The homeowner basics of financing solar power for residential real estate

Published

2 years ago

May 21, 2023

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To avoid rising energy costs and benefit from increasing renewable energy incentives and tax breaks, more homeowners may be considering a home solar system. Last year, the growth of residential solar in the U.S. boomed. Even as overall growth of solar installations, including commercial and utility-scale projects, decreased year over year, residential solar projects grew by a “staggering” 40%, to just under six gigawatts, according to the Solar Energy Industries Association. That growth came across a record 700,000 U.S. homeowners who installed solar in 2022.

There are a host of complicated issues in the solar market, including some contentious politics. Battles remain over foreign sourcing of solar energy components and tariffs on imports from China — President Biden recently vetoed a bill that would have re-imposed tariffs and likely driven up costs throughout the solar supply chain. Net metering, a primary way homeowners can be repaid by the grid for generating their own energy, took a big hit in California — the nation’s biggest solar market — last year, and that is expected to lower overall growth of residential projects this year. And lending conditions throughout the credit market are tighter today due to Federal Reserve interest rate hikes, driving up loan rates for solar projects.

Financing may be necessary or at least well worth considering for most homeowners interested in upgraded their home energy with solar. The national average for a 10 kilowatt solar panel installation in 2023 is around $20,000 after taking into account a 30% federal solar tax credit, according to EnergySage, a marketplace that connects consumers with energy companies. Loans have boomed as a way to finance solar, and even as low and in some cases zero-interest rate offers disappear, higher retail utility bills continue to make lending rates reasonable. According to energy consulting firm Wood Mackenzie, the loan segment’s record share of the residential solar market reached roughly 70% of projects in 2022. It won’t repeat that in 2023, but will remain a large part of the solar market.

Starting with the basics is the best way for homeowners to start wrapping their heads around solar power financial decisions. Here are some key things to consider before making the decision to move ahead with a residential project.

Do your research on state-by-state solar costs

“Before you investigate how you are going to pay for it, it’s easy to find out what you might want to buy and what it might cost,” said Joel Rosenberg, a member of the special projects team at Rewiring America, a nonprofit focused on electrifying homes, businesses and communities.

He recommends using EnergySage to find competing solar quotes. This will give homeowners a better idea — beyond nationwide averages — based on real-life factors such as the size of the system. This is important to understand before they start considering how to pay for it, he said.

Seek out local energy financing programs

Once homeowners are ready to dig more into financing options, their state’s energy office and a local electric utility can be good places to start because both may offer solar financing programs.

“They may not be directly involved, but often they can flag things that may be worth looking into,” said Madeline Fleisher, an Ohio-based environmental and energy lawyer who runs a clean-energy website.

Ohio, for example, has a state program that offers a reduced rate on a solar loan with certain lenders.

Get solar loan quotes from multiple lenders

Consumers should seek quotes from three to five sources, being sure to pay careful attention to terms and conditions, said EnergySage CEO Vikram Aggarwal.

Potential lenders can include a homeowner’s local bank, credit union, national bank or a specialized institution known as a green bank that focuses on loans for environmentally friendly projects.

Green banks may have even more robust offerings, Fleisher said. Using a simple Google search for “green bank” and your state may yield options. To find potential lenders, homeowners can also consult broader industry sources such as the Green Bank Network or the Coalition for Green Capital.

Consider solar installation company offers carefully

Solar installers, such as Sunrun and Sunnova, also offer loans.

Most installers offer loans for a duration of 15, 20 or 25 years, while banks may offer short-duration loans at lower interest rates and for lower fees, Aggarwal said. Interest rates can vary widely depending on factors such as the loan amount, duration and the strength of the borrower’s credit. Typical loan amounts are $1,000 to $100,000, and annual percentage rates for people with excellent credit can range from around 6% to about 36%, according to a recent analysis by Nerdwallet.

“Installers are great at installing solar, but they may not be experts at finance or banking,” said Jason MacDuff, president of greenpenny, a virtual and carbon-neutral bank focused on financing sustainable projects.

He said any homeowner considering a loan through an installer should make sure to speak directly to the financer. Homeowners should seek to fully understand the financial arrangement they are entering into, he said. For instance, will it be a fixed or variable rate? What are the upfront financing costs? And what is the projected monthly payment?

It’s also worth noting that installers don’t always mention the fees, so be sure to ask about the installation cost if paying cash versus financing, Aggarwal said. Prepayment fees aren’t likely, but it’s worth asking and confirming in the loan documentation, just to make sure, he said.

Scrutinize fees, terms and conditions on solar debt

Consumers should always ask what fees are associated with the loans being offered, in addition to the interest rate, since fees could amount to thousands of dollars.

Homeowners should also be familiar with other terms, conditions and options that may be available. For example, some loans allow the borrower to amortize once to reduce the amount. To illustrate, if a homeowner takes a $10,000 loan and then receives a tax credit of $3,000, the money can be used to pay the lender and bring down the loan to $7,000. Generally, this option, when available, can be used once within the first 12 to 18 months of the loan, Aggarwal said.

Home equity loans and HELOCs could be a good option for homeowners who have built sufficient equity in their home. These options could also work well for homeowners whose credit doesn’t allow them to qualify for a personal loan with a favorable rate, according to Bankrate.

Be careful about lending risks that can lead to home foreclosure

The last thing any homeowner should do is let a green finance loan lead to foreclosure. That has been a concern for the Federal Trade Commission and the government’s consumer watchdog, the Consumer Financial Protection Bureau. Property Assessed Clean Energy (PACE) loans, secured by a property tax lien on the borrower’s home, have been used over the past decade to finance renewable energy home improvements like solar power and were particularly popular several years ago.

The CFPB has worried about lenders that aren’t operating on the level, and these loans leading borrowers to fall behind on mortgage payments, and to a deterioration in credit worthiness. A new proposal from the CFPB seeks to protect homeowners from “unscrupulous companies” offering “unaffordable loans with exaggerated promises of energy bill savings,” according to a recent statement from CFPB Director Rohit Chopra.

The solar finance market is dominated by a handful of players

While there are many options for loans in the residential solar market, the data shows that total lending volumes are dominated by five players that financed 71% of the entire residential market in 2022, according to Wood Mackenzie. That was similar to 2021’s lending market. GoodLeap (26% of the residential solar market) was No. 1 overall.

Sunrun and Sunnova together captured 79% of the third-party-owned market for home solar. This brings up another key decision for homeowners: should they finance and own the system themselves or lease the rights to their solar energy generation?

Solar leasing is poised to be more popular, but has downsides

Leasing options exist and may be attractive to some homeowners as a way to avoid the upfront costs of equipment and installation. Another benefit is that the homeowner isn’t responsible for maintenance. Leasing to homeowners is expected to become more popular this year, according to Wood Mackenzie, because of additional credits leasing companies can receive under the Inflation Reduction Act. These “adders” beyond the core 30% tax credit make the economics more attractive to companies that lease solar systems to homeowners.

But there are downsides for homeowners.

Leasing is generally more expensive for homeowners and they won’t be eligible for the 30% tax credit, Aggarwal said. Leasing can also present several challenges when homeowners decide to sell their house, so it’s important to weigh the pros and cons carefully, Aggarwal added.

If considering this route, homeowners should be sure to understand the specifics about the lease process, MacDuff said. They should, for example, know how the lease payments compare with their existing utility payment and what the repair process will be if issues arise.

Solar prices continue to drop, so rushing isn’t the right decision

The tax credit that was extended and increased as a result of the Inflation Reduction Act makes the cost of solar installation more palatable for consumers, Rosenberg said. But if it’s still out of reach financially, even with a loan, check back from time to time because prices continue to drop and homeowners have 10 years to qualify for the IRA incentive.

“You can get a quote in 2023 and a quote in 2026 and it might be two-thirds of the cost and you can still get the tax credit,” he said.

Environment

E-quipment highlight: Kubota mini excavator goes from diesel to EV and back

Published

4 hours ago

July 8, 2025

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E-quipment highlight: Kubota mini excavator goes from diesel to EV and back

Kubota highlights retrofit batteries for mini excavators

Japanese equipment giant Kubota brought 22 new or updated machines to the 2025 bauma expo earlier this year, but tucked away in the corners was a new retrofit kit that can help existing customers decarbonize more quickly, and more affordably.

No matter how badly a fleet may want to electrify, harsh economic realities and the greater up-front costs typically associated with battery electric remain high hurdles to overcome, but new retrofit options from major manufacturers are popping up to help lower those obstacles.

The latest equipment maker to put its name on the retrofit list is Kubota, who says its kit can be installed by a trained dealer in a single day.

That’s right! By this time tomorrow, your diesel-powered Kubota KX019 or U27-4 excavator (shown) could be fitted with an 18 or 20 kWh li-ion battery pack and electric drive motors and ready to get to work in a low-noise or low-vibration work environment where emissions are a strict no-no. Think indoor precision demolition or historic archeological excavation.

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Then, if necessary, it can go right back to diesel power.

From diesel to electric and back again

If that sounds familiar, that’s because we’ve talked about a similarly flexible power solution from ZQUIP. The battery packs and diesel engines are much larger in that application, but the basic sales pitch remains the same: electric when it benefits your operation, diesel it doesn’t.

Kubota says its modular retrofit kits is a response to the increasing global demand for sustainable alternatives by focusing on making machinery that’s flexible and repairable enough to be “reusable,” and offer construction fleet managers a longer operational lifespan, superior ROI (return on investment), and lower TCO (total cost of ownership) than the competition.

Kubota’s solution also notably reduces maintenance costs and operational overheads. With no engine and associated components, servicing time and expenses are considerably reduced, saving customers both time and money. Additionally, with electricity costing far less than fossil fuels, it offers a highly economical advantage.

KUBOTA

International Rental News reports that other changes to the excavators include a more modern cab controls with a digital instrument cluster, a 60 mm wider undercarriage for more stability, and an independent travel circuit allows operators to use the boom, dipper, bucket, and auxiliary functions without an impact on tracking performance.

Kubota’s new kit, first shown at last year’s Hillhead exhibition in the UK, will officially be on sale this summer – any day now, in fact – though pricing has yet to be announced.

Electrek’s Take

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If you’re wondering how it is that we’re still talking about bauma 2025 a full quarter after the show wrapped up, then I haven’t done a good enough job of explaining how positively massive the show was. Check out this Quick Charge episode (above) then let us know what you think of Kubota’s modular power kits in the comments.

SOURCE | IMAGES: Kubota, via International Rental News.

If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.

Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.

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Environment

America – it’s a party now! Plus: an electric Honda Ruckus and updated BMW

Published

5 hours ago

July 7, 2025

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America – it's a party now! Plus: an electric Honda Ruckus and updated BMW

Elon Musk isn’t happy about Trump passing the Big Beautiful Bill and killing off the $7,500 EV tax credit – but there’s a lot more bad news for Tesla baked into the BBB. We’ve got all that and more on today’s budget-busting episode of Quick Charge!

We also present ongoing coverage of the 2025 Electrek Formula Sun Grand Prix and dive into some two wheeled reports on the new electric Honda Ruckus e:Zoomer, the latest BMW electric two-wheeler, and more!

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Prefer listening to your podcasts? Audio-only versions of Quick Charge are now available on Apple Podcasts, Spotify, TuneIn, and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.

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Got news? Let us know!
Drop us a line at tips@electrek.co. You can also rate us on Apple Podcasts and Spotify, or recommend us in Overcast to help more people discover the show.

Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.

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Environment

FERC: Solar + wind made up 96% of new US power generating capacity in first third of 2025

Published

7 hours ago

July 7, 2025

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FERC: Solar + wind made up 96% of new US power generating capacity in first third of 2025

Solar and wind accounted for almost 96% of new US electrical generating capacity added in the first third of 2025. In April, solar provided 87% of new capacity, making it the 20th consecutive month solar has taken the lead, according to data belatedly posted on July 1 by the Federal Energy Regulatory Commission (FERC) and reviewed by the SUN DAY Campaign.

Solar’s new generating capacity in April 2025 and YTD

In its latest monthly “Energy Infrastructure Update” report (with data through April 30, 2025), FERC says 50 “units” of solar totaling 2,284 megawatts (MW) were placed into service in April, accounting for 86.7% of all new generating capacity added during the month.

In addition, the 9,451 MW of solar added during the first four months of 2025 was 77.7% of the new generation placed into service.

Solar has now been the largest source of new generating capacity added each month for 20 consecutive months, from September 2023 to April 2025.

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Solar + wind were >95% of new capacity in 1st third of 2025

Between January and April 2025, new wind provided 2,183 MW of capacity additions, accounting for 18.0% of new additions in the first third.

In the same period, the combination of solar and wind was 95.7% of new capacity while natural gas (511 MW) provided just 4.2%; the remaining 0.1% came from oil (11 MW).

Solar + wind are >22% of US utility-scale generating capacity

The installed capacities of solar (11.0%) and wind (11.8%) are now each more than a tenth of the US total. Together, they make up almost one-fourth (22.8%) of the US’s total available installed utility-scale generating capacity.

Moreover, at least 25-30% of US solar capacity is in small-scale (e.g., rooftop) systems that are not reflected in FERC’s data. Including that additional solar capacity would bring the share provided by solar + wind to more than a quarter of the US total.

With the inclusion of hydropower (7.7%), biomass (1.1%), and geothermal (0.3%), renewables currently claim a 31.8% share of total US utility-scale generating capacity. If small-scale solar capacity is included, renewables are now about one-third of total US generating capacity.

Solar is on track to become No. 2 source of US generating capacity

FERC reports that net “high probability” additions of solar between May 2025 and April 2028 total 90,158 MW – an amount almost four times the forecast net “high probability” additions for wind (22,793 MW), the second-fastest growing resource. Notably, both three-year projections are higher than those provided just a month earlier.

FERC also foresees net growth for hydropower (596 MW) and geothermal (92 MW) but a decrease of 123 MW in biomass capacity.

Taken together, the net new “high probability” capacity additions by all renewable energy sources over the next three years – i.e., the bulk of the Trump administration’s remaining time in office – would total 113,516 MW.

FERC doesn’t include any nuclear capacity in its three-year forecast, while coal and oil are projected to contract by 24,373 MW and 1,915 MW, respectively. Natural gas capacity would expand by 5,730 MW.

Thus, adjusting for the different capacity factors of gas (59.7%), wind (34.3%), and utility-scale solar (23.4%), electricity generated by the projected new solar capacity to be added in the coming three years should be at least six times greater than that produced by the new natural gas capacity, while the electrical output by new wind capacity would be more than double that by gas.

If FERC’s current “high probability” additions materialize, by May 1, 2028, solar will account for one-sixth (16.6%) of US installed utility-scale generating capacity. Wind would provide an additional one-eighth (12.6%) of the total. That would make each greater than coal (12.2%) and substantially more than nuclear power or hydropower (7.3% and 7.2%, respectively).

In fact, assuming current growth rates continue, the installed capacity of utility-scale solar is likely to surpass that of either coal or wind within two years, placing solar in second place for installed generating capacity, behind only natural gas.

Renewables + small-scale solar may overtake natural gas within 3 years

The mix of all utility-scale (ie, >1 MW) renewables is now adding about two percentage points each year to its share of generating capacity. At that pace, by May 1, 2028, renewables would account for 37.7% of total available installed utility-scale generating capacity – rapidly approaching that of natural gas (40.1%). Solar and wind would constitute more than three-quarters of installed renewable energy capacity. If those trend lines continue, utility-scale renewable energy capacity should surpass that of natural gas in 2029 or sooner.

However, as noted, FERC’s data do not account for the capacity of small-scale solar systems. If that’s factored in, within three years, total US solar capacity could exceed 300 GW. In turn, the mix of all renewables would then be about 40% of total installed capacity while the share of natural gas would drop to about 38%.

Moreover, FERC reports that there may actually be as much as 224,426 MW of net new solar additions in the current three-year pipeline in addition to 69,530 MW of new wind, 9,072 MW of new hydropower, 202 MW of new geothermal, and 39 MW of new biomass. By contrast, net new natural gas capacity potentially in the three-year pipeline totals just 26,818 MW. Consequently, renewables’ share could be even greater by mid-spring 2028.

“The Trump Administration’s ‘Big, Beautiful Bill’ … poses a clear threat to solar and wind in the years to come,” noted the SUN DAY Campaign’s executive director, Ken Bossong. “Nonetheless, FERC’s latest data and forecasts suggest cleaner and lower-cost renewable energy sources may still dominate and surpass nuclear power, coal, and natural gas.”

To limit power outages and make your home more resilient, consider going solar with a battery storage system. In order to find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and you share your phone number with them.

Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*

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