Refinancing House With Solar Panels

Refinancing House With Solar Panels

Yes, we can refinance property with solar panels but question how?

Refinancing house with solar panels is a smart financial move, as it allows homeowners to leverage the value of their solar energy system to secure better loan terms. Here’s some content on this topic:


Besides, the renewable energy market is on the rise to make more homeowners mount solar panels on their roofs to combat climate change and lower their utility bills. On the other hand, most individuals who own a home need to realize the various positive impacts of refinancing after installing solar panel systems. Refinancing may lead to a wide range of potential benefits, such as lower interest rates, fewer monthly obligations, and the possibility to repay more money for further home improvements or other needs. The article seeks to outline the benefits of taking advantage of refinancing a house with solar panels, which is seen as a way to make the investment that you have made more beneficial in the long run.

1. Understanding the Value of Solar Panels:

Solar panels produce eco-friendly energy and contribute to your house’s value. According to surveys, solar-paneled houses almost always sell for a higher price than non-solar-paneled houses; therefore, a solar-paneled house is usually a wise investment.

Lenders understand the significant ROI of Solar panels; thus, they tend to give swift loans with appealing terms to homeowners with solar energy systems.

2. Lowering Your Interest Rate:

– A refinancing takes a homeowner’s mortgage and replaces it with a new loan, hopefully with a lower interest rate. When panels on your roof increase the value of your home, you may fall into the low o rate category, which might let you save thousands of dollars via a mortgage program over a lifetime.

Lower interest rates translate to smaller monthly payments compared to the past. Accordingly, the borrower might likely have surplus funds left for other activities like savings or even entertainment.

3. Accessing Equity for Home Improvements:

– If your property worth has increased thanks to the installation of solar panels, you could leverage the extra value and generate equity through a refinancing option. Home equity as a financing option enables you to return to the house and start with renovations, upgrades, and improvements to improve the home’s comfort and efficiency.

– Through sustainability arising out of recapitalizing your home from the equity, you can further escalate its value.

4. Streamlining Your Finances:

– Through refinancing, debt consolidation can be used to merge debt with higher interest rates, like credit cards or personal loans, into one lump sum at a more affordable cost.

– Sharing your solar panel financing with your mortgage may simplify your budget and lower the overall debt load.

5. Choosing the Right Loan Option:

– Homeowners seeking loan car finance when refinancing with solar panels have a variety of loans to consider, such as covered loans, like the Home Investment Partnerships Program, FHA loans, VA loans, and Energy-Efficient Mortgages.

Reviewing interest rates, terms, and closing costs from multiple lenders is critical to finding a refinancing plan that suits your particular needs and gets you into the most suitable financial situation.

A lender or a solar company will consider an upgrade by depending upon the property system size as well as age. And in ROI the home value increases and it will result in better refinancing terms. You can refinance it by home loans and take a better advantage in the future.

Solar Panel Systems do increase the valuation of the property, we can’t disagree to this point that it is a long term cost saving from solar panels.

As per National Renewable Energy Laboratory(NREL), there is an increment of $20 in every $1 in energy bill savings. So we can assume that the owners save annually $700 in electricity bill, then home valuation will increase by $14000 based on the solar panel system.

And 67% of buyers consider energy efficiency the most important factor while buying a property and are ready to pay 4.1% extra for that according to a 2023 research done by Zillow.

National Renewable Energy Laboratory


Installed solar panels do not guarantee a long and estimated home valuations since some factors do affect which are:

  1. Home Location
  2. Electricity Bill Amount
  3. Solar Panel condition and Years

For example, if your property is around a high electricity area with high rates then one can achieve maximum cost saving and vice – versa, when areas with low electricity rates can negatively impact and can’t achieve maximum cost saving.

Finance can affect Home Valuation and Refinancing:

Buying solar systems either with cash or solar lease, each way affects valuation differently. Or it can be say in that way, if you leased your solar system and solar provider owns the panels, then you need to either one of the following mentioned below:

  1. Buy ot the lease
  2. Transfer the lease to the new owner

It depends upon the time that how much time is left for lease a buyout option can be very expensive or we can say the new homebuyer must meet highly specific needs  from the solar provider to transfer the lease.

The tax of the property, if the solar system has high generation capacity then high valuation price and as well as high property tax.

Now that you have an approximate idea of solar system price with the product knowledge and since it is a little complex to have but one thing for sure for long term investment it will benefit you. And approx it takes 5-10 years to break even as per the electricity bill and whether it is residential or commercial. Solar panels will increase the value of your home as well as many retailers will allow you to sell the extra power that your solar panels are producing.

Refinancing House With Solar Panels:


A mortgage lender treats solar loans as a second mortgage when you purchase solar panels with solar panels, and for a second mortgage we require a subordination agreement that the solar provider has signed that states that the bank is in first line to get paid back if you default on your payments. But, loans can affect the home’s potential equity and loan’s terms. Many of the owners pay before refinancing only but not everyone can manage the same.


It allows customers to avoid extra cost of solar equipment as well as installation cost. The lien gives the solar provider the right to repossess the solar panels system if your by default payment is overdue. And also, you can lift the lien from the solar provider to refinance, which allows refinancing transactions to get close unless you pay off the loan amount.

And if you got this and are thinking of refinancing then the first step is to understand how to purchase solar panels systems with cash or loan. The second step after solar leasing is to work with the solar provider to temporarily lift any liens on the equipment.

But this whole process takes a very long time, but most solar companies and lenders are aware of the money side of things as well as the refinancing process. So for more information you can directly connect with


Is this an issue that may cause me not to be able to qualify for that mortgage?

No, the stipulation that you might install solar panels should not affect your ability to refinance your home. On the other hand, solar panels not only contribute to increasing your home’s value but also act as a refinancing booster by increasing your equity proportion and showing your dedication to a cleaner environment.

May I factor the installation of solar panels into a refinancing agreement?

As a matter of fact, the costs of setting solar panels can often still be included in the refinancing loan you take. Such an arrangement means that you can finance the upfront cost of the solar energy system exactly when you are paying a mortgage, plus you can benefit from the lower interest rates, stretching out the payments into the future.

Will refinancing with the solar panels affect the solar incentives or the tax credit I’ll get?

Unlike conventional refinancing, a refinancing process with the addition of solar panels usually doesn’t impair your eligibility for solar incentives or tax credits. However, you have to consult with a tax professional or a financial advisor beforehand to know the specific consequences of your situation.

What factors aid me in deciding if it is a good idea to refinance a loan that involves solar panels?

The choice to refinance comes with condition-tie factors such as the current mortgage rate, the cost of installing solar panels, the home’s value, and long-term financial goals. A great way to proceed would be to seek advice from a re-owned lender or a financial consultant who can assess your alternative choices and find a rationed conclusion based on your individual case.


Refinancing your house with solar panels can become a wise financial decision, which also improves the property’s value and declines utility bills for electricity and mortgage payments. Through lower interest rates, equity access for home improvements, and money consolidation, you may be assured that the returns of your solar investment will be more quickly.  You will subsequently experience greater financial ease for many years to come. Consult your long-term lender or financial analyst concerning refinancing possibilities and the best methods to reach your monetary targets. 

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