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How to Finance a Home or Business Solar Power System

Increased demand for renewable energy sources and government incentives backing green energy has led to increased business for many solar power installers. What was once an expensive home or business upgrade, can now save you money every month. With the many financing options available, such as low interest loans, rebates, and tax breaks, the monthly payment on a loan to install solar power will often be lower than your current monthly utility bill.

Bank Loans

A traditional bank loan is a viable and easy option for financing your new home solar power system. If you have enough equity in your home, you may qualify to take out a home equity line of credit or a second mortgage. Typically, banks do not require that the loan money be spent on any particular purchase making you free to use the loan on installing solar panels. You can also ask if your bank has loan programs specifically for green energy upgrades. Such loans will become more common as green energy for homes become more common.

Solar Panel Installer Loans

When getting an initial estimate for the cost of solar panels for your home, ask the installer if their company offers loans. Some solar power installation companies do finance the cost of the installation for their clients. The interest rates from the installing company may not be the most competitive however.

Utility Company

Check the website of your utility company. Most do have green energy loan programs, especially for solar energy for both home and businesses. The company may also offer rebates that would cover a portion of the installation cost that you do not have to repay.

USDA Rural Development Loans and Grants

The USDA, though its Rural Development department, offers several loans and grants for rural businesses to develop and install green energy. For example, the Rural Energy for America Program Guaranteed Loan helps rural commercial property owners finance green energy projects such as solar power. To find out more and apply for the loan speak with your lender or contact your local USDA Rural Development office. 

State Grants and Tax Incentives

The Database of State Incentives for Renewables & Efficiency (DSIREUSA.org) website maintains a searchable database of all current government and utility programs to help with financing energy efficient projects. By clicking on your state, you’ll be given a detailed list of all the state grants, tax credits and deductions, state loan options, state rebate programs, and utility based programs in your state for green energy improvements.

Federal Tax Incentives

Until December 31, 2016, the installation of most green energy systems, including a solar power system, can qualify you for a 30 percent federal tax credit. This can be a significant savings on your taxes owed. Speak with your tax advisor to find out if you would qualify for this tax credit.

In some regions, such as the southwest, you can rely solely on your solar power system for all of your electricity. The key to making it affordable is to combine low interest loans, local rebates, and government tax incentives. You can also ask your installer for more information. To help drive business, solar power installers are usually very familiar with all the financing options available to you.


Energy.gov: Consumer Energy Tax Incentives

USDA Rural Development: Rural Energy for America Program Guaranteed Loan Program (REAP LOAN)

Database of State Incentives for Renewables and Efficiency





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