blog post

Solar Panel Loans: What You Need to Know

President and CEO
Alex Kaplan
July 12, 2022
CHIEF OPERATIONS & STRATEGY OFFICER
Christina Kahng
July 12, 2022
CHIEF DIGITAL & TECHNOLOGY OFFICER
Sunil Nair
July 12, 2022
Chief Risk & Compliance Officer
Rohit Rana
July 12, 2022
Fred Rubin's headshot
sr. compliance advisor
Fred Rubin
July 12, 2022

Residential solar power has been growing in popularity for years now, maybe you’ve even considered looking into them yourself. If you’ve started looking into solar, you know the long-term investment leads to savings and energy independence, but like most investments, requires money upfront. 

Even though the price of solar panels and other solar-energy technology has been gradually falling over the past several years, you might not have the cash on hand to buy the panels and storage and pay for the installation.

The good news is that a few different financing alternatives are available to assist in making solar panels for your home a reality now. 

What Exactly Is Solar Panel Loan?

A Solar Panel loan is used to finance the purchase and installation of solar panels or other solar energy technology on your property. Now, there are many different ways to finance your solar project but a solar-specific loan comes with a few benefits we’ll describe below. The one thing to remember is that a solar-specific loan will be financed by a company that understands the industry and can get you the loan features you need. The lender may even be able to offer discounts other generic lenders don’t have access to. Make sure you understand who your lender is if you work with your installer to secure financing. 

How Do Solar Loan Programs Work?

Loans for solar energy are simply loans that can be used to finance the purchase and installation of solar panels or other forms of solar energy equipment. The size of your project and the complexity of your home’s infrastructure will be the primary factor in determining how much money you will need to borrow.

Solar loans are not much different from other loans for home improvement projects. The borrower gets approved for the loan amount that makes sense for their project (your installer will create this estimate and give you options). The lender then finances the loan and the money goes directly to the installer and panel manufacturer. Then the borrower makes their monthly payments on the loan for however long your terms are set for. 

Can I Finance Other Projects with the Same Solar Loan?

Every lender has different policies but generally, yes. You may be limited in what you can do in terms of projects and what percentage of the loan can go to projects outside of your solar installation. If you are using the same installer, this will be easier to manage as they will be able to provide the details of the other projects you’re looking to get done. There are a number of lenders who specialize in not only solar loans but also other home improvement projects. Make sure you get all of these details ironed out with your installer as you begin vetting lenders. 

Is Solar Panel Loan the Right Choice for Me?

If you have the cash on hand for your installation and plan on living in your home for many years, it probably makes sense to pay for your installation outright. In the more common case that you can’t afford to pay out of pocket, a loan is a great option since solar systems are low-cost to maintain which means you’ll start paying for your loan as soon as the system is generating power and offsetting your energy costs.

Make sure you and your installer have done a thorough financial analysis of your situation so you know what kind of return to expect based on your location, your power provider’s rates, and any tax incentives. 

Conclusion

A solar panel loan has many advantages over generic loans, especially if the lender is not familiar with solar installations. Are you searching for solar panel financing companies? EnFin, a lending partner for residential solar contractors and installers, is here to help you with your solar financing! Stay tuned for more information.

President and CEO
Alex Kaplan
July 12, 2022
CHIEF OPERATIONS & STRATEGY OFFICER
Christina Kahng
July 12, 2022
CHIEF DIGITAL & TECHNOLOGY OFFICER
Sunil Nair
July 12, 2022
Chief Risk & Compliance Officer
Rohit Rana
July 12, 2022
Fred Rubin's headshot
sr. compliance advisor
Fred Rubin
July 12, 2022