The 5 Best Solar Panel Loans

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Sunshine over solar panels

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Choosing to install a solar system at your house is an exciting decision that can help you reduce energy costs over time and your use of conventional energy. That said, complete solar systems typically cost around $15,000 or more so financing is often necessary. The best solar loans can help homeowners purchase and install solar systems with flexible and accessible terms. 

To help Treehugger readers choose the solar loans that meet their needs, we rounded up the top ones.

Our Top Picks

Best Overall: LightStream

LightStream

 LightStream

Why We Chose It: LightStream offers the best overall solar panel loans because of its high-loan amounts, flexible terms, no-fee structure, and easy-to-use online annual percentage rate (APR) estimation tool.

What We Like

  • - Availability of low-interest rates
  • - Flexible loan terms for those with good to excellent credit
  • - No fees
  • - User-friendly rate calculator lets you estimate your interest rate/APR

What We Don’t Like

  • - Higher minimum qualifications than some lenders we considered
  • - Prospective borrowers can’t prequalify online

LightStream is a consumer lending arm of SunTrust (now Truist) that offers unsecured personal loans that can be used to finance solar panels, among other things. APRs start at about 3.99% with roughly a 0.50% discount for autopay, and go up to around 16.99%, as of December 2020, though these numbers depend on the loan amount, loan term, and borrower’s creditworthiness. 

Borrowers with high credit scores can access flexible loan terms from two to 12 years, and loans are available from about $5,000 to $100,000, making LightStream a stellar option for even the most complex home solar systems. To qualify, LightSteam requires applicants to have a minimum credit score of 660—higher than some lenders require, but less demanding than others. 

LightStream also offers prospective borrowers an easy to use rate calculator that will show your monthly payment and estimated interest rate/APR. As with many options on our list, LightStream does not charge any fees, and upon applying for a loan, borrowers can receive their funds as soon as the same day. Customer support is available six days a week, and applications are processed seven days a week.

Best for Low Credit Scores: Upgrade

Upgrade

Upgrade 

Why We Chose It: Upgrade is our choice for best solar panel loans for borrowers with low credit scores because its minimum credit score requirement is just 580.

What We Like

  • - Accessible to borrowers with fair credit
  • - Allows co-applicants
  • - No prepayment penalty

What We Don’t Like

  • - High APR range will increase the overall cost of a solar panel loan
  • - Only offers three- and five-year loan terms
  • - Charges fees for origination, late payment, and insufficient funds

Upgrade is an online banking and lending platform that offers personal loans for between roughly $1,000 and $35,000. Although Upgrade has the lowest maximum loan amount of lenders on our list, it stands out because of the lender’s commitment to helping borrowers with low credit scores. 

Applicants can qualify with a minimum credit score of just 580, and there is no minimum income requirement. Upgrade does prefer borrowers have a minimum monthly cash flow of $800, but the lender allows co-applicants, making it an even more feasible way to fund your upcoming solar project.

While Upgrade is an option for higher-risk borrowers, APRs are higher than other options on our list—from roughly 7.99% to 35.97%, as of December 2020. Loan terms are also a bit limited—available only for three- and five-year terms. But, again, Upgrade makes up for this with its accessible eligibility requirements. Finally, while borrowers will have to pay an origination fee between approximately 2.9% and 8% of the loan amount, as of December 2020, there aren’t any prepayment penalties.

Best for Pricier Projects: SoFi

Sofi

 Sofi

Why We Chose It: We chose SoFi for those who want to finance more expensive solar panel projects. Its high loan amounts and lack of origination, prepayment, and late fees stood out.

What We Like

  • - No origination, prepayment, or late fees
  • - Customer support available seven days a week
  • - High available loan amounts (up to about $100,000)

What We Don’t Like

  • - Higher interest rates than some lenders
  • - Imposes a minimum income requirement

Like Upgrade, SoFi is an online lending platform that offers personal loans for a number of uses, including the purchase of solar panels. However, SoFi stands out because it extends loans from about $5,000 all the way up to $100,000—more than Upgrade and Marcus.

This makes SoFi an excellent option for borrowers who need to cover expenses related to a complex and more expensive solar system. Borrowers can even receive funds as soon as the next day, but it may take longer for larger loans. 

To qualify for a SoFi personal loan, applicants must have a minimum credit score of 680 and an annual income of at least $45,000. Keep in mind, though, that co-signers are not permitted, so you’ll need to meet SoFi’s qualification standards on your own.

Approved borrowers will get an APR between roughly 5.99% and 18.28%, as of December 2020, with about a 0.25% autopay discount, making it one of the most competitive lenders on our list. What’s more, loan terms can extend from two to seven years, so you’re more likely to find a monthly solar payment that works for your budget. 

Best for Customizable Terms: Marcus by Goldman Sachs

Marcus by Goldman Sachs

Marcus by Goldman Sachs

Why We Chose It: Marcus is our favorite choice for borrowers who want flexible solar panel loan terms, due to the availability of nine loan term options between three and six years.

What We Like

  • - No fees whatsoever
  • - Flexible loan terms between three and six years
  • - Enables applicants to prequalify with a soft credit check

What We Don’t Like

  • - Lower loan amounts than some lenders offer
  • - Highest APRs are less competitive than some lenders
  • - Does not allow co-signers or co-applicants

As a consumer banking and lending arm of Goldman Sachs, Marcus offers borrowers access to flexible, no-fee personal loans that can be used to finance solar panels.

Loans are available between roughly $3,500 and $40,000—not the highest on our list, but enough for most home solar systems. Plus, Marcus loans can be borrowed for nine different terms between three and six years, so it’s easier to find a term—and monthly payment—that meets your needs. 

Marcus doesn’t disclose its minimum credit score, but it’s comparable to other lenders on our list—likely around 660. Prospective borrowers can also prequalify for a Marcus loan with a soft credit pull and discover their estimated APR (between around 6.99% and 19.99% APR with a 0.25% discount for autopay, as of December 2020). Like SoFi, however, co-signers and co-applicants are not permitted.

Best Solar-Specific Loans: Dividend

Dividend

Dividend

Why We Chose It: Dividend stands out as the service with the best solar-specific loans because of its flexible financing options for both solar panels and energy storage solutions.

What We Like

  • - Specializes in financing for solar and energy-efficient home upgrades
  • - No out of pocket costs
  • - No prepayment penalties

What We Don’t Like

  • - Not available in certain states
  • - Doesn’t provide much loan information on its website
  • - Not available in several states

Dividend is an online lending platform that aims to make financing solar and other home improvements more accessible through low interest rates and a streamlined application process.

Because the lender understands what goes into solar installation and maintenance—and specializes in both solar panels and energy storage—Dividend takes a more tailored approach to solar lending. It even works directly with more than 700 certified solar panel suppliers and installers.    

And, while Dividend doesn’t provide specific details about available terms and APRs on its website, the platform does promise instant credit decisions and an easy application process. What’s more, financing terms are reportedly flexible, and there are multiple financing options available.

That said, Dividend isn’t available in every state, so check with a representative to find out whether it can help meet your solar financing needs. 

Bottom Line

If your solar panel provider doesn’t provide financing—or if you want to shop for more competitive rates—there are a number of lenders that offer personal loans to cover solar expenses. The best solar panel loans have low rates, flexible terms, and accessible eligibility requirements. Our best overall pick—LightStream—is a flexible lender that provides customers access to high loan amounts for a range of loan terms. Plus, APRs are competitive, and there are no fees, making it a less expensive way to finance solar panels—especially if you have a strong credit score. 

What Is the Best Way to Finance Solar Panels?

There are a number of ways to finance solar panels, with the best option depending on your specific needs and circumstances. In general, though, financing typically comes in the form of solar-specific loans, general personal loans, or financing through solar panel suppliers and installers. You can also opt to take out a home equity loan or line of credit to finance your home’s solar upgrade. 

How Long Can You Finance Solar Panels?

Solar panel loan terms can range from as few as two to 20 years, though they can be longer. As with other types of loans, terms for solar panel loans differ based on factors like a borrower’s creditworthiness and the size of the loan. 

Is a Solar Loan Tax Deductible?

Generally speaking, interest that’s paid on personal loans is not tax-deductible. However, if your solar loan is secured by your home—as with a home equity loan or another type of mortgage financing—the interest is tax-deductible. There are also a number of tax credits available for certain expenses related to the installation of solar systems. 

How We Chose the Best Solar Panel Loans

To choose the best solar panel loans for Treehugger readers, we evaluated 15 top lenders and compared them based on factors like APR ranges, available loan terms and amounts, and fees. We also looked at each lender’s application process, customer service options, and whether the lender allows co-signers or co-applicants.