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Solar energy is a great way for homeowners to curb their dependence on traditional utilities, slashing or even eliminating monthly electric bills and lessening their environmental impact. For those who live in the Sun Belt, solar power can be especially advantageous. As such, it should come as no surprise that Arizona is one of the top states for solar installation.

In fact, data from the Solar Energy Industries Association reveals that Arizona ranks No. 5 in the nation for total solar installations. The question is, what are the top cities for solar in Arizona? In this article, we'll present our comprehensive rankings.

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As solar energy becomes increasingly popular for residential use, you've probably had a few neighbors install solar panels and may even be thinking of getting a system for your own home. But before adopting this technology, you may be wondering: What are solar panels made of, and how are they made?

Many people simply accept that solar panels work and that's all we need to know about them, but for the scientifically and technologically curious, each individual solar panel contains a world of interesting components and materials. Keep reading to learn more about what actually makes up a solar panel.

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Many homeowners can benefit from installing solar panels, harnessing the sun's energy to help reduce or even eliminate their dependence on traditional utilities. Although solar panels can be expensive, solar loans make residential systems more accessible to homeowners.

Indeed, if you live in an area that gets consistent year-round exposure to the sun, solar panels can be an effective way to lower your home's energy costs while minimizing your environmental footprint. The biggest obstacle to solar adoption is the initial cost of solar panels.

All in, solar panel installation costs typically range from $10,000 to $35,000. In this article, we'll explain how solar loans can make that initial investment much easier to handle.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

Solar Loan Basics

So, how do solar loans work, exactly? Well, they're similar to home improvement loans, or any other type of purchase loan: They enable you to buy a residential solar system and pay it off over time.

There are plenty of solar loan options to choose from. For example, to finance solar panels, you can typically choose from any of the following:

  • An unsecured personal loan
  • A home equity loan or line of credit
  • In-house financing through your solar installation company

For the most part, the terms and conditions of solar loans mimic those of any other standard loan. Specifically:

  • Getting a lower interest rate means having a lower overall cost to borrow.
  • A shorter loan term generally means higher monthly loan payments but a lower overall cost to borrow.
  • Loans are available in a wide array of interest rates, term lengths, loan amounts, credit requirements, etc.

An important thing to note is that homeowners who finance their solar energy systems with a loan are still eligible for the federal solar tax credit. This gives you a credit worth 26% of your total solar installation costs.

How to Choose the Right Solar Loan

As you seek the best solar loan for your situation, there are a number of factors to keep in mind. These include:

  • Monthly payment amount: If you end up choosing a shorter loan term (i.e., a loan that you must pay off in a shorter amount of time), your monthly payments will probably be higher. The overall cost of the loan will be lower, but it's nevertheless important to consider the impact on your household budget.
  • Down payment amount: Depending on the loan you choose, you may or may not be required to put down a payment on the solar panels. Generally, larger down payments will mean lower interest rates and a more affordable loan overall.
  • Fees: Some solar lenders may charge prepayment penalties or monthly fees in addition to your monthly principal and interest payments. Always make sure you get fee information upfront, so as to ensure there are no surprises on your loan statement.

Secured Vs. Unsecured Solar Loans

Another important factor to consider is whether you'll get a secured solar loan or an unsecured solar loan. Here's what homeowners should know about these two options:

  • Secured loans are usually connected to some piece of collateral, such as a piece of equity in your house; this provides the lender with some protection. If you fail to make your payments, the lender can claim their piece of collateral. Because the lender has some insurance, secured loans usually offer lower interest rates and more favorable terms overall.
  • Unsecured loans do not have any collateral or security provisions for the lender. They represent a greater risk on the lender's part, and thus usually come with higher interest rates and less favorable terms.

Ultimately, the decision about which type of loan to seek comes down to this question: Do you have enough equity in your home to take out a secured loan? If so, and if you are willing to use some of that home equity to pay for solar panels, then a secured loan may be the smarter choice overall.

How to Get Low Interest Rates for Solar Loans

In addition to choosing the right type of loan, there are other steps you can take to keep your interest rates manageable when you finance a solar panel system:

  • Shop around: It's usually best not to go with the very first lender you find. Spend some time shopping around and comparing rates. Most lenders will give you a free quote that's good for a number of days while you compare offers from other companies.
  • Have someone co-sign: Having a co-signer on your solar loan — especially one with excellent credit — creates extra assurances for the lender and will usually result in more favorable rates.
  • Improve your credit score: There are several ways to improve your credit score to get a lower interest rate on a solar loan. For example, you can pay down old debts and credit card balances, be on time with monthly bill payments, and ensure you don't open any new credit cards as you apply for your solar loan.

Also be aware that there are things you can do to pay less over time other than getting a lower interest rate. Examples include choosing a shorter repayment period, looking for discounts like paperless or auto-pay discounts, avoiding loans with high fees and, if applicable, making a more substantial down payment.

Local Solar Loan Programs

Homeowners who are interested in going solar should also know about Property Assessed Clean Energy (PACE) loan programs. According to the Department of Energy, PACE programs "allow a property owner to finance the up-front cost of energy or other eligible improvements on a property and then pay the costs back over time through a voluntary assessment." What makes these programs unique is that the assessment is tied to the property itself, not to the individual.

PACE financing legislation exists in some form in 36 states plus Washington D.C. A handful of states have separate loan programs for homeowners interested in solar. Here are some current programs worth knowing about:

State Solar Loan Program Maximum
Loan Amount
Interest Rate Longest
Repayment Term
Connecticut Energy Conservation Loan Program $25,000 0% to 7% 12 years
Louisiana Home Energy Loan Program (HELP) $6,000 2% 5 years
Michigan Michigan Saves Home Energy Financing $50,000 4.44% to 7.90% 15 years
North Carolina State-regulated municipal loan options Varies Up to 8% 20 years
Ohio Energy Conservation for Ohioans
(ECO-Link) Program
$50,000 3% APR reduction
on bank loans
7 years

Additionally, certain municipalities and local utility companies may offer low-interest solar loans. We recommend researching your specific area before turning to banks or credit institutions.

Where to Get a Solar Loan

If your state doesn't have its own solar energy loan program or you're not eligible for enrollment, there are plenty of other places to get solar loans. Some of the best places to check include:

  • Credit unions
  • Lending institutions
  • In-house financing through your solar installer (which will come from a third-party solar lender)

Again, it's crucial to shop around and compare rates before deciding on which solar lender is the best fit for your needs. To get started with a free quote and find solar loan information from a top solar company in your area, you can fill out the form below.

Frequently Asked Questions: Solar Loans

Are solar loans worth it?

There are various factors to consider as you decide whether getting a solar loan is worth it. Solar loans help you increase the value of your property, lower utility bills, minimize your impact on the environment and potentially claim some tax incentives. Then again, financing does decrease your overall savings, and extends the break-even point for your residential solar system.

Do banks do solar loans?

Some banks do offer solar loans, though often with interest rates that exceed what you'd pay elsewhere. It may be worth checking with your local bank, but always remember to shop around and compare.

What is the best way to finance solar?

If you have sufficient home equity, a secured solar loan is often the most cost-effective approach. If you don't have sufficient home equity, an unsecured solar loan can work just fine.

What type of loan is a solar panel loan?

Solar panel loans are generally considered to be a type of personal loan, similar to a home improvement loan.

Can you buy a solar battery with a solar loan?

Most often the answer is yes, but make sure you double-check the terms of your loan.

Electrical workers check solar panels at a photovoltaic power station built in a fishpond in Haian in China's eastern Jiangsu province, on July 19, 2021. STR / AFP via Getty Images

By Gero Rueter

Solar panels have become synonymous with green energy, yet the mining and processing of silicon, glass and aluminum necessary to make them requires energy. And it's not always clean.

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As homeowners seek new ways to reduce their carbon footprint, minimize their use of traditional forms of energy and lower utility bills, solar power is on the rise. One state that's leading the charge toward earth-friendly power is North Carolina.

According to the Solar Energy Industries Association, the Tar Heel State is the third top state for solar installation in the entire U.S. North Carolina's total investment currently tops out at a staggering $10.1 billion, and the state has enough solar installed to power almost 900,000 homes.

Of course, some areas of the state are more solar-forward than others. In this article, we'll take a look at the top cities for solar energy in North Carolina.

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When installing a solar power system for a home or business, choosing between monocrystalline vs. polycrystalline solar panels is an important step in the planning process. But how do you decide which is right for you?

In this article, we'll break down similarities and differences between the two types of solar panels, going over costs, aesthetics, efficiency and more to help you determine the best choice for your solar installation.

What are Monocrystalline and Polycrystalline Solar Panels?

Monocrystalline and polycrystalline solar panels are the two most common types of solar energy receptors. Both work using photovoltaic cells made of silicon — the same material that's used in chips for electronic gadgets. The difference between monocrystalline vs. polycrystalline solar cells is the configuration of the silicon:

  • Monocrystalline solar panels: Each solar PV cell is made of a single silicon crystal. These are sometimes referred to as "mono solar panels."
  • Polycrystalline solar panels: Each PV cell is made of multiple silicon crystal fragments that are melded together during manufacturing. You may see them called "multi-crystalline panels" or "poly panels."

Both types of solar panels have the same purpose: converting sunlight into electricity. However, the crystalline silicon structure of individual solar cells affects their performance and appearance. In fact, you can identify the type of panel by simply observing the shape and color of its solar cells.

Monocrystalline Solar Panels

Monocrystalline solar panels are characterized by their black PV cells with rounded edges. They have a higher conversion efficiency than polycrystalline panels, which means they produce more kilowatt-hours of electricity. If you want to install a solar panel system but your space is limited, monocrystalline panels will be more productive per square foot.

While they're the most efficient solar panels, they're also the most expensive, since the manufacturing process of single-crystal silicon cells is more complex.

Polycrystalline Solar Panels

Polycrystalline solar panels have blue-hued PV cells with straight edges. They have a lower efficiency compared with monocrystalline cells, which means you need more panels to reach the same power output. However, polycrystalline panels also have a lower price, since their manufacturing process is simpler.

Polycrystalline panels are very durable, but they tend to last slightly less than monocrystalline panels. They are also affected more by high temperatures, which reduces their productivity on the hottest days.

Monocrystalline Vs. Polycrystalline Solar Panels: Key Differences

Now that you know the basics of monocrystalline vs. polycrystalline solar panels, let's discuss how each type of solar panel technology performs. The following table summarizes the most important differences between monocrystalline and polycrystalline solar panels:

Factor Monocrystalline Solar Panels Polycrystalline Solar Panels
Silicone Arrangement One pure silicon crystal Many silicon fragments melded together
Cost More expensive Less expensive
Appearance Panels have black hue Panels have blue hue
Efficiency More efficient Less efficient
Lifespan 25-40 years 20-35 years
Temperature Coefficient Lower temperature coefficient,
making them more efficient in heat
Higher temperature coefficient,
making them less efficient in heat

Solar Panel Cost

The silicon structure of each solar panel is the main factor that determines cost. To produce polycrystalline panels, manufacturers must simply pour molten silicon into square molds, then cut the resulting wafers into individual cells. On the other hand, to produce single-crystal solar cells, the solidification of silicon must be controlled very carefully. Because of this more complex manufacturing process, mono panels are more expensive.

Here are a couple of things to keep in mind about the cost of solar panels:

  • Monocrystalline solar panels have a higher cost when comparing only the panels.
  • The cost of inverters, wiring, electrical protections, racking and labor is the same for both solar panel types.
  • Because monocrystalline panels are more efficient, you may get a better return on your investment.
  • Homeowners are eligible for the federal solar tax credit whether they choose mono or poly panels.

Efficiency and Temperature Coefficient

As mentioned above, monocrystalline solar panels have a higher efficiency. However, this does not mean that polycrystalline solar panels are inferior products — you can find high-quality solar panels of both types. Here are a few more facts about efficiency:

  • When a solar panel has a higher efficiency, it converts a larger percentage of sunlight into electricity.
  • As of 2021, polycrystalline panels have typical efficiencies below 20%, while the best monocrystalline panels are approaching 23%.
  • You will need more polycrystalline panels to reach a certain kilowatt-hour output per month, since their efficiency is lower.
  • All solar panels suffer a temporary efficiency drop when their temperature increases, but monocrystalline solar cells are less affected by heat.

The temperature coefficient indicates how much solar panels are affected by temperature. All solar panels are factory-tested under the same Standard Test Conditions (STC) to ensure a fair comparison.

In general, polycrystalline solar panels tend to have higher temperature coefficients, which means they lose more productivity when they heat up. However, as technology improves, there are now solar panels of both types with similarly low temperature coefficients.

Solar panel efficiency is not a critical factor when you have plenty of space available. Since polycrystalline panels have a lower price, installing more to compensate for the lower efficiency is not a problem. However, when you have limited space, installing more panels is not an option, so monocrystalline panels will maximize electricity production in the available area.

Appearance and Lifespan

The appearance of solar cells is also a result of their silicon structure, since it determines how they interact with sunlight and how they are perceived by human eyesight. The single-crystal structure of monocrystalline cells gives them a black color, while polycrystalline cells are blue.

Both solar panel types have a long lifespan, while their payback period is less than five years in many cases. Solar manufacturers normally offer a 25-year power production warranty, but some brands now come with 30-year warranty coverage.

Are Monocrystalline or Polycrystalline Solar Panels Best for You?

Each type of solar panel has advantages and disadvantages, and you can get an excellent return on investment with both. However, to make your choice easier, consider the following factors when picking the best solar panels for your home:

Do you want solar panels of a specific color? Keep in mind that monocrystalline panels are black, while polycrystalline panels are blue. If you prefer one over the other, you can buy solar panels to suit your taste.

How much space do you have for solar panels? The exact dimensions of home solar panels depend on their brand and manufacturer. The typical dimensions are 65 inches by 39 inches, equivalent to 17.6 square feet per panel, but monocrystalline panels offer more watts per square foot. Here's a simplified example of how you can install more kilowatts in a given area by using monocrystalline panels:

  • You may find that a polycrystalline panel produces 300W, while an equally-sized monocrystalline panel produces 350W.
  • If you have space for 20 of them, you will reach 7 kW with the monocrystalline panels, but only 6 kW with the polycrystalline panels.

What do your budget and financing options look like? Polycrystalline solar panels are more affordable, but monocrystalline panels are more productive. If you have access to a solar loan with favorable interest rates, you can finance your solar installation and pay the loan off with the money you save on utility bills. In this case, the extra cost of monocrystalline panels is not an issue.

Also, make sure you compare several solar quotes. Monocrystalline solar panels are more expensive individually, but you must also consider other system components and installation costs. There may be cases in which a completed installation with monocrystalline panels is actually cheaper, even if a single panel costs more.

To start comparing costs, you can get a free, no-obligation quote from a top solar installation company in your area by filling out the 30-second form below.

Other Types of Solar Panels

Monocrystalline and polycrystalline solar panels are the most common, but they are not the only types available. You will also find thin-film solar panels, which have a completely different manufacturing process:

  • Instead of using crystalline solar cells, they use a photovoltaic material that is deposited in thin layers.
  • There are many subtypes of thin-film solar panels based on their PV material. The most common are cadmium telluride (CdTe), copper gallium indium diselenide (CIGS) and amorphous silicon.
  • Since thin-film solar panels are not divided into cells, they have a uniform surface without divisions.
  • Most flexible solar panels use thin-film solar cells.

The main disadvantage of thin-film solar panels is that they are much less efficient than polycrystalline or monocrystalline panels. This means you must cover a larger area with thin-film solar panels to reach a certain kilowatt-hour production.

FAQ: Monocrystalline Vs. Polycrystalline Solar Panels

Which solar panel type is better: monocrystalline or polycrystalline?

Both monocrystalline and polycrystalline solar panels have certain pros and cons, which means the better choice for you will depend on your specific project. Monocrystalline panels are recommended when space is limited and when you are willing to make a larger investment to achieve top efficiency. On the other hand, polycrystalline solar panels are recommended when you want to reduce upfront costs and space is not a limitation.

Is monocrystalline more expensive than polycrystalline?

When comparing the price of individual solar panels, monocrystalline products are more expensive. However, when comparing quotes for completed solar systems, you may find similar costs per kilowatt among both technologies. This is because, due to their high efficiency rates, you'll need to buy fewer mono panels overall.

What is the difference between polycrystalline and monocrystalline solar panels?

Polycrystalline solar panels have blue cells made of multiple silicon crystals, and they are less efficient but more affordable. Monocrystalline panels have black cells made of single crystals, and they offer a higher efficiency at a higher price.

What is the price difference between monocrystalline and polycrystalline solar panels?

This price difference between monocrystalline and polycrystalline solar panels varies depending on the exact solar panel models being compared. However, in general, the price difference is comparable to the efficiency difference — monocrystalline panels are around 20% more efficient, but they also cost around 20% more.

Comparing quotes for complete solar power systems is recommended, since they include all other system components and their installation costs.

Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, fast food, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.

The 6 megawatt Stanton Solar Farm outside of Orlando, Florida on Sept. 8, 2021, the day the Biden administration released plans to produce 40 percent of the country's electricity by 2035. Paul Hennessy / SOPA Images / LightRocket via Getty Images
Solar energy can rise from 3% of U.S. power generation today to 40% by 2035, and ultimately 50% by 2050, a new report from the Energy Department and National Renewable Energy Laboratory shows.
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For nearly as long as solar panels have been gracing rooftops and barren land, creative people have been searching out additional surfaces that can be tiled with energy-generating photovoltaic (PV) panels. The idea has been pretty straightforward: if solar panels generate energy simply by facing the sun, then humans could collectively reduce our reliance on coal, oil, gas and other polluting fuels by maximizing our aggregate solar surface area.

So, what kind of unobstructed surfaces are built in every community and in between every major city across the globe? Highways and streets. With this in mind, the futuristic vision of laying thousands, or even millions, of solar panels on top of the asphalt of interstates and main streets was born.

While the concept art looked like a still from a sci-fi film, many inventors, businesses and investors saw these panels as a golden path toward clean energy and profit. Ultimately, though, the technology and economics ended up letting down those working behind each solar roadway project — from initial concepts in the early 2000s to the first solar roadway actually opened in France in 2016, they all flopped.

In the years since the concept of solar roadways went viral, solar PV has continued to improve in technology and drop in price. So, with a 2021 lens, is it time to re-run the numbers and see if a solar roadway could potentially deliver on that early promise? We dig in to find out.

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Many homeowners can benefit from installing solar panels, harnessing the sun's energy to help reduce or even eliminate their dependence on traditional utilities. Although solar panels can be expensive, solar loans make residential systems more accessible to homeowners.

Indeed, if you live in an area that gets consistent year-round exposure to the sun, solar panels can be an effective way to lower your home's energy costs while minimizing your environmental footprint. The biggest obstacle to solar adoption is the initial cost of solar panels.

All in, solar panel installation costs typically range from $10,000 to $35,000. In this article, we'll explain how solar loans can make that initial investment much easier to handle.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

Solar Loan Basics

So, how do solar loans work, exactly? Well, they're similar to home improvement loans, or any other type of purchase loan: They enable you to buy a residential solar system and pay it off over time.

There are plenty of solar loan options to choose from. For example, to finance solar panels, you can typically choose from any of the following:

  • An unsecured personal loan
  • A home equity loan or line of credit
  • In-house financing through your solar installation company

For the most part, the terms and conditions of solar loans mimic those of any other standard loan. Specifically:

  • Getting a lower interest rate means having a lower overall cost to borrow.
  • A shorter loan term generally means higher monthly loan payments but a lower overall cost to borrow.
  • Loans are available in a wide array of interest rates, term lengths, loan amounts, credit requirements, etc.

An important thing to note is that homeowners who finance their solar energy systems with a loan are still eligible for the federal solar tax credit. This gives you a credit worth 26% of your total solar installation costs.

How to Choose the Right Solar Loan

As you seek the best solar loan for your situation, there are a number of factors to keep in mind. These include:

  • Monthly payment amount: If you end up choosing a shorter loan term (i.e., a loan that you must pay off in a shorter amount of time), your monthly payments will probably be higher. The overall cost of the loan will be lower, but it's nevertheless important to consider the impact on your household budget.
  • Down payment amount: Depending on the loan you choose, you may or may not be required to put down a payment on the solar panels. Generally, larger down payments will mean lower interest rates and a more affordable loan overall.
  • Fees: Some solar lenders may charge prepayment penalties or monthly fees in addition to your monthly principal and interest payments. Always make sure you get fee information upfront, so as to ensure there are no surprises on your loan statement.

Secured Vs. Unsecured Solar Loans

Another important factor to consider is whether you'll get a secured solar loan or an unsecured solar loan. Here's what homeowners should know about these two options:

  • Secured loans are usually connected to some piece of collateral, such as a piece of equity in your house; this provides the lender with some protection. If you fail to make your payments, the lender can claim their piece of collateral. Because the lender has some insurance, secured loans usually offer lower interest rates and more favorable terms overall.
  • Unsecured loans do not have any collateral or security provisions for the lender. They represent a greater risk on the lender's part, and thus usually come with higher interest rates and less favorable terms.

Ultimately, the decision about which type of loan to seek comes down to this question: Do you have enough equity in your home to take out a secured loan? If so, and if you are willing to use some of that home equity to pay for solar panels, then a secured loan may be the smarter choice overall.

How to Get Low Interest Rates for Solar Loans

In addition to choosing the right type of loan, there are other steps you can take to keep your interest rates manageable when you finance a solar panel system:

  • Shop around: It's usually best not to go with the very first lender you find. Spend some time shopping around and comparing rates. Most lenders will give you a free quote that's good for a number of days while you compare offers from other companies.
  • Have someone co-sign: Having a co-signer on your solar loan — especially one with excellent credit — creates extra assurances for the lender and will usually result in more favorable rates.
  • Improve your credit score: There are several ways to improve your credit score to get a lower interest rate on a solar loan. For example, you can pay down old debts and credit card balances, be on time with monthly bill payments, and ensure you don't open any new credit cards as you apply for your solar loan.

Also be aware that there are things you can do to pay less over time other than getting a lower interest rate. Examples include choosing a shorter repayment period, looking for discounts like paperless or auto-pay discounts, avoiding loans with high fees and, if applicable, making a more substantial down payment.

Local Solar Loan Programs

Homeowners who are interested in going solar should also know about Property Assessed Clean Energy (PACE) loan programs. According to the Department of Energy, PACE programs "allow a property owner to finance the up-front cost of energy or other eligible improvements on a property and then pay the costs back over time through a voluntary assessment." What makes these programs unique is that the assessment is tied to the property itself, not to the individual.

PACE financing legislation exists in some form in 36 states plus Washington D.C. A handful of states have separate loan programs for homeowners interested in solar. Here are some current programs worth knowing about:

State Solar Loan Program Maximum
Loan Amount
Interest Rate Longest
Repayment Term
Connecticut Energy Conservation Loan Program $25,000 0% to 7% 12 years
Louisiana Home Energy Loan Program (HELP) $6,000 2% 5 years
Michigan Michigan Saves Home Energy Financing $50,000 4.44% to 7.90% 15 years
North Carolina State-regulated municipal loan options Varies Up to 8% 20 years
Ohio Energy Conservation for Ohioans
(ECO-Link) Program
$50,000 3% APR reduction
on bank loans
7 years

Additionally, certain municipalities and local utility companies may offer low-interest solar loans. We recommend researching your specific area before turning to banks or credit institutions.

Where to Get a Solar Loan

If your state doesn't have its own solar energy loan program or you're not eligible for enrollment, there are plenty of other places to get solar loans. Some of the best places to check include:

  • Credit unions
  • Lending institutions
  • In-house financing through your solar installer (which will come from a third-party solar lender)

Again, it's crucial to shop around and compare rates before deciding on which solar lender is the best fit for your needs. To get started with a free quote and find solar loan information from a top solar company in your area, you can fill out the form below.

Frequently Asked Questions: Solar Loans

Are solar loans worth it?

There are various factors to consider as you decide whether getting a solar loan is worth it. Solar loans help you increase the value of your property, lower utility bills, minimize your impact on the environment and potentially claim some tax incentives. Then again, financing does decrease your overall savings, and extends the break-even point for your residential solar system.

Do banks do solar loans?

Some banks do offer solar loans, though often with interest rates that exceed what you'd pay elsewhere. It may be worth checking with your local bank, but always remember to shop around and compare.

What is the best way to finance solar?

If you have sufficient home equity, a secured solar loan is often the most cost-effective approach. If you don't have sufficient home equity, an unsecured solar loan can work just fine.

What type of loan is a solar panel loan?

Solar panel loans are generally considered to be a type of personal loan, similar to a home improvement loan.

Can you buy a solar battery with a solar loan?

Most often the answer is yes, but make sure you double-check the terms of your loan.

Photo by Zbynek Burival on Unsplash

If you live in an apartment without its own roof or if you're a business owner renting a commercial space, a community solar project may help you save on electric bills. Community solar power is a great option for individuals and businesses who can't install their own solar panels.

You can join a community solar project by purchasing a share or by paying a subscription. Then, the electricity production that corresponds to your ownership percentage or subscription will be measured and subtracted from your power bills. This is possible even if the community solar panel installation isn't located in your neighborhood — by investing in the project, your share of the solar generation is simply subtracted from your bill.

In this article, we'll outline the pros and cons of community solar subscriptions and help you decide whether to invest in your local program.

What is Community Solar?

Community solar is a term used to describe photovoltaic systems that are shared by many consumers, including homeowners, renters, businesses, nonprofit organizations and more. Electricity savings and other benefits from the solar project are split among its shareholders and subscribers at a rate based on the level of investment.

When starting a community solar project, developers will establish the geographic area from which consumers are eligible to join. Some programs have installed multiple solar power systems in the same area, allowing a larger number of shareholders and solar subscribers.

Community solar power is possible thanks to virtual net metering. Through this process, a percentage of the electricity produced by the community solar panels is subtracted from the total amount of power you use in your home even though the panels aren't located on your property. Here are a few key things to note:

  • The kilowatt-hours produced by a community solar project are measured for each billing period and are divided based on ownership shares.
  • If a community solar array produces 10,000 kWh of electricity and you own 5% of the project, you get 500 kWh for that billing period.
  • The value of those 500 kWh will be subtracted from your power bill, so if you use, for example, 750 kWh of electricity in your home, you'd only pay your utility company for 250 kWh.

Benefits of Community Solar

The main benefit of community solar is saving on power bills, especially in places with high electricity prices and abundant sunshine. However, the concept of sharing a solar array brings many other benefits, both technical and economic. These include:

  • Community solar can be used by homeowners or renters who can't install rooftop or ground-mounted solar panels. Some roof structures are not suitable for solar panels, and others are too shaded from surrounding buildings or objects to be effective. Community solar may also be an option if you live in an apartment without its own roof or if you simply don't like the appearance of rooftop solar panels.
  • You can easily take your solar savings to another home or apartment. If you install solar panels and decide to move in a few years, you must either sell them or take them with you. On the other hand, when joining a community solar project, you can simply assign the savings to your new address.
  • You can sometimes sell or donate your community solar share (depending on program conditions). This is useful if you move to a location that is not covered by the community solar program or if you decide to install your own solar panels in the future.
  • Community solar supports a more diverse customer base. To install your own solar panels, you must have the cash for an upfront payment or qualify for a loan. This financial barrier is eliminated with community solar — consumers can pay a monthly subscription or can purchase a small share according to their budget.
  • With community solar, you can forget about maintenance and part replacements. Solar panels need regular cleaning to stay productive, and components like inverters and solar batteries must usually be replaced after about 10 years. However, you don't have to worry about maintenance with community solar, as there is a project developer in charge.
  • Community solar shareholders are eligible for the federal solar tax credit. When purchasing a share of a community solar project, you can deduct 26% of your investment on your next tax declaration. Just keep in mind that this benefit is not available when joining as a subscriber, since technically you don't own a part of the community solar farm.

Community solar is an easier alternative to installing your own solar power system. The project developer is responsible for financing, installation, operation and maintenance, and you can reduce your electricity bills by simply buying a share of the project or subscribing.

However, installing your own solar power system also brings many benefits. You save the full economic value of the electricity generated, for example. Onsite solar power also increases the value of homes and commercial buildings, and many incentive programs are only available when you buy solar panels directly.

If you're weighing each option, it can be helpful to get a free quote for a home solar installation. Fill out the form below to get connected with a top solar company near you.

How Does Community Solar Work?

In a few words, community solar lets you save on power bills with a shared photovoltaic array, instead of having your own system. However, not all community solar projects are alike, and they can be classified into several types:

  • On-site vs. off-site
  • Ownership vs. subscription

Community solar should not be confused with group purchasing, which happens when many homeowners or businesses purchase individual solar systems at bulk prices. This does not count as community solar, since the project is split into many private installations.

On-Site Vs. Off-Site Community Solar

Many real estate developers use on-site community solar projects in their residential, commercial or mixed-use projects. The electricity generated by solar panels reaches consumers through a private power system, without depending on the local electric grid. On the other hand, off-site community solar is supplied via the grid.

Here are the main benefits and drawbacks of each type of community solar project:

On-Site Community Solar Off-Site Community Solar
Pros On-site community solar systems often achieve higher savings — because they don't use the local electric grid, they don't pay transmission and distribution fees to a utility company. Off-site community solar projects can serve a larger number of customers. You can also keep your ownership share or subscription when moving to another address, as long as you stay within the project's service area.
Cons On-site community solar is only available for local property owners and tenants of communities that have installed these energy projects. Depending on limitations with your local power grid, you may not yield as high of savings with off-site community solar.

Ownership Vs. Subscription Model

Community solar projects offer ownership shares and subscriptions. Some projects only have one option available, while others let you choose. You can save on power bills with both options, but understanding the differences between them is important:

  • When you purchase an ownership share in a community solar project, the corresponding percentage of power generation is yours for the entire service life of the project. Also, since you're a partial owner of the system, you can claim 26% of your investment as a federal tax deduction. However, owning part of a community solar project means you must have the capital to pay upfront.
  • When you subscribe to a community solar project, there is no upfront investment. Instead, you pay a monthly fee. This means there is an ongoing cost, but the corresponding power bill savings are higher than the subscription fee. Keep in mind that subscription costs may increase over time, while an ownership share represents a single upfront payment.

Each option has pros and cons — you will generally save more when you become a shareholder in a community solar project, but a subscription comes with zero upfront cost. Also, consider that you must sell your share if you move to a location not covered by a community solar project, while a subscription can be easily canceled.

Is Community Solar Available Near You?

Community solar offers many benefits, but it is not available nationwide. To scale these types of projects, state governments must first enable this business model by law. Also, developers are more likely to invest in community solar projects if market conditions are favorable. Generally, the best states for solar power are those with incentive programs, abundant sunshine and/or high electricity prices.

There are currently 40 states with at least one community solar project in operation, and the Solar Energy Industries Association (SEIA) reported that 3.1 GW of community solar were online and operational by the end of Q1 2021. There is an optimistic outlook for community solar, and the SEIA has forecast a growth of 4 GW over the next five years. Each gigawatt of solar power can cover the electricity needs of around 186,000 American homes.

If you're interested in community solar power, you can check local government and utility websites — there could be several projects available near you.

FAQs: Community Solar

Is community solar legit?

Like all power generation projects, community solar systems are subject to laws and regulations. If you look for a developer that uses high-quality solar components and qualified installers, community solar is a reliable option to save on power bills for many years.

Is community solar a good deal?

To join a community solar project, you must become a shareholder with an upfront investment or pay an ongoing subscription. The power bill savings achieved will be higher than your monthly utility payments in both cases, but depending on the pricing model of your community's program, one option may present a better deal than the other.

What is community solar, and how does it work?

Community solar is an alternative to installing your own solar panels: You participate in a shared solar project as a shareholder or subscriber, and you get part of the electricity produced. This is a great option for individuals or companies who can't install their own solar panel systems due to lack of space or other limitations.

How does community solar make money?

Based on your ownership share or subscription type, you get part of the electricity produced by a community solar array. The kilowatt-hours generated are subtracted from your power bill — just like when you own solar panels directly.

Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, fast food, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.

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As you seek to optimize the performance of your residential solar panels, there are a number of factors to consider. One thing you'll want to think about is the best direction for solar panels. The orientation of your roof in relation to the sun can have a huge impact on overall solar efficiency.

In this article, we'll outline the best direction for solar panel orientation as well as the optimal angle. We'll also explain solar tracking technology, which can ensure your panels face the sun for as long as possible each day. Read on to learn more.

Basics of Solar Panel Orientation

So, what is the best direction for solar panels? For homeowners who live in the Northern Hemisphere, the rule of thumb is that solar panels should be oriented toward true south. (For those in the Southern Hemisphere, solar panels should be oriented toward true north.) This is the best orientation because it ensures that solar panels receive direct sunlight throughout the day.

It's also worth noting that solar panels are most efficient when the sun's rays strike them perpendicularly. Again, this true south/true north orientation can be helpful, but angle also plays a large part in this parameter.

Best Direction for Solar Panels

As you consider solar panel installation, it's crucial to remember that, for the highest energy production, you'll want your panels to receive direct sunlight throughout the day. Again, for those who live in the Northern Hemisphere, this means orienting your panels toward true south, and vice versa in the Southern Hemisphere.

Note that, when we talk about true south, we're talking about geographic south, not magnetic south. In other words, you should orient your solar energy system based on the lines of longitude on a map, not by the directions on a compass.

Something else to keep in mind is that it may be beneficial to have a rotation slightly away from the best direction if you want to adjust the hours that your solar panels provide you energy (like facing them southwest to get more energy in the late afternoon as the sun is setting).

Hopefully, you have a south-facing roof that is optimally positioned for your solar panels. If the orientation of your roof isn't quite right, however, that doesn't mean solar power is off the table. There are several other options to consider, including solar carports and ground-mounted solar panels that can utilize south-facing panels for optimum electricity production.

Best Angle for Solar Panels

In addition to choosing the best direction for your solar panels, it's also helpful to select the right angle. Here, the general rule of thumb is to set the solar panel tilt angle equal to the geographical latitude. In other words, if you're at 35 degrees latitude, set your panels at a 35-degree angle.

The angle of your solar panels will help ensure the sun hits them perpendicularly, promoting the highest solar production and, thus, the highest electricity bill savings for your household.

With that said, you'll also want to consider how weather impacts solar panels. A good example of this is heavy snowfall. If you live in a part of the country where there is excessive snow accumulation, that could ultimately impede the efficacy of your solar panels. By tilting your panels at a sharper angle, you can minimize the buildup of snow or other debris.

This may all sound technical, but it's worth noting that professional solar installers will work with you to design a solar power system that works optimally; that includes recommending where to place your panels, how to angle them and more.

Solar Panel Tracking Systems

For ground-mounted panels, you might also consider installing a solar panel tracking system. Solar trackers maximize panel efficiency by rotating your panels throughout the day, allowing them to follow the movement of the sun from its rise to its set.

Just how much more efficient can a tracker make your solar panel system? One study showed that on a clear day, the average efficiency of a tracking panel was about 67%, while fixed panels only got about 40% efficiency.

As you consider solar panel tracking systems, you'll need to decide between a single-axis or a dual-axis system. Single-axis systems only move in one direction, typically north to south. A dual-axis system allows for movement along the north-south axis and the east-west axis.

Dual-axis systems take up more space, and thus are mostly used in commercial settings. They can certainly be effective, enabling your solar panels to reposition in accordance with changing seasons when the sun is higher or lower in the sky, but they typically aren't necessary for residential use.

Are Solar Panels Right for Your Home?

When deciding whether solar panels are worth it for your home, roof position should always be taken into consideration.

Most reputable solar installers offer free home consultations, during which a representative will survey your roof and let you know whether rooftop solar would be a good idea based on your roof's positioning and how much sunlight your home receives throughout the year.

To get a free, no-obligation quote and set up a consultation with a top solar company near you, fill out the 30-second form below.

FAQ: Best Direction for Solar Panels

Is east or west better for solar panels?

For most homeowners in the Northern Hemisphere, panels need to face toward the geographic south, but not necessarily toward the east or west. The north-south axis tends to be more determinative of a solar panel's efficiency.

Should solar panels face south or west?

For homeowners in the Northern Hemisphere, geographic south is typically the best direction for solar panels.

Do solar panels need to be south facing?

For homeowners who live in the Northern Hemisphere, it is recommended that solar panels be oriented toward geographic south (as opposed to magnetic south). In other words, orient your panels according to lines of longitude rather than magnetic poles.

Which is the best direction to face solar panels in Australia?

For Australian homeowners, north-facing solar panels tend to be most effective, though a professional installer can give a more specific recommendation.

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California is setting the pace for converting to solar energy in the U.S., but some parts of the Golden State lean more toward solar than others. So, what are the top cities for solar in California?

According to a recent report from the Energy Information Administration (EIA), California is the top state for solar installation in the U.S., producing nearly 45% of the country's estimated small-scale residential solar energy generation in 2019. Additionally, the total solar investment in the state topped $73.7 billion through the first quarter of 2021.

In this article, we'll break down which California cities are at the forefront of that charge.

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Solar power is among the most affordable renewable energy options, whether for businesses or homes. Companies that provide solar products are everywhere these days, but to take advantage of the benefits of solar energy, homeowners are faced with a major decision: solar leasing vs. buying panels outright.

A solar lease is a long-term contract between a customer and a solar panel provider. For homeowners seeking to fulfill their energy needs without high utility bills, but who don't have the upfront capital to buy a system, solar leasing can seem like a viable option. In this article, we'll take a look into whether a solar lease is actually a smart investment.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

What is Solar Leasing and How Does it Work?

Solar leasing is a financing option through which customers pay a monthly fee for the panels and get to use the power the system produces. They do not, however, own the panels. It is an arrangement similar to leasing a car — the idea is to provide a convenient option for those who want to go green and reduce their electricity bills without the overhead of buying a solar energy system.

There are a few benefits to solar leasing. First, it reduces a customer's upfront costs to install panels. Using a solar lease means the maintenance and liability to damaged panels rests on the solar company rather than the homeowner. However, because you do not own the panels, you miss out on incentives like local and federal tax credits.

Typical solar leases last for 20 years, and they include a solar lease escalator that increases the monthly installment once per year based on current market prices and the energy landscape. Many solar leases come with the option to buy the solar panels at a discounted rate at the end of the lease agreement (again, similar to a car).

Solar leasing was especially important in the early days of solar when systems were more expensive, but as the cost of solar panels has decreased, leasing doesn't make as much sense as it used to.

How Leasing Differs from a Solar Power Purchase Agreement (PPA)

In many ways, solar leasing presents a competitive option compared with a solar power purchase agreement (PPA). For solar leasing, customers pay monthly rent for the panels; with a PPA, customers instead pay per kilowatt-hour (kWh) of energy generated. In other words, the amount customers pay for a solar lease is determined based on the capacity of the panels, while solar PPAs are paid based on the actual generation. This difference means that those with solar leases will have a more fixed price, benefit more during the sunny summer months and save even more money in the long run from reduced energy bills.

While both solar leasing and solar PPAs are contracts by which the customer doesn't actually own the solar panels, the specifics of costs, reliability, savings and more differ and require consideration by the individual building owner.

Typical Terms of a Solar Lease

The terms of a solar lease are critical to understanding whether it's the right route for you. Based on individual requirements, solar leasing companies can provide various lease terms, ranging from short to long periods. Typically, though, solar leases last 20 to 25 years. Given that solar panels have an average lifespan in the range of 25 to 30 years, customers end up being able to utilize solar panels to their full lifetime potential.

Different solar leasing companies will also offer opportunities for advanced services, including monitoring, payment and observation through mobile and web apps. Included in these digital offerings are online portals through which customers can review their contract, make monthly payments and observe usage over time. As with the wider utility sector, solar customers are looking to choose companies with improved service and customizable solutions, all of which provide a better user experience.

Customers must also be aware that, typically, solar leases will require an annual payment escalator of 1 to 5% per month as a result of inflated electricity costs. These terms are spelled out clearly in the contract, though, so they should not come as a surprise.

Ending Your Solar Lease

Customers who choose to lease solar panels may find themselves in circumstances where they want to end their lease, such as if they are moving to a new home. Solar leasing companies try to make this process as easy as possible, providing the option to transfer the lease to the new owners of the home or break the contract and remove the panels.

Even if you don't break your lease early, it will come to an end eventually. When this happens, customers can either renew the same lease or cease the solar contract. In the latter instance, the solar company will dismount and remove the panels. A last option is that customers can purchase the solar panels at a discounted rate (a price that is sometimes outlined in the contract at the time of the original solar lease).

Is a Solar Lease Right for You?

The decision of whether to lease solar, buy solar panels outright, engage in a PPA or simply ignore solar as an option is a very personal and major decision. To help with such decisions, here are a few pros and cons of solar leasing to keep in mind:

Pros of Solar Leasing

Solar leasing comes with many natural benefits, including the following:

  • No need to pay high upfront costs of solar panel installation
  • Locks in energy prices for the future, when the market may be volatile
  • Avoid the headache of maintenance and monitoring of equipment
  • Significant utility bill savings
  • Reduced household carbon footprint
  • Power production guarantees in solar leases mean payments can decrease if the panel doesn't produce as anticipated, minimizing the risk

Cons of Solar Leasing

Solar leasing is certainly not for everyone, though, as these contracts can come with a certain level of risk and concern as well:

  • As utility rates increase, the leasing price also increases each year and could undercut expected cost benefits.
  • Since you do not own solar panels, you are not entitled to the federal solar tax credit or local benefits.
  • Although there isn't a high upfront cost, over the system's lifetime, you'll likely end up paying an equivalent or higher amount than what you would have if you bought the solar panels outright.
  • Leased solar panels don't add value to your property like panels you own do, because they are not a part of the property you own.
  • Breaking your lease may be a hassle if you wish to move.

Leasing Solar Panels Vs. Buying Solar Panels

Earlier generations of solar panels were expensive, so leasing them was a more obvious choice. But the past decade has seen the cost of solar panels plummet, shifting that calculus and making it more accessible and profitable to outright own your own solar system.

The main difference between solar leasing and buying solar panels comes down to ownership. If you buy a solar system, you own it, and that means you are liable for its maintenance and operation costs. If you lease a solar panel, however, the company providing you with this option is the true owner and must shoulder this load.

Buying a solar panel is the best option when you want to make the most of the potential financial benefits. These economic advantages include reduced state taxes through investment credits, government rebates (sometimes up to 30%), and added Solar Renewable Energy Credits. Additionally, owning solar panels increases the market value of a property. So while solar leasing can be profitable over the lifetime of the contract, customers who have the ability to buy the systems outright will receive more financial benefit.

Solar leasing, however, is the best option when you wish to just use the electricity produced by the solar panel as a source of clean energy. Although you do not own the panels and are not entitled to any tax benefits from the state, you can still enjoy the financial benefits of solar energy without the high installation costs, ever-present risk of needing to repair damage and more.

In case of buying solar panels, if you do not have the cash to pay upfront, top solar companies provide plenty of options to finance them rather than only leaving solar leasing as an option:

  • Financing through solar installer: Many installers partner with lenders to provide lower-interest solar financing to their customers.
  • Getting a PACE loan: Also known as an R-PACE loan, Residential Property-Assessed Clean Energy loans are long-term, low-cost options to fund your solar purchase. This type of loan attaches the cost of the panels to your property tax bill through a special tax assessment.
  • Getting a standard bank loan: Solar loans can be secured through credit unions, banks, utilities or state programs. In certain cases, you can choose an on-bill financing option, in which the loan is repaid through your monthly electric bill with your utility provider. With this option, part of your monthly utility savings can be put toward your loan payment.
If you're interested in seeing how much buying a solar panel system would be for your home, you can get a free, no-obligation quote from a top provider near you by filling out the form below.

Frequently Asked Questions: Solar Leasing

What is a solar lease?

A solar lease is a long-term (usually 20-year) contract that allows a company to install a solar system on your roof without you purchasing the system. You pay monthly installments and annual price surges in exchange for the energy produced by these panels.

Is a solar lease worth it?

A solar lease may be worth it for people who do not wish to take up the hassle of maintaining solar panels or who tend to move every five to 10 years. Solar leasing may also sound beneficial to customers who cannot pay a huge amount upfront. However, there are significant financial downsides, including not being eligible for the 26% federal solar tax credit.

Why is leasing solar a bad idea?

The monthly payments you make toward a solar lease will typically increase year over year due to a price escalator that accounts for inflation. Because of this, it's likely you will end up paying an equivalent or greater amount than you would have paid if you were buying solar panels outright. Leased solar panels don't add value to your property, and contract cancellations can be a hassle if you are trying to sell your house before your lease is up. Further, because you are not the owner of the panels, you are not entitled to any financial incentives or tax rebates.

What happens after a solar lease is up?

Solar leasing tends to extend up to 20 to 25 years, which is about the average lifespan of solar panels. Once your lease is up, you have the option to either renew it, discontinue the services and get the panels removed, or buy the panels from the solar vendor at a discounted market rate.

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Solar energy is a great way for homeowners to curb their dependence on traditional utilities, slashing or even eliminating monthly electric bills and lessening their environmental impact. For those who live in the Sun Belt, solar power can be especially advantageous. As such, it should come as no surprise that Arizona is one of the top states for solar installation.

In fact, data from the Solar Energy Industries Association reveals that Arizona ranks No. 5 in the nation for total solar installations. The question is, what are the top cities for solar in Arizona? In this article, we'll present our comprehensive rankings.

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As solar energy becomes increasingly popular for residential use, you've probably had a few neighbors install solar panels and may even be thinking of getting a system for your own home. But before adopting this technology, you may be wondering: What are solar panels made of, and how are they made?

Many people simply accept that solar panels work and that's all we need to know about them, but for the scientifically and technologically curious, each individual solar panel contains a world of interesting components and materials. Keep reading to learn more about what actually makes up a solar panel.

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Many homeowners can benefit from installing solar panels, harnessing the sun's energy to help reduce or even eliminate their dependence on traditional utilities. Although solar panels can be expensive, solar loans make residential systems more accessible to homeowners.

Indeed, if you live in an area that gets consistent year-round exposure to the sun, solar panels can be an effective way to lower your home's energy costs while minimizing your environmental footprint. The biggest obstacle to solar adoption is the initial cost of solar panels.

All in, solar panel installation costs typically range from $10,000 to $35,000. In this article, we'll explain how solar loans can make that initial investment much easier to handle.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

Solar Loan Basics

So, how do solar loans work, exactly? Well, they're similar to home improvement loans, or any other type of purchase loan: They enable you to buy a residential solar system and pay it off over time.

There are plenty of solar loan options to choose from. For example, to finance solar panels, you can typically choose from any of the following:

  • An unsecured personal loan
  • A home equity loan or line of credit
  • In-house financing through your solar installation company

For the most part, the terms and conditions of solar loans mimic those of any other standard loan. Specifically:

  • Getting a lower interest rate means having a lower overall cost to borrow.
  • A shorter loan term generally means higher monthly loan payments but a lower overall cost to borrow.
  • Loans are available in a wide array of interest rates, term lengths, loan amounts, credit requirements, etc.

An important thing to note is that homeowners who finance their solar energy systems with a loan are still eligible for the federal solar tax credit. This gives you a credit worth 26% of your total solar installation costs.

How to Choose the Right Solar Loan

As you seek the best solar loan for your situation, there are a number of factors to keep in mind. These include:

  • Monthly payment amount: If you end up choosing a shorter loan term (i.e., a loan that you must pay off in a shorter amount of time), your monthly payments will probably be higher. The overall cost of the loan will be lower, but it's nevertheless important to consider the impact on your household budget.
  • Down payment amount: Depending on the loan you choose, you may or may not be required to put down a payment on the solar panels. Generally, larger down payments will mean lower interest rates and a more affordable loan overall.
  • Fees: Some solar lenders may charge prepayment penalties or monthly fees in addition to your monthly principal and interest payments. Always make sure you get fee information upfront, so as to ensure there are no surprises on your loan statement.

Secured Vs. Unsecured Solar Loans

Another important factor to consider is whether you'll get a secured solar loan or an unsecured solar loan. Here's what homeowners should know about these two options:

  • Secured loans are usually connected to some piece of collateral, such as a piece of equity in your house; this provides the lender with some protection. If you fail to make your payments, the lender can claim their piece of collateral. Because the lender has some insurance, secured loans usually offer lower interest rates and more favorable terms overall.
  • Unsecured loans do not have any collateral or security provisions for the lender. They represent a greater risk on the lender's part, and thus usually come with higher interest rates and less favorable terms.

Ultimately, the decision about which type of loan to seek comes down to this question: Do you have enough equity in your home to take out a secured loan? If so, and if you are willing to use some of that home equity to pay for solar panels, then a secured loan may be the smarter choice overall.

How to Get Low Interest Rates for Solar Loans

In addition to choosing the right type of loan, there are other steps you can take to keep your interest rates manageable when you finance a solar panel system:

  • Shop around: It's usually best not to go with the very first lender you find. Spend some time shopping around and comparing rates. Most lenders will give you a free quote that's good for a number of days while you compare offers from other companies.
  • Have someone co-sign: Having a co-signer on your solar loan — especially one with excellent credit — creates extra assurances for the lender and will usually result in more favorable rates.
  • Improve your credit score: There are several ways to improve your credit score to get a lower interest rate on a solar loan. For example, you can pay down old debts and credit card balances, be on time with monthly bill payments, and ensure you don't open any new credit cards as you apply for your solar loan.

Also be aware that there are things you can do to pay less over time other than getting a lower interest rate. Examples include choosing a shorter repayment period, looking for discounts like paperless or auto-pay discounts, avoiding loans with high fees and, if applicable, making a more substantial down payment.

Local Solar Loan Programs

Homeowners who are interested in going solar should also know about Property Assessed Clean Energy (PACE) loan programs. According to the Department of Energy, PACE programs "allow a property owner to finance the up-front cost of energy or other eligible improvements on a property and then pay the costs back over time through a voluntary assessment." What makes these programs unique is that the assessment is tied to the property itself, not to the individual.

PACE financing legislation exists in some form in 36 states plus Washington D.C. A handful of states have separate loan programs for homeowners interested in solar. Here are some current programs worth knowing about:

State Solar Loan Program Maximum
Loan Amount
Interest Rate Longest
Repayment Term
Connecticut Energy Conservation Loan Program $25,000 0% to 7% 12 years
Louisiana Home Energy Loan Program (HELP) $6,000 2% 5 years
Michigan Michigan Saves Home Energy Financing $50,000 4.44% to 7.90% 15 years
North Carolina State-regulated municipal loan options Varies Up to 8% 20 years
Ohio Energy Conservation for Ohioans
(ECO-Link) Program
$50,000 3% APR reduction
on bank loans
7 years

Additionally, certain municipalities and local utility companies may offer low-interest solar loans. We recommend researching your specific area before turning to banks or credit institutions.

Where to Get a Solar Loan

If your state doesn't have its own solar energy loan program or you're not eligible for enrollment, there are plenty of other places to get solar loans. Some of the best places to check include:

  • Credit unions
  • Lending institutions
  • In-house financing through your solar installer (which will come from a third-party solar lender)

Again, it's crucial to shop around and compare rates before deciding on which solar lender is the best fit for your needs. To get started with a free quote and find solar loan information from a top solar company in your area, you can fill out the form below.

Frequently Asked Questions: Solar Loans

Are solar loans worth it?

There are various factors to consider as you decide whether getting a solar loan is worth it. Solar loans help you increase the value of your property, lower utility bills, minimize your impact on the environment and potentially claim some tax incentives. Then again, financing does decrease your overall savings, and extends the break-even point for your residential solar system.

Do banks do solar loans?

Some banks do offer solar loans, though often with interest rates that exceed what you'd pay elsewhere. It may be worth checking with your local bank, but always remember to shop around and compare.

What is the best way to finance solar?

If you have sufficient home equity, a secured solar loan is often the most cost-effective approach. If you don't have sufficient home equity, an unsecured solar loan can work just fine.

What type of loan is a solar panel loan?

Solar panel loans are generally considered to be a type of personal loan, similar to a home improvement loan.

Can you buy a solar battery with a solar loan?

Most often the answer is yes, but make sure you double-check the terms of your loan.

Electrical workers check solar panels at a photovoltaic power station built in a fishpond in Haian in China's eastern Jiangsu province, on July 19, 2021. STR / AFP via Getty Images

By Gero Rueter

Solar panels have become synonymous with green energy, yet the mining and processing of silicon, glass and aluminum necessary to make them requires energy. And it's not always clean.

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As homeowners seek new ways to reduce their carbon footprint, minimize their use of traditional forms of energy and lower utility bills, solar power is on the rise. One state that's leading the charge toward earth-friendly power is North Carolina.

According to the Solar Energy Industries Association, the Tar Heel State is the third top state for solar installation in the entire U.S. North Carolina's total investment currently tops out at a staggering $10.1 billion, and the state has enough solar installed to power almost 900,000 homes.

Of course, some areas of the state are more solar-forward than others. In this article, we'll take a look at the top cities for solar energy in North Carolina.

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When installing a solar power system for a home or business, choosing between monocrystalline vs. polycrystalline solar panels is an important step in the planning process. But how do you decide which is right for you?

In this article, we'll break down similarities and differences between the two types of solar panels, going over costs, aesthetics, efficiency and more to help you determine the best choice for your solar installation.

What are Monocrystalline and Polycrystalline Solar Panels?

Monocrystalline and polycrystalline solar panels are the two most common types of solar energy receptors. Both work using photovoltaic cells made of silicon — the same material that's used in chips for electronic gadgets. The difference between monocrystalline vs. polycrystalline solar cells is the configuration of the silicon:

  • Monocrystalline solar panels: Each solar PV cell is made of a single silicon crystal. These are sometimes referred to as "mono solar panels."
  • Polycrystalline solar panels: Each PV cell is made of multiple silicon crystal fragments that are melded together during manufacturing. You may see them called "multi-crystalline panels" or "poly panels."

Both types of solar panels have the same purpose: converting sunlight into electricity. However, the crystalline silicon structure of individual solar cells affects their performance and appearance. In fact, you can identify the type of panel by simply observing the shape and color of its solar cells.

Monocrystalline Solar Panels

Monocrystalline solar panels are characterized by their black PV cells with rounded edges. They have a higher conversion efficiency than polycrystalline panels, which means they produce more kilowatt-hours of electricity. If you want to install a solar panel system but your space is limited, monocrystalline panels will be more productive per square foot.

While they're the most efficient solar panels, they're also the most expensive, since the manufacturing process of single-crystal silicon cells is more complex.

Polycrystalline Solar Panels

Polycrystalline solar panels have blue-hued PV cells with straight edges. They have a lower efficiency compared with monocrystalline cells, which means you need more panels to reach the same power output. However, polycrystalline panels also have a lower price, since their manufacturing process is simpler.

Polycrystalline panels are very durable, but they tend to last slightly less than monocrystalline panels. They are also affected more by high temperatures, which reduces their productivity on the hottest days.

Monocrystalline Vs. Polycrystalline Solar Panels: Key Differences

Now that you know the basics of monocrystalline vs. polycrystalline solar panels, let's discuss how each type of solar panel technology performs. The following table summarizes the most important differences between monocrystalline and polycrystalline solar panels:

Factor Monocrystalline Solar Panels Polycrystalline Solar Panels
Silicone Arrangement One pure silicon crystal Many silicon fragments melded together
Cost More expensive Less expensive
Appearance Panels have black hue Panels have blue hue
Efficiency More efficient Less efficient
Lifespan 25-40 years 20-35 years
Temperature Coefficient Lower temperature coefficient,
making them more efficient in heat
Higher temperature coefficient,
making them less efficient in heat

Solar Panel Cost

The silicon structure of each solar panel is the main factor that determines cost. To produce polycrystalline panels, manufacturers must simply pour molten silicon into square molds, then cut the resulting wafers into individual cells. On the other hand, to produce single-crystal solar cells, the solidification of silicon must be controlled very carefully. Because of this more complex manufacturing process, mono panels are more expensive.

Here are a couple of things to keep in mind about the cost of solar panels:

  • Monocrystalline solar panels have a higher cost when comparing only the panels.
  • The cost of inverters, wiring, electrical protections, racking and labor is the same for both solar panel types.
  • Because monocrystalline panels are more efficient, you may get a better return on your investment.
  • Homeowners are eligible for the federal solar tax credit whether they choose mono or poly panels.

Efficiency and Temperature Coefficient

As mentioned above, monocrystalline solar panels have a higher efficiency. However, this does not mean that polycrystalline solar panels are inferior products — you can find high-quality solar panels of both types. Here are a few more facts about efficiency:

  • When a solar panel has a higher efficiency, it converts a larger percentage of sunlight into electricity.
  • As of 2021, polycrystalline panels have typical efficiencies below 20%, while the best monocrystalline panels are approaching 23%.
  • You will need more polycrystalline panels to reach a certain kilowatt-hour output per month, since their efficiency is lower.
  • All solar panels suffer a temporary efficiency drop when their temperature increases, but monocrystalline solar cells are less affected by heat.

The temperature coefficient indicates how much solar panels are affected by temperature. All solar panels are factory-tested under the same Standard Test Conditions (STC) to ensure a fair comparison.

In general, polycrystalline solar panels tend to have higher temperature coefficients, which means they lose more productivity when they heat up. However, as technology improves, there are now solar panels of both types with similarly low temperature coefficients.

Solar panel efficiency is not a critical factor when you have plenty of space available. Since polycrystalline panels have a lower price, installing more to compensate for the lower efficiency is not a problem. However, when you have limited space, installing more panels is not an option, so monocrystalline panels will maximize electricity production in the available area.

Appearance and Lifespan

The appearance of solar cells is also a result of their silicon structure, since it determines how they interact with sunlight and how they are perceived by human eyesight. The single-crystal structure of monocrystalline cells gives them a black color, while polycrystalline cells are blue.

Both solar panel types have a long lifespan, while their payback period is less than five years in many cases. Solar manufacturers normally offer a 25-year power production warranty, but some brands now come with 30-year warranty coverage.

Are Monocrystalline or Polycrystalline Solar Panels Best for You?

Each type of solar panel has advantages and disadvantages, and you can get an excellent return on investment with both. However, to make your choice easier, consider the following factors when picking the best solar panels for your home:

Do you want solar panels of a specific color? Keep in mind that monocrystalline panels are black, while polycrystalline panels are blue. If you prefer one over the other, you can buy solar panels to suit your taste.

How much space do you have for solar panels? The exact dimensions of home solar panels depend on their brand and manufacturer. The typical dimensions are 65 inches by 39 inches, equivalent to 17.6 square feet per panel, but monocrystalline panels offer more watts per square foot. Here's a simplified example of how you can install more kilowatts in a given area by using monocrystalline panels:

  • You may find that a polycrystalline panel produces 300W, while an equally-sized monocrystalline panel produces 350W.
  • If you have space for 20 of them, you will reach 7 kW with the monocrystalline panels, but only 6 kW with the polycrystalline panels.

What do your budget and financing options look like? Polycrystalline solar panels are more affordable, but monocrystalline panels are more productive. If you have access to a solar loan with favorable interest rates, you can finance your solar installation and pay the loan off with the money you save on utility bills. In this case, the extra cost of monocrystalline panels is not an issue.

Also, make sure you compare several solar quotes. Monocrystalline solar panels are more expensive individually, but you must also consider other system components and installation costs. There may be cases in which a completed installation with monocrystalline panels is actually cheaper, even if a single panel costs more.

To start comparing costs, you can get a free, no-obligation quote from a top solar installation company in your area by filling out the 30-second form below.

Other Types of Solar Panels

Monocrystalline and polycrystalline solar panels are the most common, but they are not the only types available. You will also find thin-film solar panels, which have a completely different manufacturing process:

  • Instead of using crystalline solar cells, they use a photovoltaic material that is deposited in thin layers.
  • There are many subtypes of thin-film solar panels based on their PV material. The most common are cadmium telluride (CdTe), copper gallium indium diselenide (CIGS) and amorphous silicon.
  • Since thin-film solar panels are not divided into cells, they have a uniform surface without divisions.
  • Most flexible solar panels use thin-film solar cells.

The main disadvantage of thin-film solar panels is that they are much less efficient than polycrystalline or monocrystalline panels. This means you must cover a larger area with thin-film solar panels to reach a certain kilowatt-hour production.

FAQ: Monocrystalline Vs. Polycrystalline Solar Panels

Which solar panel type is better: monocrystalline or polycrystalline?

Both monocrystalline and polycrystalline solar panels have certain pros and cons, which means the better choice for you will depend on your specific project. Monocrystalline panels are recommended when space is limited and when you are willing to make a larger investment to achieve top efficiency. On the other hand, polycrystalline solar panels are recommended when you want to reduce upfront costs and space is not a limitation.

Is monocrystalline more expensive than polycrystalline?

When comparing the price of individual solar panels, monocrystalline products are more expensive. However, when comparing quotes for completed solar systems, you may find similar costs per kilowatt among both technologies. This is because, due to their high efficiency rates, you'll need to buy fewer mono panels overall.

What is the difference between polycrystalline and monocrystalline solar panels?

Polycrystalline solar panels have blue cells made of multiple silicon crystals, and they are less efficient but more affordable. Monocrystalline panels have black cells made of single crystals, and they offer a higher efficiency at a higher price.

What is the price difference between monocrystalline and polycrystalline solar panels?

This price difference between monocrystalline and polycrystalline solar panels varies depending on the exact solar panel models being compared. However, in general, the price difference is comparable to the efficiency difference — monocrystalline panels are around 20% more efficient, but they also cost around 20% more.

Comparing quotes for complete solar power systems is recommended, since they include all other system components and their installation costs.

Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, fast food, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.

The 6 megawatt Stanton Solar Farm outside of Orlando, Florida on Sept. 8, 2021, the day the Biden administration released plans to produce 40 percent of the country's electricity by 2035. Paul Hennessy / SOPA Images / LightRocket via Getty Images
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