Data approachEIA rates · NREL sun hours · 2026 federal policy · methodology
Financing a solar system in 2026 is a different decision than it was a year ago. The federal residential solar credit (Section 25D) ended for property placed in service after December 31, 2025, so there is no federal credit to offset a purchase made with cash or a loan. EnergySage marketplace data put the average price at about $2.60 per watt, or roughly $21,000 for an 8 kW system and about $31,000 for a typical 12 kW system, before incentives. At those prices, the loan you choose can add or save thousands of dollars.
The most important number in a solar loan is often not the interest rate. It is the dealer fee. This guide explains how solar loan rates and fees actually work, compares the main lender types, shows when a HELOC makes sense, and lists the contract clauses worth checking. Before you sign anything, you can model rates and terms with our solar loan calculator.
💳 Loan Rates
How Solar Loan Rates Actually Work in 2026
What APR can I expect on a solar loan?
Solar loans are typically unsecured personal loans, and NerdWallet reports APRs ranging from about 6% to about 36%, with loan amounts up to $100,000. Your rate depends mainly on your credit profile, your debt-to-income ratio, the loan term and the lender. Some personal-loan lenders also charge an origination fee of 1% to 10%, which is deducted from the funds you receive.
What is a dealer fee, and why does it matter more than the APR?
Installer-arranged loans often advertise very low rates. A lender can offer those rates because the installer pays the lender a fee, and the installer recovers it by raising the financed price. The CFPB’s 2024 solar financing report found these dealer fees typically range from 10% to 30% of the cash price, can raise the loan cost by 30% or more, and are not part of the APR you see. In March 2024, the Minnesota Attorney General sued four large solar lenders, alleging hidden dealer fees; those are allegations, and you should check the current status of the case.
The simplest defense is to ask your installer for two figures in writing: the cash price and the financed price. The gap between them is the dealer fee. Then compare loans by effective APR, which is the rate you are really paying on the cash price once the fee is included.
The table below uses a $26,000 cash price and a 20-year term. It is an illustrative calculation, not a lender quote.
Advertised APR
No fee
10% fee
20% fee
30% fee
1.99%
1.99%
3.03%
4.01%
4.95%
3.99%
3.99%
5.11%
6.17%
7.20%
5.99%
5.99%
7.20%
8.36%
9.48%
Data visualization
Effective APR climbs with every point of dealer fee. On a $26,000 cash price over 20 years, a 1.99% loan with a 25% fee has an effective rate near 4.5%. Source: our amortization calculation; Star One Credit Union published rate table 2026.
Chart summary: A loan advertised at 1.99% with a 25% dealer fee has an effective rate of about 4.5%, while a 5.99% loan with a 25% fee is closer to 8.9%, which is above Star One’s top published rate. Low-APR, high-fee loans are not automatically bad, because the 1.99% example above repays about $39,400 over 20 years versus about $54,200 for a no-fee 8.5% loan on the same cash price. They do stop being a bargain once the advertised rate is moderate and the fee is large, so compare the total repayment and the effective APR.
How does loan term change the cost?
Longer terms lower the monthly payment but raise total interest. On a $30,000 loan at 8% APR with no fees, the payment is about $364 a month over 10 years and about $251 a month over 20 years, but total interest rises from roughly $13,700 to roughly $30,200.
Data visualization
Longer terms cost more in total interest. A $30,000 loan at 8% APR with no fees costs about $13,678 in interest over 10 years versus about $30,224 over 20 years. Source: our standard amortization calculation.
Chart summary: Stretching the same $30,000 loan from 10 to 20 years cuts the monthly payment by about $113 but adds roughly $16,500 in interest. If you can comfortably afford the higher payment, a shorter term usually saves money.
📋 Lender Types
The Best Solar Lender Types for 2026
Which lenders finance solar panels?
Installer-partnered solar lenders. GoodLeap, Dividend Finance and EnFin are common names. These lenders offer fast approvals and no-money-down options, but this is where dealer fees are most often found. The market has also shifted: Mosaic filed for Chapter 11 in June 2025, and Sunlight Financial filed in 2023 and emerged after a restructuring. If you hold a loan from either, your servicer may have changed.
Credit unions.Star One Credit Union publishes solar loan APRs of 6.25% to 8.00%, terms up to 15 years, and loans up to $100,000, with no annual fee, no prepayment fee and no closing costs. Non-members must open a savings account to join. Rates change, so check the lender’s current table, and compare your own local credit unions as well.
Online and bank lenders. LightStream, a division of Truist, offers unsecured loans of $5,000 to $100,000 with no origination, late-payment or prepayment fees. Forbes Advisor lists its APR at 7.24% to 24.89% with autopay, with a rate depending on credit and term. SoFi and other personal-loan lenders also fund solar, so compare any origination fee.
PACE financing. Property-Assessed Clean Energy loans are repaid through your property tax bill and are available only in some states. They can help borrowers who do not qualify elsewhere, but the PACE assessment can complicate a refinance or sale. Treat PACE as a last resort.
🏠 HELOC
The HELOC Alternative: When It Beats a Solar Loan
Is a HELOC cheaper than a solar loan?
It depends on the alternative. A home equity line of credit has no dealer fee, so you borrow the cash price rather than an inflated financed price. The trade-offs are real: it is secured by your home, rates are usually variable, and you need enough equity.
Here is a side-by-side for a $26,000 cash price. The HELOC figures assume a fixed 7.5% rate for illustration only, since actual HELOC rates are variable.
Option
Term
Total repayment
Solar loan, 1.99% APR with 25% dealer fee
20 years
about $39,400
HELOC at 7.5%
15 years
about $43,400
HELOC at 7.5%
20 years
about $50,300
Solar loan, 5.99% APR with 25% dealer fee
20 years
about $55,800
Table summary: A very low advertised rate with a large fee can still beat a HELOC on total dollars, so a HELOC is not automatically the cheaper path. It wins against installer loans with moderate rates and large fees, and it gives you flexibility to repay early. If your HELOC rate is variable, a rise in rates would raise your cost.
Is HELOC interest tax-deductible?
Possibly. Interest on home equity debt may be deductible if you itemize and the money is used to buy, build or substantially improve the home that secures the loan. Whether a solar installation qualifies depends on your circumstances, so confirm with a tax professional.
⚠️ Fine Print
Loan Clauses That Can Cost You Thousands
What contract terms should I check before signing?
Tax-credit prepayment and re-amortization. The CFPB flagged loans structured around the 30% federal credit, where the homeowner is expected to make a large prepayment by a set date. If you do not, monthly payments may rise. Because 25D no longer applies to systems placed in service after 2025, ask any lender whether your payments assume a prepayment, and what the payment is without one.
Prepayment penalties. Ask in writing whether you can repay early without a fee. Star One and LightStream both advertise no prepayment fees, and a lender that will not confirm this in writing is worth questioning.
Equipment liens. Some solar lenders file a UCC-1 fixture filing on the equipment. It is not a lien on your house itself, but it can show up in a title search and add paperwork during a sale or refinance.
Origination and other fees. Some lenders charge an origination fee of 1% to 10% of the loan amount. On a $30,000 loan, that is $300 to $3,000, usually deducted from the funds you receive.
Run the numbers for your state
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📍 State Factors
Comparing Solar Loan Options by State and System Size
How do state electricity rates affect a solar loan?
Your loan payment is the same everywhere, but what the system saves you is not. EIA data show the average US residential rate at about 18¢ per kWh in mid-2026. Louisiana sat near the low end at roughly 13¢, while Hawaii was far above the rest, near 48¢ in July 2026. Higher electricity prices shorten the time it takes for savings to cover the payment; lower prices lengthen it. Run your own numbers in the solar payback calculator using the financed price, including any dealer fee.
Installed prices also vary. EnergySage puts the national average near $2.60 per watt and New York near $2.75 per watt, which makes an 8 kW system about $21,000 nationally and about $22,000 in New York.
State policies matter too. Florida exempts the added home value from solar from property tax. In Illinois, full retail net metering ended for new customers on January 1, 2025; new systems are credited under net billing for the supply portion of the bill and can qualify for a one-time $300-per-kW Distributed Generation rebate. Check your state’s current net metering or net billing rules before choosing a loan term. For state payback data, see our guide to Solar Panel Payback Period by State, or read Best States for Solar ROI in 2026.
Sources and Methodology
Rates and policies were checked in October 2026 and can change without notice. Lender rates are from the lender or a published review as linked above. The tables and charts in this guide are original amortization calculations based on the stated assumptions; they are illustrations, not quotes. Dealer-fee figures come from the CFPB’s August 2024 solar financing report. Section 25D status reflects the One Big Beautiful Bill Act and IRS guidance. This guide is general information, not financial, tax or legal advice.
Related calculators
Free tools for US homeowners — instant results, all 50 states.
Direct answers for US homeowners — sized for a $150/month electric bill.
Requirements vary by lender. Review sites list LightStream's minimum score at roughly 660 to 700, with loans from $5,000 to $100,000. Star One Credit Union also lends up to $100,000. Installer-partnered lenders have accepted lower scores, but those loans often include dealer fees. Check your credit report first, then compare prequalified offers, which typically use a soft credit check.
A dealer fee is a charge the lender collects from the installer and the installer builds into your financed price. The CFPB reports these fees typically run 10%–30% of the cash price and are not reflected in the advertised APR. To avoid it, ask for the cash price and the financed price in writing, then compare against a credit union loan, an unsecured personal loan or a HELOC.
Generally no. The Section 25D residential credit ended for property placed in service after December 31, 2025, so buying with cash or a loan earns no federal credit. Leased or PPA systems may still use the commercial Section 48E credit, claimed by the system owner, which can show up in lower lease pricing. Ask any lender whether your payments assume a tax-credit prepayment.
Sometimes. A HELOC charges no dealer fee, so you borrow only the cash price, but it is secured by your home and the rate is usually variable. A low-APR loan with a large dealer fee can still cost less in total dollars than a higher-rate no-fee loan. Compare the effective APR and total repayment over the same term before choosing.
Interest on a standard unsecured solar loan is generally not deductible. Interest on a home equity loan or HELOC may be deductible if you itemize and the funds are used to buy, build or substantially improve the home that secures the loan. Eligibility depends on your situation and current IRS rules, so confirm with a tax professional before relying on it.
$150/month electric bill by state
System size and payback vary by electricity rate and sun hours — see your state.
18.19¢/kWh — US average residential price. Source: EIA Electric Power Monthly, Table 5.6.B (year-to-date through July 2026), residential average retail price (July 2026) (EIA)
Solar production
4.5 peak sun hours/day × 0.82 system derate. Approximate state-average daily solar resource (peak sun hours) based on NREL solar resource data (NSRDB); not location-specific — use NREL PVWatts for an address-level estimate. (NREL PVWatts)
Installed price
$3.00 per watt before incentives. Blended 2026 US residential installed price used by this site; EnergySage marketplace reported about $2.60/W (mid-2026); full-market medians are higher.
Federal tax credit
$0 for homeowner-owned systems installed in 2026 — the 30% §25D credit ended Dec 31, 2025 (IRS)
Net metering
National blend — solar assumed to offset 75% of the bill (87% in full-retail net-metering states, 55–70% elsewhere).
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.