Solar Loans vs. Personal Loans — What’s the Smarter Way to Fund Your Upgrade?
Published September 2025
Installing rooftop solar is one of the smartest ways to reduce your energy bills and carbon footprint. But when it comes to financing the upgrade, homeowners often face a choice: take out a solar-specific loan or use a general personal loan. Let’s break down the pros and cons of each.
🔋 What is a solar loan?
A solar loan is designed specifically to fund energy upgrades like solar panels, batteries, and inverters. These loans often come with:
- Lower interest rates than personal loans
- Flexible repayment terms (often 5–10 years)
- Eligibility for green finance incentives
Some lenders even offer rate discounts for homes with high energy ratings or solar systems that meet certain performance standards.
💳 How does a personal loan compare?
Personal loans are more general-purpose and can be used for anything — including solar. But they typically come with:
- Higher interest rates (often 8–12%)
- Shorter terms (usually 3–5 years)
- No access to green loan benefits
While personal loans are easier to qualify for, they may cost more over time and lack the sustainability focus of solar-specific finance.
📊 Real-world example
Let’s say you’re installing a $15,000 solar system:
- Solar loan: 5.5% interest over 7 years → approx. $215/month
- Personal loan: 9.5% interest over 5 years → approx. $315/month
That’s a difference of nearly $100/month — plus the solar loan may come with added rebates or discounts.
🏡 Which option is right for you?
If you’re upgrading your home with solar, batteries, or other energy-efficient tech, a solar loan is often the smarter choice. It aligns with your sustainability goals and may unlock better terms.
At Green Path Finance, we compare lenders and help you find the best fit — whether it’s a green loan, refinance, or bundled upgrade package.