What You Need To Know About Solar Financing

Are you wanting to power your home with solar energy, but are unsure how to finance having solar panels installed? To help you understand how to pay for solar, let’s take a look at how solar financing works.

Solar Financing
There are several ways to finance having solar panels installed.

How Much Do Solar Panels Cost?

It’s important to understand the cost behind solar panels, which is determined by several factors.

Type of Solar Panels and Equipment

Most solar systems consist of three components:

  • solar panels, also known as PV panels (photovoltaic panels)
  • solar inverter, which transforms the energy generated from direct current (DC) to alternating current (AC) power
  • racking system: how the panels are held together and installed upon a surface

Due to technological advancement and mass production, the cost of these components has decreased significantly over the last few years, while solar panel efficiency continues to increase.


Be sure to include the cost of installation when budgeting for solar panels. The installation cost will vary, but on average will start just below $11,000 for a 5 kW system. Size and type of panels will affect installation cost, as will the roof type of your home or business. A general rule of thumb is the more complex your roof is, the higher the installation costs. For an idea of how much a solar system will cost, reach out to Atlasta Solar Center for a free quote.

Location and Incentives

Where you live will affect solar financing. For example, some (but not all) states offer tax incentives for solar installations. These incentives can significantly reduce costs. Common state solar tax incentives include:

  • Property tax exemptions
  • Utility rate discounts
  • Tax credits

It’s important to note that the type and availability of these tax incentives will vary from state to state.

Solar Financing Options for Panel Installation

Now you know the factors that determine the costs of solar panels. But how do you pay for solar? There are several financing options to consider:


Paying for solar panels in cash allows you to own the solar system from the very beginning. You won’t have to make monthly payments, or any interest payments. Paying in cash also allows you to get the full benefits of any state, federal, or local tax incentives available. Paying in cash all upfront is also the best way to maximize the savings from solar. If you decide to sell your home, you can transfer the ownership of the solar system to the new homeowner. Of note: solar systems often increase the value of your home.


Like a new home, most individuals do not have enough funds to buy a solar system outright. For installations that require a large upfront investment, a loan is an option. With a loan, you own the solar panels.

Solar Loan

Solar loans allow you to go “solar” with no down payment. Oftentimes with this kind of loan you can pay for solar power at a lower cost than what you currently pay for electricity. This loan is especially ideal if you have a good credit score. To compare rates and terms, check with your bank, other local banks, credit unions, and online lenders. There are also many energy efficiency and home improvement loans available, as well as tax-deductible options.

The Solar Energy Loan Program (SELP) also offers loans for solar panel installation, and is administered by the U.S. Department of Energy’s SunShot Initiative.

Personal Loan

Personal loans often have fixed rates of interest. These loans have monthly payments, so you’ll always know how much you’re paying. The upside is the loan’s interest may possibly be lower than the return on investment from solar.

Other Loan Types You Can Use For Solar Financing

There are many home improvement and energy efficiency loans available, so be sure to do your research. Questions? Talk with professional installers, like Atlasta Solar Center.

Home equity loans: with fixed interest rates and monthly payments, home equity loans work like personal loans. The difference is home equity loans let you borrow against your home.

Home equity lines of credit: as the name suggests, home equity lines of credit act like a credit cards, with lines of credit you can borrow against. It’s important to note these come with variable interest rates, so the amount you will pay will change over time.


A lease is a contract between the solar panel company and the homeowner. With a lease, the solar company owns and operates the solar panels on your property (whereas with a loan, you own the solar panels.)

With a lease, you pay for the electricity generated by the system solar. Oftentimes this electricity is at lower rate than your current utility bill. A lease is an ideal option if you want to go solar but do not want to deal with maintaining the panels.

It’s crucial to point that with a lease, you are not eligible to receive any solar financial incentives or rebates. Instead, the company that owns the system is eligible.

Power Purchasing Agreement (PPA)

Similar to a lease, a solar Power Purchase Agreement (PPA) is a contract between a solar developer and a customer. With a PPA, you agree to buy electricity generated by the solar system for a set amount of time (usually 10-20 years.) As with a lease, the upside of a PPA is you often pay at a lower rate than you would for utility-provided electricity.

Unlike a lease however, you will own the system outright once the PPA expires. PPAs are only available in select states.

Solar Financing Options
Solar panels can save you money on energy bills.

Solar Financing FAQs

Here are several frequently asked questions about solar financing:

What are the financial benefits of using solar energy?

Using solar energy will save you money on your electricity bills, and can protect against rising energy rates in the future.

Can I get solar financing for solar panels at my business?

Yes. Look into Commercial property-assed Clean Energy (CPACE). This is a partially government-funded financing structure that allows owners to borrow funds for green energy. With CPACE, you make repayments based on your property tax bill.

What solar financing options does Atlasta Solar Center offer?

For residential solar, we offer several zero-money-down financing options. For commercial solar, we offer various financial options, to fit your business’s needs. To learn more, call us at 970-248-0057.

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