Personal Loan, Solar Loan, Lease or Cash: How to Pay for Solar Panels or a Home Battery
A solar salesperson usually brings the financing with them. By the time you see a monthly payment on a tablet, the choice between cash, a loan and a lease has often been made for you.
This guide pulls those choices apart: who owns the equipment, what happened to the federal tax credit, how "dealer fees" work, and what a personal loan costs when you arrange it yourself.
Key takeaways
- Cash, a personal loan and an installer's solar loan leave you owning the system. A lease or a power purchase agreement (PPA) does not.
- The IRS says the residential clean energy credit (IRC 25D) is not allowed for expenditures made after December 31, 2025, and an expenditure counts as made when installation is completed.
- The CFPB found that some solar loans carry hidden fees that "can increase the loan principal by 30 percent or more above the cash price."
- Get the cash price in writing first. Every financing offer should be measured against it.
This guide is one of our financing guides organized by need.
What are the ways to pay for solar panels or a battery?
The FTC frames the choice as "buying a system, leasing a system, or signing an agreement to buy solar power." Buying can be done with cash or with a loan.
| How you pay | Who owns the system | Lien on the equipment? | What to check first |
|---|---|---|---|
| Cash | You | No | The written cash price and what it includes |
| Unsecured personal loan | You | No collateral on an unsecured loan | APR, origination fee, total of payments |
| Solar-specific loan through the installer | You | Some are secured, often by a lien on the panels | Loan principal compared with the cash price |
| Lease | The leasing company | You do not own it | Term, payment increases, buyout and transfer terms |
| Power purchase agreement (PPA) | The PPA provider | You do not own it | Price per kilowatt-hour and any yearly escalator |
The Department of Energy's homeowner's guide says: "In general, a purchased solar system can be installed at a lower total cost" than one installed using a solar loan, lease, or PPA.
The CFPB's 2024 report describes solar-specific loans as coming from "a lender who specializes in solar finance," often "offered with the panel installation contract," and lists "general-purpose unsecured installment loans" among the alternatives. Treasury's consumer guide is direct: "You are not required to use the financing offered by the salesperson."
Is the federal solar and battery tax credit still available?
Not for new installations. The IRS page for the Residential Clean Energy Credit, checked October 19, 2026, says the credit "equals 30% of the costs of new, qualified clean energy property for your home installed anytime from 2022 through December 31, 2025," and "is not available for any property placed in service after December 31, 2025." It covered solar panels and, beginning in 2023, battery storage with "a capacity of at least 3 kilowatt hours."
The IRS fact sheet on the 2025 law (FS-2025-05) says the credit "will not be allowed for any expenditures made after December 31, 2025." Paying early does not help: an expenditure "is treated as made when the original installation of the item is completed," so a system paid for in 2025 but finished in 2026 does not qualify.
- Only the owner could ever claim it. The FTC says that with a lease or PPA "you don't own the system," you "aren't eligible for tax credits or financial incentives," and "those go to the system's owner." Treasury's lease guide calls the claim that a lessee can use tax credits to cut the cost "a lie."
- Older material is out of date. The CFPB's 2024 report, the DOE guide, the FTC's solar page and Treasury's buyer guide all describe federal tax credits under earlier law. Rely on IRS.gov for the current rule.
Treasury notes that "some states have incentive programs or rebates." Ask whether any incentive in a quote is open today, and who keeps it.
How do dealer fees work in an installer's solar loan?
In its Issue Spotlight on solar financing (August 7, 2024), the CFPB reported that many solar-specific lenders "assess hidden fees that increase the amount of the loan principal above the cash price." These go by names such as "platform fees" and "dealer fees," and the CFPB said they "typically range from between 10 to 30 percent of the cash price but can exceed 50 percent."
The CFPB's own example is a project with a $30,000 cash price and a $9,000 hidden fee, for a $39,000 loan principal. "The lender would remit the $30,000 cash price to the installer and keep the $9,000 hidden fee." Stated APRs on these loans "typically range from 1 to 7 percent," the report says, but "those APRs often do not include fees that increase the loan principal."
Here is what that does to a payment, using a rate and term we assumed for illustration, both inside the ranges the CFPB describes.
| Amount financed | Stated APR | Term | Monthly payment | Total of payments |
|---|---|---|---|---|
| $39,000 (cash price plus fee) | 3.99% | 240 months | $236.13 | $56,671.20 |
| $30,000 (cash price only) | 3.99% | 240 months | $181.64 | $43,593.60 |
Measured against the $30,000 the installer actually receives, a $236.13 payment for 240 months works out to a rate of roughly 7.2%, not 3.99%. The loan principal compared with the cash price tells you more than the advertised rate.
The CFPB flagged a second trap. It is "commonplace for solar-specific loans to re-amortize at a higher monthly payment amount at the 19th month" unless you prepay, frequently "30 percent of the loan principal," the size of the expected tax credit. If a 2026 offer still counts on a federal credit to fund that prepayment, ask the seller to name the credit in writing.
The report does not directly cover add-on batteries, but the same check works for a battery quote.
How does a personal loan for solar compare?
With an unsecured personal loan, you borrow from a lender you choose, pay the installer the cash price, and own the system, with no lien on the equipment from the loan. The trade-off is price: the CFPB notes that secured solar loans "usually come with lower APRs than comparable unsecured loans."
Personal loans have fees too. The CFPB lists origination and documentation fees among common charges and says to "check the required loan disclosures." If an origination fee comes out of your proceeds, you may need to borrow more to cover the cash price; the origination fee calculator shows how much.
Worked example. Use the amount on your written quote. This example uses $15,000 only to show the math, not as an estimate of what a system costs.
- Amount borrowed: $15,000
- APR: 12.00% (an assumption, not an offer)
- Term: 60 months
- Monthly payment: $333.67
- Total of payments: $20,020.20, of which $5,020.20 is interest
Totals use the rounded payment times 60, so the last payment may differ by a few cents. Try your own numbers in the personal loan payment calculator.
Representative example. For a $5,000 loan at a 10% APR over 36 months, the monthly repayment would be $161.34. Over the term, the total repayment would amount to $5,808.24, with $808.24 in interest. The loan terms range from 6 months to 12 years, with APRs between 5.99% and 35.99%. The exact rate you receive depends on factors like your creditworthiness, loan size, and repayment schedule. Better rates are typically offered to those with excellent credit.
Before you accept an installer's loan, get at least one outside quote. Our guide to shopping personal loan rates explains how to compare offers side by side.
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What should you know before leasing panels or a battery?
A lease or PPA can mean little or nothing up front, but you are renting. The CFPB says typical solar leases last 15 to 20 years with no down payment, and in many cases payments "increase each year by a predetermined amount." PPA escalators "range from 1 to 5 percent." The FTC warns it "may be difficult and expensive" to end a lease early, and says the contract should state who gets the tax credits and other incentives, whether and when payments rise, any early termination fees, and what it costs to renew, buy or remove the system at the end.
The same trade applies to a home battery offered on a lease. The provider owns the equipment and the incentives tied to it, and you make monthly payments, often for many years, without owning the battery at the end unless you buy it out. Home Battery Report walks through escalators, buyout terms and selling a home with a battery contract in its guide to leasing a home battery vs buying it.
What happens if you sell your home?
For a lease or PPA, the FTC suggests asking whether you can transfer the contract to the buyer, whether you must notify the company first, and whether the buyer "will have to meet credit requirements or pay any fees" to take it over.
For a loan, Treasury's buyer guide asks: "Is a UCC or other lien placed on my home or solar energy system?" It warns such a lien "can affect whether a prospective buyer will want to purchase your home," and the lender might require you to repay the loan or the buyer to take it on. The CFPB report says some solar loans are "secured by collateral (typically with a lien on the panels themselves)."
What should you ask before you sign?
Get every answer in writing. Treasury says to be careful signing on a seller's tablet, and that the right to cancel lasts "at least three days from the date it is signed."
- What is the cash price, and what does it include?
- If I finance, what is the loan principal, and is any lender or dealer fee included?
- Does the payment ever change, including a re-amortization if I do not prepay?
- Which tax credits or rebates are built into this quote, and am I eligible today?
- For a lease or PPA: what are the term, the escalator, and the buyout and transfer terms?
- Is a lien filed on the equipment or the home?
If a new roof has to come first, our roof replacement financing guide covers that side.
Common questions
Can I claim the 30% federal credit for solar or a battery installed in 2026?
No. The IRS says the 25D credit is not allowed for expenditures made after December 31, 2025, and an expenditure counts as made when installation is completed, even if you paid in 2025.
Does a lease or PPA give me the tax credit?
No. The FTC says incentives go to the system's owner, and with a lease or PPA you do not own the system.
Is a personal loan cheaper than an installer's solar loan?
It depends on the offers. A solar-specific loan may show a lower stated rate, but the CFPB found that many solar lenders add fees to the principal. Compare the total of payments on each offer against the same cash price.
Sources
- Internal Revenue Service, "Residential Clean Energy Credit," accessed October 19, 2026.
- Internal Revenue Service, "FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21" (FS-2025-05, August 21, 2025), accessed October 19, 2026.
- Consumer Financial Protection Bureau, "Issue Spotlight: Solar Financing" (August 7, 2024), accessed October 19, 2026.
- Consumer Financial Protection Bureau, "Do personal installment loans have fees?," accessed October 19, 2026.
- Federal Trade Commission, "Solar Power for Your Home," accessed October 19, 2026.
- US Department of the Treasury, "Before You Purchase and Finance Solar Panels," accessed October 19, 2026.
- US Department of the Treasury, "Before You Sign a Solar Lease Agreement," accessed October 19, 2026.
- US Department of Energy, "Homeowner's Guide to Solar," accessed October 19, 2026.
- Internal Revenue Service, “FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (FS-2025-05)”
- US Department of Energy, “Homeowner's Guide to Solar”
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