Best Solar Loans in February 2025

The cost of solar panels and installation can be high, averaging nearly $30,000 in 2025. Tax incentives can help, but in most states you’re still looking at an average solar installation cost over $20,000 even after tax incentives are applied. 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 it, a personal loan can be a good replacement. 

LightStream is our pick for the best personal loan for solar installations — because of industry-low rates and extended repayment terms for home improvements. Other top solar loans are offered by Upgrade, Best Egg, and Universal Credit.

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

Best solar loans

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?

Methodology

Credible evaluated 31 personal loan lenders across 899 data points to determine the best solar loans. We scored lenders based on minimum and maximum APRs, available loan amounts, credit score requirements, income requirements, available repayment terms, available loan purposes, funding time, lender reputation and customer experience, origination fees, discounts, whether secured loans are available, whether cosigners are considered, and more.

Each data point was verified by a senior editor to make sure it was accurate and up to date. We used the following metrics and weightings to assign star ratings:

• Rates and fees: 18%
• Loan terms: 18%
• Customer experience: 17%
• Eligibility: 14%
• Customer satisfaction: 10%
• Efficiency: 10%
• Options for poor credit and no credit: 9%
• Discounts: 4%

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

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 two to seven 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.

What are solar loans and how do they work?

A solar loan is a loan you use to finance the purchase and installation of solar panels. Often, these are home equity loans or unsecured personal loans from banks, credit unions, and online lenders. Unlike home equity loans, unsecured loans don’t require collateral and, as a result, can have higher interest rates. 

Solar loans are typically installment loans, meaning you receive the funds upfront in a single lump sum and repay the loan with equal monthly payments over your loan’s term. They also typically have fixed interest rates, which means the rate won’t change regardless of economic conditions.

In addition to personal loans and home equity loans, loans from solar dealers are another option to fund your installation or the panels or both.

Related: How Do Personal Loans Work?

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 a little over $29,000. 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 Ben Zientara, Solar Policy Analyst at SolarReviews. “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?

Solar panel tax credit

Regardless of how you purchase solar panels, you may qualify for a federal tax credit. The Residential Clean Energy Credit covers 30% of new, qualified clean energy property, including solar panels, through 2032. This means if you qualify, you can receive a credit equal to 30% of the cost of your solar investment. 

This credit is nonrefundable, but you can carry forward any unused amounts to future tax years. In other words, if you can’t use the whole credit in one tax year (because the tax you owe is less than the credit), you can use the remaining credit to offset your taxes in future years. 

There are restrictions to be aware of: Generally, you must be purchasing a solar system for your main residence. 

Beyond federal tax credits, you may 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.

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.  

Alternatives to solar loans

There may be other convenient and cost-effective ways to pay for solar panels. Consider the following:

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. 

Solar financing companies and dealer financing 

Beyond traditional personal loan 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, Zientara urges caution among borrowers: “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.

Solar leases or power purchase agreements

Solar leases and power purchase agreements (PPAs) let you benefit from solar energy without owning and maintaining a system. With both of these options, a solar company installs the system on your property, and you agree to use it for a predetermined period of time. While these options don’t provide the benefit of the federal tax incentive, they can provide potential savings through low-cost electricity.

Matt Powers, Founder and Master Electrician at Virtue Solar, says solar leases or PPAs can be a good alternative, but only in specific situations: “In my experience, leases are rarely more beneficial for the homeowner, but there are instances when they work. The main reason is if the homeowner is unable to make use of the available incentives or tax credit — a lot of retirees don't have large taxable incomes, meaning they can't collect on the 30% tax credit.”