

State	Average Cost
Chicago	$23,600 - $25,000
Detroit	$30,250 - $35,000
Las Vegas	$29,000 - $35,000
Minneapolis	$24,500 - $30,000
New York	$26,500 - $30,000
Phoenix	$30,400 - $33,000
Seattle	$23,700 - $28,000

Who is eligible for a solar panel loan?

Eligibility for a solar panel loan generally depends on several important factors, like credit score, property ownership, debt-to-income ratio, and more. Additionally, the eligibility criteria also depend on the lender and the specific type of loan amount that you are applying for. Here are a few of the most common criteria to avail of a solar panel loan for your property:

Credit Score

A higher credit score often translates to better interest rates and loan terms, which is why most lenders require a minimum credit score of 650 or higher to qualify for a solar panel loan. However, some lenders may accept lower scores, but they might adjust the repayment term durations.

Income and Employment Stability

In most capital cities, lenders will assess the income level and job stability to ensure that one can afford the monthly payments. In most cases, they might ask to provide proof of income or a bank statement from the last few years to understand the consistent income stream from the borrower’s end.

Debt-to-Income Ratio (DTI)

Debt-to-Income ratio is the percentage of a borrower’s monthly income that goes toward paying debts. In the United States, most high-end lenders typically prefer a DTI ratio below 43%, though some may allow higher ratios depending on other significant factors.

Different solar panels loan providers in 2024

If you are planning to get a solar panel system installed on your property and looking for the best solar panel loan offers, then you need to understand that there are various lenders. Each of the lenders offers different terms, interest rates, and loan amounts. So, before choosing the right solar panel loan, you should first analyze and calculate your financial situation and ongoing renewable energy goals.

Here are a few notable solar panel loan providers in the United States:

SoFi

SoFi is an online lending platform that offers unsecured fixed-rate personal loans in all 50 states in the US. Loan amounts range from $5,000 to $100,000, and borrowers can choose repayment terms from two to seven years. SoFi requires a minimum annual income of $45,000 and a credit score of at least 650.

Pros

• High loan amounts are available for users with good credit scores and annual income.
• There are multiple repayment terms available.
• With a good credit history and income source, one can get same-day approval as well.

Cons

• Not everyone can have such a high credit score.
• SoFi does not allow co-signers during the contract signing.

LightStream

LightStream is a division of SunTrust Bank that offers highly competitive personal loans ranging from $5,000 to $100,000. What is amazing about LightStream is that it charges no origination, late payment, or prepayment fees from the lender. It even offers a 0.50% rate discount for those who enroll in autopay services.

Pros

• LightStream offers a rate-beat program for solar panel installers.
• There is an autopay discount available for all.

Cons

• There is no prequalification available.
• It has a low average customer rating on different customer review websites.

LendingPoint

If you do not live in Nevada or West Virginia and have a credit score of 600, then you can also check out LendingPoint. Even though it has a 10% origination fee, it provides longer loan terms-- ranging from 24 to 72 months. These long durations give borrowers ample time and flexibility in repayment.

Pros

• It is easily accessible to borrowers who have lower credit scores.
• It has flexible repayment options.

Cons

• It has high origination fees and higher maximum APRs.
• It does not provide services to all the states.

Upgrade

If you are looking for small loan amounts between $1000 and $50,000, Upgrade can be a good option. What sets Upgrade apart from the others is that it allows co-signers, which can directly increase the chances of approval for those with lower credit scores.

Pros

• You can get a solar panel loan even if you have a credit score of 580.
• It allows co-signer, which increases the chances of getting an approval.

Cons

• Compared to the others, it has a high APR range of 9.99% to 35.99%.
• Upgrade’s origination fees reduce the overall loan amount.

Discover

Discover offers personal solar panel financing loans ranging from $2,500 to $40,000. That said, to get a solar panel loan from Discover, you will require a minimum credit score of 660. However, it compensates the credit score by providing relatively flexible repayment terms between three and seven years.

Pros

• There are no origination fees or prepayment penalties on approved solar panel loan amounts.
• It offers flexible repayment options to its borrowers.

Cons

• There is no autopay discount available for borrowers.
• It does not allow co-signers or co-borrowers.

How to Get a Loan for Solar Panels

Securing a loan for solar panels involves several steps that help you get the best possible financing terms. Here is a step-by-step guide that will help you understand how to get solar panel loans as you make the switch to renewable energy.

Step 1: Assess Your Financial Situation

Before applying for a solar loan, first evaluate your financial condition. Get in touch with your bank and check your current credit score. You can even calculate your debt-to-income ratio to understand how much you can afford to borrow.

Step 2: Research Solar Installers

Always conduct proper research before finalizing the solar installers. You can go ahead with a reputable solar installation company that provides transparent pricing and quality service. Request quotes from multiple installers to understand the overall cost of the solar panel system, including installation, equipment, and maintenance. This will help you understand how much of a loan you would require.

Step 3: Explore Loan Options

Research different solar loan options available in the market. You can check out the five best solar panel loan providers mentioned here and compare them based on interest rates, loan amounts, repayment terms, and fees. You can even look for lenders that offer pre-qualification and flexible repayment terms.

Step 4: Apply for the Loan

Once you’ve chosen a lender, gather all the necessary documentation, including proof of income, credit history, and details of the solar installation project. Visit the lender’s office or fill out the online application form. If you are going ahead with a co-signer, then ensure they provide the required documents as well.

Step 5: Review and Sign the Loan Agreement

Once the lender has approved your solar panel loan amount, then carefully review it. It is highly recommended to pay attention to the interest rate, repayment schedule, and any associated fees. Once you’re satisfied with the terms, go ahead and sign the agreement and proceed with the solar installation.

Conclusion

Investing in solar panels is not only an environmentally conscious decision but also helps you in reducing your monthly living expenses. If you aim to install solar panels but are worried about the lump sum upfront cost, then you can choose from various solar panel loans based on your credit score, monthly income, and repayment preferences. Renogy is a well-known solar brand that manufactures high-quality solar panels, off-grid solar kits, and batteries to charge appliances with the help of free solar energy. They're affordable, so you can use solar panels without spending a lot of money.

FAQs

How long are solar panel loans?

The duration of solar panel loans ranges from 5 to 20 years, depending on the lender and the specific loan products. In most cases, shorter terms usually result in higher monthly payments but lower overall interest rates. That said, longer terms will help you manage your finances but will increase the overall interest paid.

Are solar loans transferable?

In most cases, solar loans are not transferable if you sell your home or property. This means that you will need to pay off the remaining balance of the solar panel loan before or at the time of selling the property. However, it also depends on the buyers if they are willing to pay off the loan amount while adjusting the buying amount.

Will solar panels pay for themselves?

Yes, solar panels can pay for themselves if you stay on the property for a long time. The payback period depends on factors like the cost of electricity in your area, the size and efficiency of your solar system, and any applicable financial incentives.