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Home equity path

HELOC: no dealer fee, and often the lowest 25-year total for qualified buyers.

A Home Equity Line of Credit charges interest on the actual system cost, with no dealer fee. The stated APR is higher than a specialty solar loan, but the financed amount is lower -- which often produces a smaller 25-year total. Requires 720+ credit score and sufficient home equity.

Typical HELOC APR mid-2026 (variable rate)
8
Dealer fee on a HELOC (you finance the actual system cost only)
0
Typical dealer fee avoided vs. a 19 to 35% specialty solar loan ($24K system)
4,560
Minimum credit score for competitive HELOC rates from most lenders
720

Financing detail

Home Equity Line of Credit (HELOC) for Solar

Ownership outcome

You own the system

Federal Section 48E applies

Not directly -- Section 25D residential credit expired December 31, 2025

Typical APR

0.08 to 0.09%

Term options

10, 15, 20 years

Data as of: 2026-06-02

Strengths

  • No dealer fee: interest accrues only on the actual system cost
  • Variable rate in mid-2026 (approx. 8%) is often lower true cost than a specialty loan with dealer fee
  • Standard bank product: no solar-lender involvement, no UCC-1 fixture filing on panels
  • Can finance any system size or equipment choice
  • Homeowner owns the system from day one and qualifies for state incentives

Considerations

  • Home is collateral: default risk is higher-stakes than unsecured loan
  • Variable rate can rise over time
  • Requires strong home equity and high credit score (720+)
  • No federal residential tax credit in 2026 (Section 25D expired)

Best for

Homeowners with strong equity and 720+ credit score who want the lowest true total cost of solar financing without the dealer-fee markup of specialty lenders.

Compare this option against cash, HELOC, and prepaid in the 25-year true-cost tool.

No contact required. Enter your system cost and dealer fee percentage and see the total for each path.

Open the Financing Comparison Tool

Common questions

Questions about Home Equity Line of Credit (HELOC) for Solar

Back to all financing options

Why might a HELOC produce a lower total cost than a specialty solar loan?
A HELOC carries no dealer fee, so the financed amount is the actual system cost. A specialty solar loan with a 25 percent dealer fee increases the financed amount from $24,000 to $30,000. Even at a higher APR, total interest on a $24,000 HELOC can be less than on a $30,000 solar loan at a lower stated rate. The comparison depends on both the APR and the financed amount.

What are the risks of using a HELOC for solar?
Your home is collateral. If you default on a HELOC, the lender can foreclose. HELOCs are variable-rate products, meaning the monthly payment can increase if the prime rate rises. As of mid-2026, HELOC rates are approximately 8 to 9 percent variable. A long-term solar loan at a fixed rate may be more predictable if you prefer payment stability.

What credit score is required for a HELOC?
Most HELOC lenders require 720 or higher for competitive rates, with minimum equity of 15 to 20 percent. Requirements vary by lender. The Energy Loan Network credit union option may have different underwriting standards.

Is the HELOC interest tax-deductible?
HELOC interest is deductible only if the funds are used for qualified home improvement purposes, and only for taxpayers who itemize deductions. Using a HELOC for solar installation is generally considered a home improvement. Consult a tax advisor on your specific situation.

Want to see this financing option compared against every other path, with the dealer fee disclosed in dollar terms?

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