Residential Solar Financing Overview
Paying for your system in cash upfront provides the fastest payback and the greatest savings. But solar savings are strong with financing as well. Loans secured with your home and/or offered by credit unions offer the very best rates. And the interest on any home-secured loans is typically tax-deductible, an advantage over other loan products. We’ve partnered with specific institutions to make the process easier (see below). However, also contact the financial institutions you may already have a relationship with.
Among the questions to ask as you pursue financing are:
- is the interest rate fixed or variable?
- what is the loan’s structure (interest only for a period, which in the long run is more expensive, or fully amortized principal and interest, which results in larger monthly payments)?
- are prepayment and/or early payoff allowed without penalty?
- is prepayment applied to the next payment or to principal (each has its own benefits and disadvantages)?
- what are all the fees the loan will be subject to at the start and over the life of the loan, including points (note that fees rolled over into the loan will ultimately cost more)?
* Always contact a trusted tax professional to verify eligibility in your specific case.