Solar Financing Options: Loans, Leases, PPAs & More (2026)

Paying cash offers the highest return on investment since you avoid interest charges and keep all incentives. A $20,000 system with the 30% tax credit costs $14,000 out of pocket and typically pays for itself in 5-7 years.

Solar loans let you own your system with little or no money down. Interest rates typically range from 3-9% APR with terms of 10-25 years. You qualify for the full 30% tax credit since you own the system. Monthly loan payments are often less than your previous electric bill.

With a lease, you pay a fixed monthly fee to use solar panels owned by a third party. With a PPA, you pay per kilowatt-hour produced. Both offer $0 down and maintenance-free operation, but savings are lower since the company keeps the tax credit.

Property Assessed Clean Energy (PACE) loans are repaid through your property tax bill. They require no credit check and transfer with the property if you sell. PACE is available in select states and can cover 100% of installation costs.

Using home equity to finance solar offers potentially tax-deductible interest and competitive rates. HELOCs provide flexible access to funds while home equity loans offer fixed payments. Both options require sufficient home equity and good credit.