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Best Solar Financing Companies

Profile picture of Kate Williams, Ph.D.
by Kate Williams, Ph.D. ConsumerAffairs Research Team

Solar energy is cheaper now than ever before, but it’s still not widely affordable for the average homeowner. This is where solar financing companies come in. Many solar organizations offer financial help in the form of loans, leases and power purchasing agreements (PPAs). These help offset the purchase, installation and maintenance of your solar energy system.

We talked to Christina Mathieson, CEO of Clean Energy Options, and learned that when it comes to financing a solar energy system, most homeowners and small to midsize businesses just aren’t sure what their options are. Our guide gives you all the information you need to make the right decision.

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Dividend Solar
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Finances zero-down solar system loans in more than 25 states with installation, low or flat-fixed rates, a 10-year workmanship warranty and optional 20-year extended service plan. Storage batteries and PACE financing is available.

Solar Five
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Provides residential and commercial solar energy ownership and lease options on the East Coast with installation, monitoring, 20-year system warranty and five-year workmanship guarantee. Rooftop and ground systems available.

EnergySage
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Nationwide cost-comparing network gathering competitive offers from pre-screened installers in an online solar marketplace. Customers can request and compare competing quotes and research solar financing across 30-plus states.

Affordable Solar
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Based in New Mexico, Affordable Solar provides supplies, financing and logistic support for solar businesses, contractors and installers. The Elite Installer Program gives customer support and discounts on equipment to businesses.

LightStream
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LightStream is an online lending service. They do not offer solar leases, PPAs or installation. The company offers unsecured personal loans for a variety of uses, including solar panels.

Mosaic
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Mosaic is a solar energy company that partners with solar contractors. The company provides solar loans on systems and batteries. Mosaic also provides a digital platform that connects you with your solar provider.

REC Solar
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Based in San Luis Obispo, California, REC Solar provides logistical and financial support for businesses in multiple sectors installing solar energy systems. The company’s projects span more than 20 states and Puerto Rico.

Renew Financial
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Renew Financial lends to California and Florida homeowners who build energy- or water-saving improvements on their home. Renew also offers commercial loans for businesses and multifamily residential projects.

Sunlight Financial
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In business since 2007, Sunlight Financial offers homeowners and solar providers a customizable set of solar loan products. The company helps customers go solar with no money down.

VERT Solar Finance
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VERT Solar Finance is a solar financing company that provides tax equity, funding and advising to large companies, property owners, developers and investors working on large-scale solar projects in North America.

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Ways to finance your solar energy system

Solar loan

A solar loan is the best option for people who want the tax credits for going solar and can afford a set monthly payment. Homeowners and business owners can get a 30 percent federal tax credit when they take out a solar loan. This tax credit (called the ITC) is 30 percent through 2019. It will drop to 26 percent during 2020 and 22 percent in 2021. It will drop to zero in 2022 for homeowners and 10 percent for commercial and utility customers.

Solar loans are not much different from regular home improvement loans. You borrow a set amount of money from a lending institution and use it to pay for a solar energy system. You agree to pay back the loan with interest over a certain amount of time. Secured solar loans use your home or the energy system itself as collateral.

Solar customers should be wary of jumping into the first solar contract they see. Unlike mortgage or other lenders, solar lenders don’t have to disclose the details of their loan product. Some loan companies include fees to the contractor inside of their rates.

  • Pros: Solar loans are available from a variety of institutions, including banks. Loans enable you to buy your solar energy system, which means that you get the tax credits and any other incentives for going solar. All the energy you produce comes at no cost to you, other than what you’ve paid for the system. Solar panels can last and produce energy long after the loan’s terms are up. Also, you can do whatever you want with the system when you sell your home.
  • Cons: Owning your solar energy system means that you will be responsible for the cost of installation, repairs and maintenance. Some solar loans are secured by your home, meaning that you put up your home up as collateral. This means that you could lose your home if you default on the loan. Some loans are secured by the solar energy system itself, though, so the only risk is losing the system.
  • Bottom Line: If you can afford a set monthly payment and aren’t worried about putting your home or the solar system up as collateral, then a solar loan might be your best option. You’ll get the tax benefits, plus you have ownership over your system, giving you the freedom to do whatever you want with your system when you sell your home.

Solar leases

A solar lease allows you to rent panels for a monthly fee and use the energy they produce. The monthly lease cost is often less than you’d pay for energy from your power company. With a solar lease, you rent your solar panels and pay no up-front cost. Leases generally last from 15 to 25 years. They’re best for building owners and homeowners who want to pay a flat rate and who don’t plan on selling anytime soon.

According to Mathieson, leases are usually made for a 20-year term. You might make flat monthly payments for the full term of your lease, or you might have an escalator term, in which your payment gradually rises over the length of your term.

There’s no standard for how payments are made on a lease, so Mathieson advises homeowners and business owners to clarify the terms of their lease payments with the company representative.

  • Pros: You don’t have to worry about paying for the installation, upkeep and monitoring of the system. If the panels produce more energy than expected, you don’t have to pay extra for it, as you would with a solar PPA.
  • Cons: You’re not the owner of the solar energy system, so you won’t receive the tax credits for going solar. A solar lease must be transferred if you sell your building before the lease is finished, and it might be hard to convince a potential buyer of the value of taking on your solar lease. When the lease runs out, you’ll have to choose to either renew the contract or give back the system.
  • Bottom line: Solar leasing can be a good option for homeowners who know they aren’t going to move during the length of their lease. A lien is placed on your property when you don’t own your solar system, so make sure you understand exactly what you’re signing onto before making a decision.

Solar power purchase agreements (PPAs)

As with a lease, the solar financing company owns the solar equipment when you opt for a PPA, so the company installs and maintains it.

The amount of electricity your system produces will depend on the season and the length of the day. You’ll produce more energy during the summer months, when the days are longer, than during the winter. That means the amount you pay will fluctuate throughout the year.

  • Pros: Installation and maintenance are done at little or no cost to you. Instead of paying a flat monthly rate for your panels, as you do for a solar lease, you pay for the energy your system produces. This is ideal if your building is in an area with occasional cloud cover since you only have to pay when the sun hits the panels.
  • Cons: The developer or the solar financing company owns the panels, so it gets the tax credits for installing renewable energy instead of you.
  • Bottom Line: PPA customers won’t reap the tax credits that come from system ownership, so they’re ideal for those who don’t pay taxes (like non-profit organizations). If you want to claim the tax benefits from going solar, consider a different financing option.

How do I choose the best solar financing option?

Homeowners

If you’re a homeowner, switching to solar energy could cut your energy bills by as much as 75 percent. Going solar will also help you reduce your carbon footprint, making your home more eco-friendly.

The cost of solar has fallen by more than 70 percent in the past 10 years, according to U.S. Department of Energy. Enough solar energy systems have been installed in the past year alone to power more than 8 million homes.

Of all the home renovation projects homeowners can make, solar is one of the most cost-effective since it’s subsidized by the federal and state governments, plus you can lock in the rate of your loan to ensure your monthly payments don’t increase in the future.

If you’re a homeowner who might move within the next 20 years, consider a loan from companies like Dividend Solar, Vivint Solar, Solar Five, EnergySage, SunRun, LightStream, Sunlight Financial, ReVision Energy, Mosaic and Renew Financial.

If you plan on staying put for 20 years and don’t want to deal with the headaches of a loan, consider a PPA or solar lease from companies like Vivint Solar, Solar Five and SunRun.

Business owners

It can be good for your business to use solar and other sustainable energies to save money, reduce your carbon footprint and attract sustainability-minded customers.

Companies like Wal-Mart, Target and Apple are switching to solar energy, and many businesses report being powered by 100 percent solar energy. Part of the appeal of commercial solar is getting financial incentives from the government. But the biggest incentive for businesses is that the solar energy system will pay for itself if they use all the deductions available.

If you’re a business owner looking to invest in solar, work with companies that specialize in commercial solar financing, like Solar Five, EnergySage, LightStream, VERT Solar Finance, ReVision Energy and REC Solar.

Installers and contractors

If you’re a solar installer or contractor, you might need a solar financing company to lend you the capital to install and monitor solar energy systems. Or you might need a company that can connect you with customers, take care of logistics and operations, and process transactions and procurement.

The number of solar jobs has more than doubled in since 2012 to keep up with demand, and you might find yourself in need of extra resources.

Some companies work specifically with installers and contractors, like Dividend Solar, EnergySage, LightStream, Sunlight Financial, Mosaic and Affordable Solar.

Nonprofits and schools

If you operate a charity, a nonprofit or a school, moving to solar energy can lessen your carbon impact as well as your dependence on the electric grid. Some of the solar financing companies in this guide have experience working in the nonprofit sector.

Organizations that are tax-exempt under 501(c)(3) can’t take advantage of tax credits, so a PPA or lease might be better options than a solar loan.

Work with a company that specializes in solar financing for nonprofits and schools, like Solar Five, EnergySage, LightStream, ReVision Energy, REC Solar and Renew Financial.

Common questions about solar financing

Will my solar installer offer financing options?

Several solar installers also offer financing, such as Dividend, Vivint, Solar Five, SunRun, ReVision Energy, Mosaic and Renew Financial. These full-service institutions help you avoid the potential hassle of purchasing. With this method, you have to work with only one company, as opposed to working with a lender and an installer.

Other lenders, like LightStream and Sunlight Financial, lend directly to you, and you take that money to purchase a solar energy system for yourself. This allows you some leeway in how you spend, but it means you’ll have to do all the work of buying the system.

Can I finance a solar battery?

Yes! To take more advantage of your solar energy system, you can finance a solar battery, which stores energy from the system and saves it for future use instead of sending energy back to the grid. This battery can kick in during times of low solar activity or when your grid loses power.

Solar battery prices currently range from $5,000-over $7,000. Like other new technologies, industry experts expect prices to drop over the course of the next few years. If you frequently lose power, consider buying a battery along with your system. If you don’t lose power too often, you might want to hold off, since more cost-effective batteries are expected to be available for consumers as the technology evolves.

Several companies finance solar batteries, including Vivint Solar, REC Solar, SunRun, ReVision Energy and Mosaic.

I don’t have space to install a solar energy system. Can I still get solar?

If you don’t have space for solar panels at your house, think about paying into a community solar farm. These large co-owned solar arrays send electricity to the grid. Members who pay into the farm receive their share depending on how much the solar farm produces.

This solution works well for people who want the benefits of solar energy but don’t have the room or means to purchase or maintain their own solar energy system.

Solar financing companies that offer community solar include ReVision Energy and EnergySage.

Do solar panels help resale value?

Yes, but only if you own the system, which happens when you take out a solar loan. If you decide to move, you can take the system with you when you sell, but you’ll have to restore the roof. Or, you can keep it on the roof and roll its cost into the building’s price.

With interest in renewable energy on the rise, recent studies on home appraisals suggest that homeowners, on average, are seeing an increase in resale value when they sell a home that already has a solar energy system installed.

Is it difficult to sell a house with leased panels?

It’s more difficult to sell a home or building when you have a solar lease or PPA than when you have a solar loan. If you think you’ll sell your home or commercial building in the near future, opt for a solar loan instead of a solar lease or PPA.

If you already have a solar lease or PPA and are getting ready to sell, then you have two options:

1. You can roll the lease or PPA into the cost of the building, meaning that the new owners will take over your monthly payments. Know that even when buyers are willing to take over the payments of your solar lease, the process isn’t simple.

2. You can pay off the lease or PPA before selling, and the company will remove the solar panels. (The solar financing company will dictate the price of this.) Many home buyers aren’t interested in taking over the lease, and they especially don’t want to take over the lien that comes with the lease, which is causing many home sellers to pay off their solar lease or PPA before they sell their house.

Work with a real estate professional who is familiar with solar PPAs and leases when it’s time to sell your home to make sure the sale goes as smoothly as possible.

What sorts of warranties do solar financing companies offer?

Most companies offer lifetime warranties on their solar energy systems. These warranties cover the system for up to 20 to 25 years.

Some companies, such as Dividend, offer the option to finance an extended warranty, which can cover the system for an additional 20 years.

Solar financing expert reviews

LightStream

Based in San Diego, LightStream is the online consumer lending division of SunTrust Banks, Inc. Since LightStream is a lender, it doesn’t lease or install solar equipment. LightStream offers loans for a variety of things, including jewelry, horses, school tuition and solar energy.

  • Solar loans: LightStream provides solar loans from $5,000 to $100,000, with loan terms of up to 84 months. The company offers loans to those who have been turned down for home equity loans or who’ve had their home equity line of credit frozen.
  • Paperless application: LightStream’s application is entirely digital, meaning you won’t have to print, fax or mail anything. Review of and response to applications takes less than one business day, and LightStream aims to deposit your money on the same day.
  • Loan experience guarantee: If you’re dissatisfied with LightStream’s loan process, it will give you a $100 reward for filling out a complaint questionnaire. This offer expires in the first 30 days of receiving your loan.
  • Rate Beat Program: LightStream will match any other lender’s interest rate (APR) by 0.10 percent if the loan is for the same amount, term and purpose. You must be approved for the other lender’s loan for this program to work. Details can be found on the “About” page.
  • States available: Since LightStream is an all-purpose lender, it is not limited by location.
  • Best for: homeowners who want to receive their loan money quickly.
Sunlight Financial

Based in Teaneck, New Jersey, Sunlight Financial is a solar financing company providing residential solar loans. The company also partners with solar suppliers and installers to offer its loans as a third party.

  • Solar loans: Sunlight Financial’s solar loans have terms of 10 to 25 years, with interest rates ranging from 2.49 to 6.99 percent.
  • Partner program: Sunlight Financial partners with solar brands, which bring Sunlight’s loans to homeowners. Sunlight provides customizable loan products for each brand.
  • No risk to your home: Sunlight Financial’s solar loans are secured by the solar energy system, not your home, so defaulting on a solar loan does not put your home at risk.
  • Phone or online applications: Sunlight Financial emphasizes the speed and simplicity of its applications, which can be done through the phone or online.
  • States available: Sunlight Financial serves consumers in all 50 states.
  • Best for: solar providers who want to provide a loan platform for their customers.
VERT Solar Finance

Based in Houston, VERT Solar Finance is a solar financing company that funds large-scale solar energy projects. The company advises and funds property owners, developers and investors creating solar energy in North America.

  • High-dollar portfolio: Since 2009 (as VERT Investment Group before 2015), VERT has advised on over 50 transactions totaling more than $20 billion. The company has transacted on more than 7,500 megawatts of power.
  • Long-term support: VERT’s financing system supports the entire lifecycle of a large-scale solar project. The company offers technical and project management expertise to clients.
  • High profile projects: In 2012, VERT Solar Finance provided tax equity to FLS Energy to create the nation’s then largest solar farm, with more than 2,100 solar panels, in St. Pauls, North Carolina.
  • Solar playbook: VERT Solar Finance’s e-book, The VERT Solar Playbook, is available at no cost on its website. The e-book offers guidance to those who want to get involved in the solar industry: investors, property owners and developers.
  • States available: VERT Solar Finance is available throughout North America.
  • Best for: property owners, developers and investors interested in solar energy.
Mosaic

Based in Oakland, California, Mosaic is a solar financing company that provides solar loans to homeowners and partnerships with solar installers. The company operates in more than 30 states and offers a loan with no money down.

  • PowerSwitch Loan: Mosaic’s PowerSwitch Loan lets you borrow the upfront capital so you can finance a solar energy system with no money down. The interest is simple instead of compounded, meaning that you’re not charged on interest that has already accrued.
  • Mosaic portal: Mosaic’s online platform helps you connect with your Mosaic contractor. The portal allows you to submit information, sign documents and contact customer support.
  • Rolling solar loan: Mosaic has the option to roll your solar loan into your existing mortgage. This requires you to refinance your home and allows you to consolidate your mortgage payments and solar loan payments into one payment.
  • Solar battery: Mosaic’s solar financing comes with an option to finance a solar battery, which cooperates with your electric grid and can use more battery power during peak usage times, when grid electricity is more expensive.
  • States available: AK, AR, AZ, CA, CO, CT, DE, FL, GA, HI, IL, MA, ME, MI, NC, NE, NH, NJ, NM, NY, OH, OR, PA, RI, SC, SD, UT, VA, WA, WY
  • Best for: homeowners who want to be able to connect with their providers directly.
Affordable Solar

Affordable Solar works exclusively with solar contractors to help them with financing, equipment and distribution. Based in Albuquerque, New Mexico, the company works on both domestic and international projects.

  • Financing: Affordable Solar uses GreenSky, a credit and financing company, to help contractors offer solar loans to their customers. GreenSky provides credit limits as high as $65,000.
  • Equipment: With distribution centers across the United States, Affordable Solar sells wholesale solar panels, turnkey solar systems, solar inverters and racking.
  • Elite Installer Program: Affordable Solar’s certification system, the Elite Installer Program, gives contractors the ability to partner with the company and receive benefits such as a line of credit, equipment financing, product training and automatic procurement.
  • Cash flow: Through an online portal, Affordable Solar helps installers finance solar jobs with an unlimited line of credit. The installer sells a job, submits the information through the online portal, receives the equipment from Affordable Solar and documents it for proof.
  • Solar tools: Affordable Solar has many useful tools and links for contractors on its website. The company’s Off-grid Estimator can estimate how much power a home would need to run on purely solar energy, while more technical tools like the Inverter Sizing Guide and the Wire Sizing Charts can help contractors with complex measurements.
  • States available: Affordable Solar is available across the United States and has distribution points in California, New Mexico and Puerto Rico.
  • Best for: contractors and solar businesses who need help with funding and logistics.
REC Solar

In business since 1997, REC Solar is a solar solutions company targeting the agriculture, commercial, enterprise, utility and public sectors. The company offers financing, engineering support, operational support and storage.

  • Financing: REC Solar’s financing options include PPAs (power purchase agreements), leases, cash or loan options. The company’s leases have terms from seven to 10 years, while their PPAs have terms from 20 to 25 years.
  • EPC: REC Solar offers engineering, procurement and construction (EPC) support for large-scale solar projects. It provides support for roof-mounted panels, ground-mounted arrays and carport-mounted systems.
  • Operations and maintenance: REC performs repair, cleaning and monitoring once your system is installed. These services are rendered over the 25-plus-year lifespan of your solar energy system.
  • Energy storage: REC uses solar batteries and system monitoring to ensure that your battery kicks in when grid rates are high, saving you money when energy prices spike.
  • States available: AZ, CA, CO, CT, FL, GA, HI, MA, MD, NC, NJ, NV, NY, OH, OR, PA, PR, TX, UT, VA, VT, WA
  • Best for: businesses installing large-scale solar projects.
Renew Financial

Renew Financial lends to homeowners in California and Florida looking to make home improvements that save energy or water. They offer 100 percent financing on projects that involve solar panels, heating, cooling, windows, doors, roofs and insulation.

  • Multiple renewable energy options: Renew offers financing for solar and wind systems, solar hot water heaters and electric vehicle charging.
  • Energy and water efficiency: Renew’s financing options cover upgrades to new heating and cooling systems, new windows and doors, home insulation, plumbing systems and drought tolerant landscaping systems.
  • Safety and resiliency: Operating in coastal areas, Renew Financial provides financing for severe-weather home improvements such as wind-resistant shingles, storm shutters and storm doors.
  • RenewPACE: Renew Financial’s RenewPACE is a $0-down loan for energy-efficient home improvements. This loan can be paid out through your property taxes over the course of 5-30 years. The amount you can borrow is based on your home’s equity, and the interest rate is fixed.
  • States available: CA, FL
  • Best for: California or Florida homeowners adding renewable energy improvements to their home.
EnergySage

Based in Boston, EnergySage is an online solar financing marketplace. The company pairs you with multiple solar installers who bid for your business, allowing you to choose who you work with.

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Profile picture of Kate Williams, Ph.D.
Kate Williams, Ph.D. ConsumerAffairs Research Team

As a member of the ConsumerAffairs Research Team, Kate Williams, Ph.D. believes everyone deserves easy access to accurate and comprehensive information on products and businesses before they make a purchase. She spends countless hours researching companies and industries before writing buyers guides to make sure consumers have all the information they need to make smart, informed buying decisions.