How to Finance Solar Panels With Bad Credit

Be honest about what a low score changes

It changes your interest rate and your options, not necessarily whether you can get solar at all. The financing products below exist specifically because approval-by-credit-score is not the only underwriting model available for solar.

Option 1: PACE financing

Property Assessed Clean Energy (PACE) programs, where available, finance the system against your home's equity and repay through your property tax bill, rather than underwriting based on credit score the way a personal loan does. Approval is generally based on home equity and payment history on the property, not a FICO score.

Trade-off to understand clearly: because payments are collected through your property tax bill, missing a payment carries the same consequences as missing property taxes, which can include a lien on your home. This is a materially different risk profile than a missed personal loan payment, and it deserves real consideration, not just a glance at the lower approval bar.

Availability varies by state and even by city or county — not every area offers a residential PACE program.

Option 2: solar lease or power purchase agreement (PPA)

Under a lease, you pay a fixed monthly amount to use panels you do not own. Under a PPA, you pay per kilowatt-hour actually produced, typically below your utility rate. Neither requires purchasing the system outright, and credit requirements are typically lighter than an unsecured loan since you are paying for service rather than borrowing purchase money.

What you give up: you do not own the system, so you generally cannot claim any ownership-based incentives, and selling your home can require the buyer to either assume the lease/PPA or you to buy out the remaining term. Read the transfer terms before signing, not after you have a buyer.

Option 3: secured loan against home equity

A home equity loan or HELOC uses your house as collateral, which typically allows a lower interest rate than an unsecured personal loan because the lender's risk is lower. Credit score still matters, but a strong equity position can offset a weaker score more than it would for an unsecured product.

The real trade-off: your home secures the debt. A missed-payment consequence here is more serious than an unsecured consumer loan. This is not a reason to avoid it automatically, but it is a reason to only take this path with a payment you are confident you can sustain.

Option 4: a co-signer

Adding a co-signer with stronger credit to a standard solar loan can unlock a materially better rate than you would qualify for alone. This requires a willing co-signer who understands they are equally responsible for the debt if payments are missed — a real obligation, not a formality, and worth a candid conversation before anyone signs.

What "bad credit" actually does to your rate

Advertised solar loan rates are almost always the rate offered to the strongest applicants. A lower credit score typically means a meaningfully higher APR than the advertised figure, sometimes several points higher. Always ask for your specific quoted rate in writing before comparing it to any advertised number, and get more than one quote — rate spreads between lenders for the same applicant can be significant.

Red flags to walk away from

• "Guaranteed approval regardless of credit or income." Legitimate lenders underwrite based on something — equity, income, co-signer, or credit. A product with literally no underwriting basis usually recoups its risk through a very high effective rate buried in the terms.
• Pressure to sign the same day. A legitimate offer survives you taking it home and reading it, or having someone else review it.
• Savings promises with no specific numbers. "Your bill could go to zero" without a number tied to your actual usage and rate is a sales line, not a projection.
• Reluctance to put the interest rate and total cost in writing before you sign. If a salesperson will not give you the APR on paper before signature day, that itself is the answer.

A realistic starting point

Bring your last twelve months of electric bills and your current credit standing to at least two different financing conversations — a PACE administrator if available in your area, and a solar installer's in-house financing partner. Compare actual written offers, not advertised rates. A modest, honestly-financed system that gets built beats an oversold system financed on unclear terms.

Frequently asked questions

Can I get solar with no credit check at all? Lease and PPA structures typically have the lightest credit requirements since you are not borrowing purchase money, though most still run some form of basic check.

Is PACE financing available everywhere? No — it is state- and often county-specific. Ask your installer directly whether it is offered where you live.

Will a smaller system be easier to finance? Often yes. A smaller loan amount or lease payment is generally easier to qualify for, and partial offset still reduces your bill.

The bottom line

Bad credit narrows your options, it does not eliminate them. PACE, leases/PPAs, secured loans, and co-signers are all real, legitimate paths — each with a genuine trade-off worth understanding before you sign, not after. Treat any offer that skips underwriting entirely as a warning sign rather than good luck.