Solar Financing Guide: From Loan Types to Their Best Providers in 2026
Not everyone can afford to pay $30,000 upfront for solar panels. Solar panel financing allows you to spread that cost over, say, 15 years, paying around $200 monthly, depending on taxes and interest rates. The best part? Generated electricity can offset a large portion of these payments, possibly reducing your financial burden by thousands of dollars.
If you can afford higher monthly payments, up to $600, you could shorten the loan term to as little as five years, leaving the remaining years of the solar system’s 25-year lifespan as, roughly speaking, free energy.
In this article, we’ll help you choose the best solar financing options. You’ll learn the difference between secured and unsecured solar loans, solar leases, and power purchase agreements (or PPAs). We’ll also compare the 7 best solar financing companies, so you can choose the one that aligns with your current financial situation and needs.
Why More U.S. Homeowners Are Turning to Solar Financing
Source: Utility Dive
According to the EIA line graph, since the worst of the pandemic, U.S. electricity prices have continued to rise. In 2026, it’s projected to rise to more than 18 cents per kilowatt-hour, outpacing inflation and other energy costs like regular gasoline and heating oil.
As costs rise, more homeowners are turning to renewable energy sources, including solar panels. However, as mentioned, not everyone can afford the upfront $20,000 to $35,000 solar panel system investment – which is why they look for financing options.
Understanding Different Types of Solar Financing Options in 2026
Before signing agreements, it’s always smart to know your options. Let’s explore five different loan types, digging into their terms, interest rates, and more.
Secured Solar Loans
Secured solar loans are called that because they’re backed by your home equity or solar system, meaning lenders can hold a lien – the legal claim on your property – if you can’t pay. The lien is released when you pay off the loan.
Since it carries less risk for lenders, this type of solar financing is among the cheapest and has low interest rates.
Unsecured Solar Loans
Unsecured loans, in turn, can’t use your home equity or solar panels as collateral, which is why their approval rate depends on your credit score and income. Likewise, such loans are faster and easier to apply for, and they have higher interest rates.
Solar Lease
With a solar lease, you rent (or lease) a solar system instead of owning it and pay a fixed monthly fee. Since you don’t own the panels, solar maintenance is not your responsibility. However, the downside is that you don’t qualify for tax credits or incentives except those granted to the lender.
Power Purchase Agreement (PPA)
A power purchase agreement (PPA) means you pay only for the electricity the solar panels produce, not the installation or panels themselves. In this case, you also don’t own the panels, so neither tax credits nor incentives apply.
Important: PPA charges are based on each kilowatt-hour (kWh) produced, and since they’re often cheaper than utility rates, you save more than you spend.
Typically, PPAs expire in 20 to 25 years. Then, you can either renew the agreement or have solar experts deinstall the system.
Equipment Loans
Equipment loans work similarly to secured solar panel loans, with one exception: the collateral may be only the solar system, not home equity. In this option, loan terms match the system’s lifespan.
7 Best Solar Loan Providers in 2026
| Solar Loan Provider | Loan Range | Min Credit | Term Length | APR Range |
| Clean Energy Credit Union | $5,000 – $100,000 | 640 | 5-20 years | 7.49% – 8.24% |
| Dividend | Up to $120k | 660 | 12/20 yrs | Secured, no down payment |
| GoodLeap | Up to $100,000 | 600 | 7-25 years | 2.98% – 9%+ |
| LightStream | $5,000 – $100,000 | Good – Excellent | 2-12 years | Varies |
| SoFi | $5,000 – $100,000 | Good – Excellent | 2-7 years | Varies |
| Sunlight Financial | Varies | 650 | ~20 years | ~3.3% |
| Upgrade | $1,000 – $50,000 | 580 | 24–84 months (2–7 yrs) | 7.74% – 35.99% |
Clean Energy Credit Union is a not-for-profit cooperative focused on “climate-friendly banking.”
Their mission is to involve people in the clean energy movement, which is why their solar electric system loans offer competitive fixed rates with flexible repayment terms of up to ~20 years. They also offer 100% financing for solar panels, installation, and battery storage, require no prepayment penalties, and promise not to increase rates before closing.
The only catch is that you must work with one of the company’s approved solar installation partners.
Dividend Finance
If you prefer installer-supported financing, consider Dividend Finance – one of the larger solar and home improvement lenders in the U.S. It provides loans that installers often present directly to customers at the point of sale.
One of Dividend Finance’s loan products is EmpowerLoan, a secured solar and storage loan that doesn’t require a cash down payment and can reach six figures.
GoodLeap
GoodLeap (formerly Loanpal) is a large fintech lender specializing in solar and sustainable home improvement loans. It features long-term solar system loans, often up to around 25 years, and integrates with many solar installers.
LightStream
LightStream is an online personal lender under Truist Bank that offers unsecured fixed-rate solar power loans for homeowners. You can borrow up to ~$100,000 with no collateral, no home lien, and no origination or prepayment fees.
SoFi
SoFi is a popular lender that offers mortgage loans, student loans, and personal loans suitable for solar system financing. SoFi loans come with competitive interest rates for borrowers with a good credit history, plus flexible repayment terms and no origination fees.
Sunlight Financial
Sunlight Financial works by partnering with solar contractors to provide custom solar and home improvement loan options. They support homeowners throughout the process – from loan credit approval to project completion and beyond.
Upgrade
Upgrade offers personal loans that you can use to purchase solar panels or complete home improvement projects. With transparent rates and flexible terms, Upgrade is a good fit for homeowners with average to good credit who can’t qualify for the lowest rates from specialized solar lenders.
Which Solar Loan Provider Is Right for You?
There are two things to keep in mind when choosing a suitable lender:
- Minimum credit score requirement: Companies may or may not finance your solar installation depending on your credit score. For example, loan providers like GoodLeap and Clean Energy Credit Union approve applications from borrowers with lower credit scores, while LightStream and SoFi require good to excellent scores.
- Faster payoff vs. lower monthly payments: Loans for solar panels can range from just a few years to as long as 25 years (or the overall lifespan of your system). In general, installer-focused lenders (Sunlight Financial) often offer longer terms, while personal loan providers (like Lightstream and SoFi) typically cap repayment at 10–12 years.
Get a free solar quote before evaluating solar panel financing options to see how much you can actually save with solar.
FAQ
What happens if I sell my house before I pay off the solar loan in full?
Selling your home doesn’t automatically cancel your loan. You can either repay the loan before the sale or offer the buyer the option to assume the loan with the lender’s approval.
Is a lower annual percentage rate (APR) always the cheapest and best solar loan option?
Not always, since APR can hide other costs like dealer and financing fees, which can make monthly payments look low on paper but cost more overall. Balloon payments, origination fees, or repayment penalties can also make the solar loan with a seemingly low APR cost more in the long run.
What common hidden fees are built into the loan or system price?
Solar lenders often hide these non-obvious extra costs on paper: dealer or financing fees, balloon payments, origination/processing fees, and system price markups.
