Bad Credit Solar Financing: How to Get Solar with Credit Score Under 650
Options for solar financing with poor credit: PACE loans, co-signers, credit unions, and strategies to improve your credit first
Key Recommendation
Best strategy: Improve your credit 50-100 points (6-12 months), THEN get solar. A 100-point credit increase (e.g., 580 to 680) saves you $10,000-15,000 in interest over a 12-year loan. That's worth the wait.
If you need solar now: Try PACE loans (property-based, no credit requirement) or add a co-signer with good credit. As a last resort, consider subprime solar loans at 15-25% APR, but understand you'll pay nearly double vs good credit rates.
Options for Credit Score Under 650
- •PACE Loan: Property-based (no credit requirement), 6-10% APR, attached to property
- •Co-Signer Loan: Use relative's credit, get good rates (6-10% APR)
- •Credit Union: More flexible underwriting, 10-15% APR possible
- •Subprime Solar Lender: 15-25% APR, higher monthly payments
Getting solar financing with bad credit (credit score under 650) is challenging but not impossible. Traditional solar lenders like Mosaic and GoodLeap require minimum scores of 640-680, but several alternatives exist for homeowners with poor credit.
The catch? Bad credit solar loans cost significantly more. At 18% APR vs 6% APR, you'll pay an extra $13,000 in interest on a $30,000 solar loan over 12 years. For a $30k system, that's the difference between paying $42,000 total (good credit) vs $55,000 total (bad credit).
This guide covers all your solar financing options with bad credit, shows you the true costs, explains how to qualify, and provides actionable steps to improve your credit score for better rates. In many cases, waiting 6-12 months to boost your score saves more money than getting solar immediately.
Finance from $309/month
Your new solar bill could be less than your current electric bill
Compare financing optionsWhat Credit Score Do You Need for Solar Financing?
| Credit Score | Rating | Solar Loan APR | Typical Lenders |
|---|---|---|---|
| 750+ | Excellent | 4.99-6.99% | All major lenders |
| 700-749 | Good | 7-10% | Mosaic, Dividend, Sunlight |
| 650-699 | Fair | 10-15% | Sunlight, credit unions |
| 620-649 | Poor | 15-20% | Subprime lenders, co-signers |
| <620 | Very Poor | 18-25%+ | PACE, co-signers only |
The Cost of Bad Credit
Monthly payment on a $30,000 solar loan over 12 years (144 months):
Bad credit costs you $31,680 more in interest ($73,440 vs $41,760) - more than the cost of the solar system itself!
Bad Credit Solar Financing Options
If your credit score is below 650, here are your realistic options:
PACE Loan (Property-Assessed Clean Energy)
Best for: Homeowners with bad credit who have equity in their home and plan to stay long-term (10+ years).
How it Works:
- • Loan is attached to property, not you
- • Repaid via property tax bill (annual or semi-annual)
- • No credit check required
- • Priority lien (paid before mortgage)
- • Must be paid off when selling home
Requirements:
- • Home equity: typically 10-20%
- • Current on property taxes
- • Current on mortgage (no late payments)
- • Available in 38+ states
- • Home must be owner-occupied
Best feature: [VERIFY] No credit score requirement - approval is based on home equity and property tax payment history. Available when all other options fail.
Important limitations:
- • Must pay off loan when selling (before mortgage gets paid)
- • Can complicate home sales and reduce buyer pool
- • Higher foreclosure risk if property taxes aren't paid
- • Often longer terms (15-20 years) = more total interest
- • Not available in all states (check PACENation.org)
Check availability: PACENation.org (lists PACE programs by state)
Add a Co-Signer with Good Credit
Best for: If you have a family member or trusted friend with good credit (680+) willing to co-sign.
How Co-Signing Works:
- • Co-signer's credit is used for approval and rate determination
- • You both are legally responsible for payments
- • If you default, co-signer must pay (and their credit is damaged)
- • Loan appears on both credit reports
- • Co-signer can be removed after 12-24 months of on-time payments (refinance)
Massive savings: A co-signer with 720+ credit can get you 6-8% APR vs 18-25% on your own. On a $30k loan, that saves $25,000-30,000 in interest over 12 years. Worth asking family!
Lenders accepting co-signers:
- Mosaic (solar-specific, 640+ credit)
- LightStream (personal loans, 660+ credit)
- Marcus by Goldman Sachs (personal loans, 660+ credit)
- Most credit unions
Credit Union "Green Energy" Loan
Best for: Credit scores 600-660 who want better rates than subprime lenders with more personal service.
Why Credit Unions Are Better for Bad Credit:
- • More flexible underwriting (look at whole financial picture, not just score)
- • Willing to work with members who have explanations for past credit issues
- • APRs typically 3-5% lower than subprime lenders for same credit score
- • Special "green energy" or "energy efficiency" loan programs
- • Local decision-making vs automated algorithms
How to find credit unions:
- MyCreditUnion.gov - Official credit union locator
- Navy Federal Credit Union (military families)
- PenFed Credit Union (open to all, $5 membership)
- Your employer or local community credit union
Pro tip: Join the credit union, open a savings account with $25-100, wait 30-60 days to establish membership, THEN apply for the loan. This demonstrates commitment and can improve approval odds.
Subprime Solar Lenders
Best for: Last resort if PACE isn't available, no co-signer, and you need solar immediately.
| Lender | APR Range | Min Credit | Notes |
|---|---|---|---|
| Sunlight Financial | 12-20% | 620 | Higher rates for fair credit |
| Upgrade | 8.49-35.99% | 560 | Personal loan for solar |
| Avant | 9.95-35.99% | 580 | Fast funding, high rates |
| OneMain Financial | 18-35.99% | 600 | In-person application required |
Warning: At 18-25% APR, you'll pay nearly as much in interest as the solar system costs. A $30,000 system at 20% APR over 12 years = $628/month, $90,432 total. Strongly consider waiting to improve your credit instead.
Wait & Improve Credit (Often Best ROI)
Best for: Your current HVAC and roof are in working condition, and you can wait 6-12 months.
The Math:
• Pay utility bills 9 months: 9 × $230 = $2,070
• Total: $49,734
Spending 6-12 months improving your credit is often the highest-ROI action you can take. See credit improvement steps below.
Finance Your Solar System
Your new solar bill could be less than your current electric bill
Based on $30,000 at 7% APR for 12 years
Free • No credit impact to check rates
Bad Credit Solar Financing Comparison
Here's how your options compare for a $30,000 solar system with credit score under 650:
| Option | APR | Monthly Payment | Total Cost | Key Limitation |
|---|---|---|---|---|
| Co-Signer (Good Credit) | 6-8% | $290-331 | $41,760-47,664 | Need willing family member |
| PACE Loan | 6-10% | ~$121 (20yr) | $46,000-58,000 | Attached to property, limited states |
| Credit Union | 10-15% | $396-485 | $57,024-69,840 | Need 600+ credit typically |
| Subprime Lender | 18-22% | $510-590 | $73,440-84,960 | Very high interest cost |
| Wait & Improve (9mo) | 8% | $331 | $49,734* | Requires time & discipline |
| Solar Lease/PPA | N/A | Varies | $48,000-52,000 | Don't own system, no tax credit |
*Includes 9 months of utility bills ($2,070) while improving credit, then loan at 8% APR for remaining term.
Recommendation Priority
- Ask family for co-signer - Saves $25k-30k vs going alone
- Check PACE availability - No credit requirement, reasonable rates
- Try credit union - More flexible than online lenders
- Wait & improve credit 6-12 months - Often highest ROI
- Subprime lender - Only if you absolutely need solar now
- Solar lease/PPA - Absolute last resort (see our PPA vs lease guide)
How to Improve Your Credit Score 50-100 Points (6-12 Months)
If you can wait 6-12 months before getting solar, improving your credit score is usually the smartest financial move. Here's exactly how:
Pay Down Credit Card Balances (35% of Score)
Credit utilization is the second-biggest factor in your credit score. Get all credit cards below 30% utilization (ideally below 10%).
Example Impact:
- • Card 1: $4,000 balance / $5,000 limit = 80% (bad)
- • Card 2: $2,500 balance / $3,000 limit = 83% (bad)
- → Pay down to: $1,000 and $500 = 20% and 17% (good)
- Potential increase: 30-60 points in 30-45 days
Strategy: Use tax refund, bonus, or savings to pay cards down. If needed, get a small personal loan at lower APR to consolidate high-interest credit card debt.
Dispute Credit Report Errors (Immediate Impact)
[VERIFY] 20-30% of credit reports contain errors. Disputing and removing them can boost your score 10-40 points instantly.
How to Check & Dispute:
- Get free credit reports: AnnualCreditReport.com
- Review for errors: late payments you paid on time, accounts not yours, incorrect balances
- Dispute online with each bureau: Experian, Equifax, TransUnion
- Bureaus must investigate within 30 days
- Errors removed = score increases within 30-45 days
Common errors: Paid collections still showing, duplicate accounts, accounts from identity theft, incorrect late payment marks.
Set Up Payment Reminders & Autopay (35% of Score)
Payment history is the single biggest credit score factor (35%). Never miss or be late on a payment for the next 6-12 months.
Action Steps:
- • Set up autopay for minimum payment on ALL credit cards
- • Set calendar reminders 5 days before each due date
- • Link backup funding source in case primary account is low
- • Even 1 late payment can drop score 60-100 points
Timeline: 6 months of perfect payments = 20-40 point increase. 12 months = 40-80 point increase.
Don't Close Old Credit Cards (15% of Score)
Closing old credit cards hurts your credit age and utilization ratio. Keep old cards open (even if you don't use them).
What to Do Instead:
- • Keep old cards open (even with $0 balance)
- • Use once every 6 months for small purchase to keep active
- • Set up recurring $10/month subscription on old card + autopay
- • Older average account age = higher score
Exception: High annual fee cards ($95+/year) that you don't use can be closed AFTER you pay down balances and improve score elsewhere.
Avoid New Credit Applications (10% of Score)
Don't apply for new credit cards, loans, or financing for 6 months before your solar loan application.
Credit Inquiry Impact:
- • Each hard inquiry: -3 to -5 points
- • Multiple inquiries in 6 months: -15 to -25 points
- • Inquiries stay on report for 2 years
- • Stop applying 6 months before solar loan = clean slate
Exception: Rate shopping for solar loans within 14-45 day window counts as single inquiry. Get all solar quotes in 2-week period.
Pay Off or Settle Collections
If you have collections accounts, paying them off or settling can improve approval odds (though may not increase score immediately).
Strategy:
- • Contact collection agency, negotiate "pay for delete" (remove from report)
- • If won't delete, negotiate settlement for 30-50% of balance
- • Get agreement in writing before paying
- • Paid collections still show but lenders view more favorably
- • After 7 years, collections fall off report automatically
Expected Timeline & Results
Month 1-2: Quick wins
Dispute errors, pay down credit cards below 30% utilization. Expected gain: 20-50 points.
Month 3-6: Building momentum
Perfect payment history for 3-6 months. Expected gain: Additional 20-40 points.
Month 6-12: Major improvement
Extended perfect payment history, aged accounts. Expected gain: 50-100 points total from starting point.
Total expected increase: 50-100 points over 6-12 months with consistent effort. This can move you from "very poor" (580) to "fair/good" (650-680) and save $15,000-25,000 in interest.
Frequently Asked Questions
Can I get solar with a 550 credit score?
Technically yes, but options are extremely limited and expensive:
- • PACE loan: Best option (property-based, no credit requirement) if available in your state
- • Co-signer: Add family member with 680+ credit to qualify for normal rates
- • Subprime lender: Upgrade (560+ credit) or Avant (580+ credit) at 20-35% APR
- • Solar lease/PPA: Easier approval but you don't own system, miss tax credits, save 70% less
Honest recommendation: With 550 credit, focus on improving your score for 6-12 months before getting solar. You'll save $20,000-30,000 in interest and have many more options.
Should I get a solar PPA/lease if I have bad credit?
Only as an absolute last resort. Here's why:
Comparison: PPA vs Subprime Loan (both bad options)
- • Solar PPA/Lease: ~$48,000-52,000 over 25 years, don't own system, no $9k tax credit, hard to sell home
- • 20% APR Loan: $73,440 over 12 years BUT you own system, keep $9k tax credit, add home value, payments end after 12 years vs 25 years
- Even the terrible 20% loan is better long-term: Own asset, refinance when credit improves, free electricity years 13-40
Better options: Wait and improve credit, get PACE loan, or find co-signer. See our guide: Solar PPA vs Lease vs Buying.
How fast can I improve my credit score for solar financing?
Timeline depends on your starting point and actions taken:
Fast track (2-3 months): 20-40 points
Pay down credit cards to below 30% utilization, dispute credit report errors, set up autopay. Can move 580 → 620.
Medium track (6 months): 40-70 points
Above + 6 months perfect payment history. Can move 600 → 660+.
Full rebuild (12 months): 70-120 points
Full strategy including paying off collections, building positive history. Can move 580 → 680+.
Best for solar: 6-month plan to reach 650-680 range. This qualifies you for mainstream solar lenders at 10-12% APR (vs 20%+ subprime), saving $15,000+ over loan term.
What if I'm denied for a solar loan?
If denied, don't give up. Try these steps in order:
- Ask why: Lender must provide reason (too much debt, low score, etc.)
- Check credit report: Look for errors, verify score is accurate
- Try different lenders: Each has different criteria - apply to credit unions, PACE programs
- Add co-signer: Family member with good credit dramatically improves odds
- Lower loan amount: Get smaller system (5kW vs 8kW), request $20k vs $30k
- Improve & reapply: Wait 3-6 months, boost score 30-50 points, try again
Don't: Apply to 10+ lenders in a row (each denial hurts your credit more). Instead, improve credit and try again in 3-6 months.
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Related Resources
Solar Loan Rates Guide
Compare APRs from major solar lenders by credit score (4.99-20%)
Solar PPA vs Lease vs Buying
Why buying (even with bad credit loan) beats lease/PPA
Solar Panel Cost Guide
Average prices by system size to understand loan amounts
30% Federal Solar Tax Credit
How to claim $9,000+ tax credit when you buy solar
Sources & Methodology:
- Credit score requirements from FICO, Experian, and lender disclosures
- APR ranges verified from lender websites (Upgrade, Avant, OneMain, Sunlight)
- PACE loan information from PACENation.org and state PACE program websites
- Credit improvement timelines from FICO and credit bureau guidance
- Monthly payment calculations use standard amortization formulas
- Solar financing data from EnergySage and National Renewable Energy Laboratory