Putting solar panels on your roof is a great way to insulate yourself from rising electricity costs. It may even lower your utility bills right away. Utility companies have raised electric rates between 6% and 24% per year since 2021 in nearly every state in the country. And there doesn’t seem to be any end in sight with some utility companies already announcing rate hikes for 2025. If you can pay cash for your solar system, you will save the most money by avoiding finance costs. However, even if you can’t pay cash or choose not to, there are a few different ways to go about financing for solar.

The most traditional way to obtain financing for solar if you don’t pay cash is through a loan from a finance company that specializes in solar financing. Companies like Mosaic, GoodLeap, and others offer many different programs. However, much if not all the savings that come from solar could end up being absorbed by the higher interest rates currently available. These companies will lower the interest rate down to as low as 3.99% but it will cost in the form of what is known as dealer fees. Dealer fees are paid by the solar installation company to ‘buy down’ the interest rate and lower the initial monthly payments. The dealer fees are then added to the purchase price of the solar system. If after adding the dealer fees, the monthly payment is less than what a homeowner currently pays for electricity, then it’s still a viable way to go solar.

Leases and PPA’s

Because of the higher prevailing interest rates, homeowners may want to consider a lease or Power Purchase Agreement (PPA). Both typically provide a lower monthly payment and more short-term savings than a loan. Although homeowners won’t own their solar system with a lease or PPA, they also don’t need to worry about filing for the federal tax credit and other issues like maintenance. The tax credit is taken by the lease or PPA company which helps lower the payment. Companies like Sunrun and Everbright provide these types of financing options.

Financing for Solar – What is the Minimum Credit Score?

Regardless of whether you get a loan, or opt for a lease or a PPA, the minimum credit score is typically 650. The good news is that to find out if you qualify for any of these finance options it does not require a hard pull of your credit report or show up as an inquiry. These companies do a ‘soft pull’ and specifically look at your credit score. If you have above a 650 credit score you should qualify.

Looking for the Best Residential Solar Pricing and Multiple Finance Options?

There is a company that works with 4 out of the top 5 residential solar installation companies in the United States. REACH Solar covers 40+ states and Puerto Rico and offers homeowners the ability to purchase, lease, or utilize a PPA. In addition, they offer the lowest solar pricing in the country. Their slogan is, ‘Revolutionizing Solar in Favor of Homeowners’. To learn more visit REACH Solar.