Solar Financing Options for People With Average Credit Scores

With an average credit score, you can usually still finance solar. The real question is which structure keeps the total cost reasonable. A fair-to-good score tends to qualify you for a solar loan or a lease or power purchase agreement (PPA), but at a higher interest rate or with more fees than top-tier borrowers see. Your best option depends on whether you want to own the system, how long you will stay in the home, and whether you can offer collateral such as home equity.

One more thing changed the math for 2026: the federal homeowner solar tax credit (Section 25D) ended for systems completed after December 31, 2025, under the One Big Beautiful Bill Act. A loan no longer comes with that credit to offset its cost. This guide explains how each financing route works, where each one costs more than it first appears, and how to compare offers using your own numbers.

Last updated: October 2026. Tax rules, incentives, and lender terms change often, so confirm current details with official sources and your lender before signing.

The key factors

• Rate and fees, not the monthly payment alone. A low payment can hide a long term, a built-in dealer fee, or a deferred-interest promotion.
• Ownership. Loans and cash purchases make you the owner. Leases and PPAs keep the installer or a financing partner as owner.
• Collateral. Secured options (home equity loans, HELOCs) can price better than unsecured loans for average credit, but they put your home at risk if you cannot repay.
• Time in the home. A financing contract that is hard to transfer can complicate a sale.
• Your actual electricity savings. Financing only works if the bill reduction is realistic for your roof, usage, and local utility rules.

What "average credit" means to a solar lender

Credit score bands differ by scoring model, but on a FICO-style scale the middle of the range roughly spans the upper 600s into the low 700s, and lenders set their own cutoffs. An average score rarely means a denial. It usually means you are priced for moderate risk.

That pricing shows up in three places:

• Interest rate. Lenders charge more when the statistical chance of default is higher.
• Fees. Some installer-arranged loans include a fee built into the loan balance. A borrower with a stronger score may be offered a lower fee, or none.
• Terms and conditions. You may be asked for a down payment, a co-applicant, or security such as a lien on the home, particularly for larger systems.

Your score is also not the only input. Lenders commonly look at income, existing debt payments relative to income, employment history, and, for secured products, how much equity you hold. Two people with the same score can receive different offers.

What changed for 2026

For systems completed through December 31, 2025, homeowners could claim a 30% federal credit on eligible costs, and many solar loans were designed around that credit. For homeowner-owned systems completed after that date, the credit no longer applies. Credit already earned for a qualifying earlier system can still be carried forward under the rules, so ask a tax professional if that describes you.

The business-side credit (Section 48E) remains available to companies that own qualifying solar systems, including leased or PPA systems on residential roofs, according to industry summaries of the law. A company in that position may pass part of the value through in lower lease or PPA pricing. How much, if any, depends on the company and the contract, so treat that as something to ask about, not something to assume.

The practical effect: if you buy with a loan in 2026, you are comparing the loan against your utility bill alone, with no federal credit softening the cost. That makes the interest rate, system price, and realistic savings matter more than they did in earlier years. State, local, and utility incentives still exist in some places and are worth checking separately.

The main options compared

Availability, approval standards, and pricing vary by lender, state, and company. The table describes general patterns, not guarantees.

Loans: you own it, you carry the interest

With a loan, you buy the system and repay the lender. Ownership matters because the savings on your electric bill are yours for the system's life, and a system you own is generally easier to explain when selling the home than a lease or PPA. The cost is interest, so the rate is the lever to watch. For average credit, a quote from a credit union or your own bank is a useful benchmark before you accept the installer's financing, which is sometimes more convenient than it is cheap.

Home equity: lower rate, higher stakes

A home equity loan or line of credit can offer a lower rate than an unsecured loan because the lender holds the home as security. The trade-off is straightforward: if you cannot make payments, the home is at risk. A HELOC often has a variable rate, which means the payment can rise. This route can make sense for someone with stable income and meaningful equity, and less sense for someone whose budget is already tight.

Leases and PPAs: lower barrier, less ownership

In a lease, you pay a set amount, usually monthly, to use a system someone else owns. In a PPA, you pay for the electricity the system produces. Both can reduce upfront cost, and approval standards are often less demanding than for a large loan, though this varies by company. The cost of that convenience is control: you typically do not own the equipment, contracts can run for many years, and payment or rate escalators can erode the savings over time. A sale of the home generally requires the buyer to take over the agreement or the contract to be bought out, so read the transfer terms before signing.

PACE: a special case

Property Assessed Clean Energy (PACE) programs, available only in some places, finance improvements and collect repayment through the property tax bill. Because approval can rely more on home equity and tax payment history than on credit score, PACE sometimes remains open to people who are declined elsewhere. The costs to examine closely are the rate, the fees, and how the repayment obligation affects a future sale or refinance, since it is attached to the property.

How to choose between them

Work through these questions in order. Each one narrows the field.

1. Will you stay in the home for the length of the financing? If a move is likely within a few years, a long contract or a lien that follows the property becomes a larger risk.
2. Do you want to own the system? If yes, focus on loans and home equity. If you mainly want lower bills with minimal responsibility, leases and PPAs become relevant.
3. Can you comfortably carry the payment if your savings come in lower than projected? Compare the monthly payment to a conservative savings estimate, not the sales estimate.
4. Are you willing to put your home up as collateral? If not, remove home equity products from the list.
5. What is the total cost, not just the payment? Add up everything you would pay over the full term, including fees and any escalators, and compare it to the same-period electricity bill you would otherwise pay.

An illustrative comparison

The following is an illustrative example with made-up numbers, not real rates or market data. Imagine two borrowers financing the same system with the same payment term. One has a top-tier score and the other has an average score. The second borrower may be offered a higher rate and a larger fee, so their total repayment is higher even though the system and savings are identical. The size of that gap is exactly what you can test in the tool below by changing the rate and fee fields.

Costs that are easy to miss

• Built-in fees. Some installer-arranged loans add a fee to the loan balance. The advertised rate may look low while the effective cost is higher. Ask for the total amount financed and compare it to the cash price.
• Deferred-interest or "same as cash" promotions. If a promotion requires paying off the balance by a set date, missing it can trigger interest back to the start, or a higher payment. Ask exactly what happens at the end of the promotional period.
• Payment escalators. Many leases and PPAs raise payments or rates annually. A deal that looks cheaper than your utility bill in year one can narrow over time, especially if utility rates rise more slowly than the escalator.
• Liens and filings. Some financing agreements involve a filing against the property or equipment. This can matter when you sell or refinance, so ask what is recorded and how it is released.
• Transfer and buyout terms. Find out what happens if you sell, including whether a buyer must qualify to assume the contract, and what a buyout would cost.
• Roof and maintenance costs. If your roof needs repair or replacement soon, removing and reinstalling panels later is an additional cost to price in, and responsibility for it differs between ownership and lease models.
• Savings that depend on your utility's rules. The value of the electricity you generate depends on how your utility credits exported power, which varies by location and can change.

Try it: estimate your monthly numbers

This calculator estimates the monthly payment and total cost of a solar loan, then compares the payment to the monthly electricity savings you expect. The starting values are editable examples, not real quotes or market data. Replace them with figures from your own offers and your own electric bills.

How to get better terms without a perfect score

• Prequalify with soft inquiries first. Many lenders let you see estimated terms without a hard credit pull. Confirm which kind of inquiry a lender uses before you apply.
• Compare at least three offers. Include your bank or a credit union alongside the installer's financing. Scoring models commonly treat several applications for the same type of loan within a short period as a single inquiry, but the window varies, so ask or check before spreading applications over weeks.
• Check your credit reports for errors. In the United States you can request free reports through the official site AnnualCreditReport.com. Disputing a genuine error can move a score before you apply.
• Lower revolving balances. Credit card utilization is a common driver of scores, and paying balances down before applying can help.
• Consider a larger down payment or a co-applicant. Either can reduce the lender's risk, which may improve the rate or the approval odds. A co-applicant takes on the same legal responsibility for the debt, so that is a serious step.
• Right-size the system. A smaller system that matches your actual usage costs less to finance than one sized on an optimistic estimate.

When financing solar does not make sense

• Your roof needs replacement soon. Replacing it after panels are installed can mean paying to remove and reinstall them.
• You may move soon. Short time horizons make payback harder and sale logistics more complicated.
• Your electricity use is low. If your bills are small, there may be little savings to offset a monthly payment.
• Your roof is heavily shaded or poorly oriented. Lower production means lower savings than a general estimate suggests.
• Your budget has no slack. If the payment would strain you even in a good month, a secured loan or long contract adds risk, not relief.
• The offer depends on pressure. Be cautious with deals that require a decision on the spot, avoid showing the full cost, or will not provide written terms to review.

This also applies if your score sits below the average range. Offers may be limited or expensive, and it can be worth waiting, improving your credit profile, and revisiting the decision rather than accepting the first available terms.

Common questions

Can I get solar financing with no credit check?

Some products advertise light or alternative review, such as certain leases, PPAs, or programs that rely on property data. Terms still apply, and fewer credit requirements often mean higher cost somewhere else, so compare the total price carefully.

Does shopping around hurt my credit score?

Soft inquiries used for prequalification generally do not affect your score. Hard inquiries can have a small effect, and scoring models often group several loan inquiries made in a short window. Ask each lender which type of inquiry it uses.

Is a lease easier to qualify for than a loan?

Often the review is lighter, but it varies by company and contract. Easier qualification does not mean cheaper, because you give up ownership and may face escalating payments.

Should I take the installer's financing?

It may be convenient, and sometimes competitive, but it is worth comparing against an outside quote. Installer financing can include fees built into the balance, so compare the total amount financed, the rate, and the total repayment.

How to think about it

Start with the decision that is hardest to reverse: whether to put your home at risk or sign a long contract. Then compare options on total cost over the full term against the electricity bill you would otherwise pay, using a conservative savings estimate. Run your own numbers in the tool, change the rate and fee to see how sensitive the result is, and request written terms from at least three sources. If the numbers only work under optimistic assumptions, treat that as information: the project may need a smaller system, a better rate, or more time.

This article is general information, not financial, tax, or legal advice. For a decision about your own finances or taxes, consult a qualified professional and read every contract carefully before signing.

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