Quick answer
A solar loan lets you own your system with little or nothing down, but many include a dealer fee that the Consumer Financial Protection Bureau found typically adds 10–30% to the cash price without showing up in the APR. A 3.99% loan carrying a 25% dealer fee works out to roughly 6.7% on the system's cash price, so always get the cash price and compare total cost.
How do solar loans work in Illinois?
A solar loan pays the installer, and you own the system from day one, so you keep the ComEd or Ameren rebate and the Illinois Shines value (usually reflected as a lower price). You repay the lender monthly, ideally less than the electricity the system saves you.
Many loans are secured by a filing on the equipment rather than a mortgage on the home, which matters when you sell. See selling a house with solar in Illinois.
What does a solar loan cost per month?
| Rate and term | Monthly payment | Total paid | Total interest |
|---|---|---|---|
| 5.99% for 15 years | $169 | $30,360 | $10,360 |
| 7.99% for 15 years | $191 | $34,380 | $14,380 |
| 7.99% for 20 years | $167 | $40,120 | $20,120 |
| 9.99% for 20 years | $193 | $46,290 | $26,290 |
| 11.99% for 25 years | $210 | $63,150 | $43,150 |
Longer terms lower the payment but raise the total cost. Compare the payment with your estimated savings in the solar savings calculator.
What is a solar dealer fee?
To advertise a low interest rate, some lenders charge the installer a fee, and the installer raises the system price to cover it. In a 2024 report, the Consumer Financial Protection Bureau found these fees typically run 10–30% of the cash price, can raise a loan's cost by 30% or more, and often aren't reflected in the APR you're shown.
| Installer loan with 25% dealer fee | Credit-union loan, no fee | |
|---|---|---|
| Amount financed | $25,000 | $20,000 |
| Advertised rate | 3.99% | 6.99% |
| Monthly payment | $151 | $155 |
| Total paid | $36,330 | $37,190 |
| True rate on the cash price | ~6.7% | 6.99% |
The 3.99% rate looks far cheaper, but because the fee is added to the balance, the payment is what you'd pay at about 6.7% on the real price. A dealer fee isn't automatically a bad deal; it just hides the true cost. It hurts most if you pay the loan off early, for example when you sell or refinance, because you keep the fee but lose years of the low rate. Paying cash avoids it entirely.
What should I check before signing a solar loan?
- 1
Ask for the cash price in writing
Compare it with the financed price. A big gap is the dealer fee.
- 2
Compare total cost, not just the rate
Get the amount financed, the APR, the term and the total of all payments.
- 3
Check for a payment step-up
Older loans assumed a 30% federal tax credit paid down the balance by month 18. That credit ended after 2025 for owned systems, so a loan built that way will raise your payment.
- 4
Price a cash or credit-union option
A home equity line or credit-union loan sometimes beats installer financing even at a higher rate.
See also solar lease vs. buying and how to spot solar scams.
Sources
This guide is general information, not tax, legal or financial advice. Incentive programs change, so confirm current terms with your installer, your utility and a tax professional.