Solar Financing in Texas: Your Options

The Basic Options

You have four main ways to pay for a ground mount solar system:

• Cash: Pay upfront, own it outright
• Solar loan: Finance through a solar-specific lender
• Home equity: HELOC or home equity loan
• Personal loan: Unsecured financing from a bank or credit union

Each has trade-offs. The right choice depends on your cash position, home equity, credit score, and how you feel about debt.

Cash Purchase

Paying cash gives you the best return on investment. No interest payments, no fees, no monthly bills. You own the system free and clear from day one.

Advantages

• Lowest total cost (no interest)
• Immediate positive cash flow
• No credit check required
• Simple ownership structure
• Best return on investment

Disadvantages

• Large upfront outlay ($25K-$50K)
• Ties up capital
• Not everyone has $30K sitting around
• Opportunity cost of cash

If you have the cash and don't have better uses for it, paying outright makes sense. A 10kW system costing $30,000 might save you $1,500-$2,000 per year in electricity. That's a 5-7% annual return on your investment—better than most savings accounts and many stock market returns.

Best for: Homeowners with available cash who want the simplest path and best long-term value.

Solar Loans

Solar-specific loans are designed for this exact purpose. They typically come from specialty lenders who work with solar installers. Terms usually run 10-25 years with fixed interest rates.

What to Know About Solar Loans

Interest rates

Currently ranging from 5-10% depending on credit score, loan term, and whether the loan is secured (backed by your home) or unsecured.

Loan terms

10-25 years is common. Shorter terms mean higher monthly payments but less total interest. Longer terms are easier on cash flow but cost more overall.

Dealer fees

Some solar loans have dealer fees (1-5%) built in. These increase your effective interest rate. Ask about total cost of borrowing, not just the quoted APR.

Secured vs unsecured

Secured loans use your home as collateral and typically have lower rates. Unsecured loans don't touch your home but cost more. Both require credit checks.

A typical example: $30,000 system financed at 7% for 15 years. Monthly payment: about $270. Total interest paid: roughly $18,500. Total cost: $48,500.

Best for: Homeowners who want solar now but prefer to keep cash liquid. Works well when monthly payment is less than current electric bill.

Home Equity Options

If you have equity in your home, you can tap it to finance solar. Two main options: HELOC (Home Equity Line of Credit) and home equity loans.

HELOC

A HELOC is a revolving credit line secured by your home. You draw what you need, pay interest only on what you borrow. Rates are typically variable.

• Typical rates: Prime + 0.5% to 2% (currently 8-10%)
• Pros: Flexibility, lower initial payments, tax-deductible interest (consult your tax advisor)
• Cons: Variable rate risk, your home is collateral

Home Equity Loan

A home equity loan is a lump sum with fixed payments over a set term. More predictable than a HELOC, but less flexible.

• Typical rates: 7-9% fixed
• Pros: Fixed rate certainty, potentially lower than solar loans, tax-deductible interest
• Cons: Closing costs, your home is collateral, slower funding

Best for: Homeowners with significant equity who want the lowest financing rates and are comfortable using their home as collateral.

Personal Loans

Banks, credit unions, and online lenders offer personal loans that can be used for anything, including solar. These are unsecured, meaning your home isn't on the line.

Credit unions

Often have the best rates for members. If you're a member of a credit union, check there first. Rates for excellent credit can be in the 6-8% range.

Online lenders

Companies like LightStream, SoFi, and others offer personal loans with competitive rates for good credit. Fast funding, no collateral required.

Traditional banks

Your existing bank may offer personal loans. Rates are often higher than credit unions but the process is straightforward if you have an existing relationship.

Best for: Homeowners who want to avoid putting their home at risk and have good credit scores. Terms are usually shorter (5-7 years), meaning higher monthly payments but less total interest.

Leases and PPAs: Why They're Rare for Ground Mount

Solar leases and Power Purchase Agreements (PPAs) let you have solar installed with no upfront cost. A third party owns the system; you pay them for the power it produces.

These work for rooftop solar but are uncommon for ground mount. Reasons:

Complexity: Ground mount involves land use, which complicates lease agreements. Who maintains the area? What about property access?
Higher costs: Ground mount costs more to install, making the economics less attractive for third-party owners.
Property rights: Having a third party own a structure on your land creates legal complexities most homeowners want to avoid.
Resale issues: Selling a home with a leased ground mount system is more complicated than selling one with a leased rooftop system.

If zero upfront cost is your priority and ground mount is what you want, a loan is a better path than trying to find a ground mount lease provider.

Running the Numbers

Here's how different financing options compare for a $30,000 system that saves $1,800/year in electricity:

Option	Monthly	Total Cost	Year 1 Cash Flow
Cash	$0	$30,000	+$1,800
Solar Loan (7%, 15yr)	$270	$48,600	-$1,440
HELOC (8.5%)	$250*	~$45,000	-$1,200
Personal Loan (8%, 7yr)	$468	$39,300	-$3,816

*HELOC payments vary; this assumes principal + interest payment

Cash pays back fastest. Loans with longer terms have lower monthly payments but higher total cost. Shorter-term loans cost less in interest but may exceed your electricity savings initially.

Which Option Makes Sense for You

If you have the cash and don't need it elsewhere

Pay cash. You get the best return and the simplest ownership. Solar is a solid investment that beats most conservative alternatives.

If you want solar but need to preserve cash

Look at solar loans or home equity. Choose a term that keeps monthly payments near or below your current electric bill for immediate positive cash flow.

If you have excellent credit and want to minimize interest

Shop credit unions and online lenders for personal loans. Shorter terms mean less interest, even if monthly payments are higher.

If your credit is fair or poor

Home equity options may still work if you have equity. Otherwise, focus on improving credit before financing—high-rate loans can make solar uneconomical.

A Note on Dealer-Arranged Financing

Your installer will likely offer financing through their lending partners. This is convenient—one contract, one closing. But it's not always the best rate.

Before accepting dealer financing, spend 30 minutes getting quotes from your credit union, bank, and an online lender. Compare total cost of borrowing, not just monthly payment. You might save thousands over the life of the loan.

If the dealer rate is competitive and the convenience matters, go for it. If you can save 1-2% on rate elsewhere, the extra paperwork is worth it.

Solar Financing in Texas