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Key Points
- A solar loan is a financing option for buying solar panels.
- Residential solar loans are best for homeowners who want to own their solar panels without paying the total cost upfront.
- Compare quotes from multiple lenders to ensure you’re choosing the right solar loan for your circumstances.
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Solar loan FAQs:
The credit requirements for a solar loan will vary depending on the lender. Rocket Mortgage claims the typical consumer needs a credit score of at least 600 to get a solar loan. Higher scores may be able to secure better rates.
Yes. Applying for a solar loan involves checking your credit, which can temporarily affect your credit score. Making on-time payments for your solar loan can increase your credit score over time. On the flip side, missing payments can lower your credit score.
A secured solar loan is tax deductible. An unsecured solar loan is not tax deductible.
According to Rocket Mortgage, most solar loans take between six and 20 years to pay off. The term length should be outlined in your loan agreement.
Both solar loans and leases avoid paying a large amount up front. Instead, you’ll make a monthly payment. The key difference between solar loans and leases lies in ownership. With a solar loan, you own the solar panel system and make monthly payments to pay it off. Under a solar lease or PPA, the solar installation company owns the system and you pay a monthly fee to lease the system.
Yes. If the terms of your loan include storage, you can also finance a solar battery. If you intend to do this, make sure the solar battery is included in your initial solar system quote. Also, adding battery storage to your loan terms will increase the overall cost of the loan by around $10,000, which could increase the payback period.