The cost of solar panels has declined a lot in recent years. In just the last decade, it shrinks 70% according to the solar energy industries association (SEIA.)     Nevertheless, a typical residential solar panel system in Georgia and South Carolina can still cost thousands of dollars and therefore, might stretch the budget of some homeowners.

That might have been true before, but it’s not now. Solar is now within reach of most homeowners. That’s because there are numerous solar system financing options available in Georgia and South Carolina making it possible for almost all homeowners to go solar. The state’s efforts to promote financing for solar panels have allowed it to rapidly grow its solar industry and earn a place among the top 15 solar states in the US.

Solar System Financing – Financing for Solar Panels in Georgia and South Carolina

If you’re a homeowner who wants to go solar but the high installation cost of a solar panel system puts solar energy out of your financial reach, you’ll be glad to know that there are several ways you can finance the system without having to pay the king’s ransom out of your own pocket. Here are some of the most common and effective solar system financing options that South Carolina solar companies recommend you use:

Cash Purchase

Hands down one of the quickest and most straightforward solar system financing options are to purchase the entire system by paying cash up front. This, however, can be quite an intimidating option for many since coughing up such a large amount will most definitely leave a noticeable dent in the bank account of an average American homeowner.

South Carolina solar companies recommend the cash purchase of a solar panel system for many reasons. Firstly, a cash purchase can save you from paying interest and other miscellaneous fee charges had you financed your system through a solar loan. This can save you a significant amount of money in the long run, especially if you have an extended loan term.

Another great benefit of a cash purchase is that you can avoid all the official time-consuming formalities and paperwork involved in leasing a solar system or borrowing a solar system. This can save you quite a bit of time and make your solar journey much smoother and quicker. Plus, since you’ll be paying for the system out of your own pocket, you won’t have to worry about having a good credit score or putting up any asset of yours as collateral as you would in case of a secured solar loan.

On the other hand, the biggest downside of a cash purchase is, you guessed it, having to pay up a hefty sum in a single payment. With such a large sum coming out of your pocket, the time it takes for your system to pay you back for the installation cost can be quite lengthy. The payback period for solar panels in South Carolina and Georgia, both, is eight to nine years.

Speaking of payback, cash financing for solar panels offers another great benefit which is that it qualifies you for the numerous federal and state-based solar incentives and tax rebates. For instance, the solar incentive tax credit offered by the federal government offers a tax credit return of 26% of your system’s net cost. This means that 26% of your system’s cost will be covered by the federal government.

The catch, however, is that the 26% cost return is offered in the form of tax credits which you can use to lower your tax bill for the year. Nonetheless, you do save money one way or another. This is however for systems installed before 2023, after which the tax credit will fall to 22% and after 2024 the incentive will be terminated. There are other states and utility-based incentives as well that can help lower the cost of your solar system even further, almost all of which you can qualify for with a cash purchase.

In addition to this, if you design a system with enough capacity to facilitate your energy needs completely, you’ll be independent of the grid energy which means that you’ll be immune to any hikes in the cost of electricity. Essentially, with a solar panel system, you’re paying for 25 to 30 years’ worth of electricity.

In view of all the benefits explained above, we can see why Georgia and South Carolina solar companies recommend cash financing for solar panels for all those who can afford them.

Solar Loans

If you don’t have the financial resources required to purchase a solar panel system by paying cash up front, a solar loan would make for a great solar system financing alternative. Solar loans are a very common option, one that homeowners usually prefer since it is more financially feasible and achievable compared to cash purchase. In addition, solar loans are widely available from a number of lenders and in various forms.

In fact, even some Georgia and South Carolina solar companies offer solar loans in collaboration with a third party, provided that you purchase your system from them of course. These loans are immensely easy to apply for and quick to process making your solar buying journey a breeze, although, still not as swift as a cash purchase.

As a matter of fact, the vast majority of people that purchase a solar system through a solar loan prefer to secure the loan from their installer because of how easy it is. A drawback, however, of getting a third-party loan from your solar provider is that the loan is often accompanied by higher interest rates or fees compared to what a solar loan from a credit union or bank might charge you.

One common type of solar loan is a home equity loan, also called a home equity line of credit. Equity is basically the difference between the market value of your home and the mortgage you owe on it. A home equity loan allows you to borrow money equal to a certain percentage of the equity on your home. According to the Federal Trade Commission, you can borrow money equal to 85% of your home’s equity value.

Furthermore, solar loans can be divided into unsecured and secured loans. The difference is that a secured loan requires you to put up an asset of yours as collateral in case you default on your loan payments. The collateral can be your house, car, or even the solar panels themselves. If you fail to make your payments, your lender has the right to seize the asset you had put forward as collateral and sell it to recoup their money.

Solar loans are generally backed by the solar system as collateral whereas home equity loans are backed by the value of your home. In contrast, unsecured loans are those that do not require the borrower to back their agreement by putting up an asset as collateral.

Since unsecured loans pose a higher risk for the lender, they usually come with higher interest rates and also have stricter requirements such as a good credit score or a high income-to-debt ratio. Speaking of credit score, this brings us to one of the biggest disadvantages of using a solar loan which is that to secure a loan, you’ll have to meet certain requirements set by the lender which often includes a moderate to good credit score.

The failure to meet the requirements can lead to you either being disqualified from consideration or being offered a loan with a high-interest rate since you’ll be considered a high-risk borrower. Other than this, solar loans are a solar system financing option.

Purchasing a system through a solar loan also qualifies you for the federal solar tax credit program and several other state-based solar incentives helping you lower the cost of your system. In addition, your solar system will generate free electricity, saving a ton of money on your utility bills. This money can be redirected towards paying off the solar loan and looking at the big picture, one could say that you’re buying a solar system for free.

Solar Leasing or Power Purchase Agreements

If buying a solar system through a solar loan or cash is out of the question for you due to a lack of cash or a poor credit score, you’ll be glad to know that you haven’t run out of options yet. While purchasing a solar system might not be in the cards for you, you can still lease a system or sign a power purchase agreement.

Both options are quite different from one another, however, they do have the commonality that in both cases the solar system is owned by the solar provider and not by you. In a solar lease, you’re essentially renting the system for an extended period of time and will be making regular payments to the solar provider throughout your leasing term.

In the case of a power purchase agreement (PPA), you sign an agreement with a solar provider agreeing to buy solar power from them at a certain pre-decided rate that is less than what your utility is charging you and as part of the agreement, the solar provider will install a solar system on your roof.

In view of this, we can see that the primary difference between the solar leasing and a power purchase agreement is that in the former, you pay for the equipment while in the latter, you pay for the power.

The major benefit of both options is that you don’t have to invest a large amount of sum into buying a solar system. Instead, you’ll have to make monthly payments for the term of your agreement and in return, you can enjoy reliable, sustainable, and clean energy. In addition, you won’t have to worry about the maintenance of your system since the solar provider will be responsible for it, to be fair, maintenance of solar systems usually is not a major hassle anyway.

Furthermore, you’ll be independent of the grid-supplied energy and therefore, be unaffected by the annual, and sometimes unforeseen, spikes in the electricity rates. It is also worth noting that solar leasing and PPA are common solar financing options and are offered by many Georgia and South Carolina solar companies.

The downside of the leasing and PPA is that they won’t save you nearly as much money as buying your own system would. Especially since there will be annual increments in the amount you pay for the lease or PPA over the term of your agreement.

Moreover, since the system will be third-party-owned, all solar incentives and tax credits offered by the state and federal governments will go to the solar company. Not to forget, with third-party-owned systems, the appreciation in your home’s value will be relatively much less than if you had bought the system.

In light of the above arguments, it is evident that solar leasing and PPA are inferior solar system financing options as compared to solar loans and cash financing for solar panels. However, buying a system may not be an option for many homeowners owing to a lack of funds or a high enough credit score.

Frequently Asked Questions (FAQs)

Does It Make Sense to Finance Solar Panels?

Although the hefty cost of solar panels may intimidate you into forgoing your plans of investing in solar energy, however, the long-term savings and benefits of solar energy make the investment totally worth it.

Is It Better to Finance or Pay Cash for Solar Panels?

Buying solar panels by paying cash up front is better than any other solar system financing option since it offers the greatest benefits and savings.

How Long Is a Typical Solar Loan?

Solar loans typically last for 10 to 20 years.

What Credit Score Is Needed for Solar Panels?

The qualifying credit score for a solar loan depends on the lender and each lender will usually have a different requirement for credit score. In general, a credit score of at least 580 is required to qualify for a solar loan.


With there being numerous solar system financing options available throughout Georgia and South Carolina, securing financing for solar panels is easier than ever. Thanks to this, the solar industry in both states has flourished and an increasing number of homeowners are embracing solar energy. Generally speaking, Georgia and South Carolina solar companies as well as a majority of solar experts all agree that buying your solar system through cash is the best way to go solar.

Contact us today at Firefly Solar with any questions and get a no-obligation price quote. Call us at 864-252-7858 or book a consultation online. And we’ll get in touch within 24 hours.