Solar Lending Options for Homeowners December 2023
Looking for solar lending providers? GoodLeap, Sunlight, Sunnova, HomeRun, ClimateFirst, and Dividend are among the most prolific names in solar lending options.
You need to know which solar loan company is really going to suit your wallet and savings plan the best, and knowing some of their different requirements is the first and often the most difficult part of making the switch to solar energy.
Expert Solar has prepared this chart for you to get a fast glimpse at how some of the different solar loan companies work, however, it is important to keep in mind that knowing the qualifiers is only the first part of choosing the perfect solar loan for you.
What is the Minimum Credit Score Required to go Solar?
The minimum credit score requirements for getting a solar loan is 580, however, this is not true for all solar lenders, as not all solar lenders have the same policies in place. There are also government loans for homeowners, however, this is largely based on your home address, and may depend on whether or not your neighborhood is currently supported by the government loan options available.
Solar Financing Payment Methods
There are 3 ways to finance a solar installation project.
Full Cash Payments
The most lucrative and money-saving method to paying for your solar panels is to pay in full, outright. The savings start as soon as the system is turned on.
SOLAR LOAN
The most common way solar panels are financed, which offers flexible payment options for various wallet types, that typically introduce a stair-step progression of savings from the day the system is turned on.
LEASING/PPA's
The least lucrative, but situationally beneficial. Leasing agreements are similar to renting a car. You don’t own the panels on your home, but you do get to use them and the electricity they generate. You won’t get any of the Federal Tax Credit. The Power Purchase Agreement is essentially having solar panels on your home, but rather than paying the loan, you will pay the owner of those solar panels a fixed price per kilowatt-hour. Expert Solar does not offer these options at this time.
Solar Lender Requirements Side-by-Side Comparison Chart
| Solar Lender | Homeowner | Good Credit | Minimum Credit Score (600) | Minimum Credit Score (620) | Minimum Credit Score (640) | Home Equity (20%) | Home Equity (25%) | Home Equity (30%) | Roof in Good Condition | Strong Financial History |
|---|---|---|---|---|---|---|---|---|---|---|
| GoodLeap | ✓ | ✓ | ✓ | ✓ | ||||||
| Sunlight | ✓ | ✓ | ✓ | ✓ | ||||||
| Sunnova | ✓ | ✓ | ||||||||
| HomeRun | ✓ | ✓ | ✓ | ✓ | ||||||
| ClimateFirst | ✓ | ✓ | ✓ | |||||||
| Dividend | ✓ | ✓ | ✓ | ✓ |
Compare Solar Lenders
These solar lenders are available through Expert Solar, and are recognized as some of the finest solar lending options available on the market today. These lenders are ready to work with you now!
Solar Lender State Coverage
| Solar Lender | States Operated In |
|---|---|
| GoodLeap | All 50 states and Washington, D.C. |
| Sunlight | All 50 states and Washington, D.C. |
| Sunnova | All 50 states and Washington, D.C. |
| HomeRun | Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming |
| ClimateFirst | All 50 states and Washington, D.C. |
| Dividend | Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming |
Understanding the Solar Lender Comparison Chart
Homeownership
All of the solar lenders on our chart require that you be a homeowner. This means that you must own the property where you plan to install solar panels. This rule is universal for permanent solar panel installations.
Credit Score
Most of the solar lenders listed in the comparison chart require that you have good credit. This means that you have a history of making payments on time and your credit score is above a certain threshold. The minimum credit score requirements vary by lender:
- GoodLeap: 640
- Sunlight: 600
- HomeRun: 620
- Dividend: 640
Home Equity
Some of the solar lenders listed in the comparison chart require that you have a certain amount of equity in your home. This means that the value of your home is greater than the amount of money you owe on your mortgage. The minimum home equity requirements vary by lender:
- GoodLeap: 30%
- Sunlight: 20%
- HomeRun: 25%
- Dividend: 30%
Roof Condition
Sunnova is the only solar lender listed in the table that requires that your roof be in good condition. This means that your roof should not be too old, damaged, or have any leaks.
Strong Financial History
ClimateFirst is the only solar lender listed on our comparison chart that requires that you have a strong financial history. This means that you have a good credit score and a history of making payments on time.
Understanding the Solar Lender Comparison Chart
Homeownership
All of the solar lenders on our chart require that you be a homeowner. This means that you must own the property where you plan to install solar panels. This rule is universal for permanent solar panel installations.
Credit Score
Most of the solar lenders listed in the comparison chart require that you have good credit. This means that you have a history of making payments on time and your credit score is above a certain threshold. The minimum credit score requirements vary by lender:
- GoodLeap: 640
- Sunlight: 600
- HomeRun: 620
- Dividend: 640
Home Equity
Some of the solar lenders listed in the comparison chart require that you have a certain amount of equity in your home. This means that the value of your home is greater than the amount of money you owe on your mortgage. The minimum home equity requirements vary by lender:
- GoodLeap: 30%
- Sunlight: 20%
- HomeRun: 25%
- Dividend: 30%
Roof Condition
Sunnova is the only solar lender listed in the table that requires that your roof be in good condition. This means that your roof should not be too old, damaged, or have any leaks.
Strong Financial History
ClimateFirst is the only solar lender listed on our comparison chart that requires that you have a strong financial history. This means that you have a good credit score and a history of making payments on time.
How Your Solar Loan is Calculated
1. Loan amount: The loan amount is the total cost of your solar panels, minus any applicable rebates or incentives.
2. Interest rate: The interest rate is the percentage of the loan amount that you will pay in interest over the life of the loan. Interest rates are typically higher for solar loans than for other types of loans, such as mortgages or car loans. This is because solar loans are considered to be riskier investments for lenders.
3. Loan term: The loan term is the length of the loan. Solar loan terms typically range from 5 to 25 years. The longer the loan term, the lower your monthly payments will be, but you will end up paying more in interest over the life of the loan.
4. Credit score: Your credit score is a major factor in determining the interest rate you will qualify for on a solar loan. Borrowers with good credit scores will typically qualify for lower interest rates than borrowers with poor credit scores.
5. Home equity: Your home equity is also a factor in determining the interest rate you will qualify for on a solar loan. Borrowers with more home equity will typically qualify for lower interest rates than borrowers with less home equity.
6. Down payment: The down payment is a percentage of the total cost of your solar panels that you will pay upfront. The larger your down payment, the lower your loan amount will be, and the lower your monthly payments will be.
7. Closing costs: Closing costs are the fees that you will pay to the lender to process your loan. Closing costs typically range from 1% to 3% of the loan amount.
Here is an example of how to calculate the monthly payment on a solar loan:
- Loan amount: $20,000
- Interest rate: 5%
- Loan term: 10 years
Monthly payment = (Loan amount * Interest rate) / (1 - (1 + Interest rate) ^ (-Loan term * 12))
Monthly payment = ($20,000 * 0.05) / (1 - (1 + 0.05) ^ (-10 * 12))
Monthly payment = $206.71
This is just an example. Your true monthly payment will vary depending on your circumstances, which will be able to be gone over with one of our Experts to ensure you get the best results for you.
Our team has access to the Solar Loan calculators that will give you the closest to an accurate representation of what your solar loan could look like.
