Solar financing options in Minnesota

By Virginia Rutter on November 6, 2018
Solar homeowners show off their system at a solar open house.

One way of looking at going solar is that you’re buying your next 25 years of electricity up front. That’s why many Minnesotans who want to go solar decide to finance their systems. Fortunately, we have a variety of ways to do so.

Solar loans

As solar has gained popularity throughout the state, more financing institutions are understanding the technology and providing solar-specific loans to their customers.

  • Local Banks: It is worth checking with your local bank to see whether they provide a solar loan. For example, Security Bank USA not only provides a solar loan to its customers, they believe so much in the technology that they have installed it on the roof of their bank in Bemidji!
  • Credit Unions: Credit unions are now offering solar loans as well. CU Green offers a loan from the Minnesota Credit Union Network, with partners Affinity Plus Federal Credit Union and Hiway Federal Credit Union. The Home Solar Loan can be up to $50,000, with terms up to 15 years. Partner credit unions are offering the loans at “0.25% below market rate in recognition of solar’s many benefits”.
  • Center for Energy & the Environment: Twin Cities-based nonprofit CEE provides solar loans to residents and businesses throughout the entire state. The loans can be up to $50,000, with terms up to 10 years. The interest rate is fixed at 4.99% (5.123% APR).
  • Minnesota Housing Finance Agency: The MHFA provides Fix Up Loans to homeowners in Minnesota, available through participating lenders. These can be used for solar installations, as well as energy efficiency improvements. Fix Up Loans provide a higher loan-to-value ratio on secured loans than traditional loan products, and there are also unsecured loan options available. The energy improvement loans do not allow homeowners to complete their own installation. The maximum loan amount is $15,000, and terms can be up to 20 years.

Home Equity Lines of Credit

Traditional home equity lines of credit (HELOCs) can be used for installing a solar array on your property. These can be acquired from your local bank or credit union. Similar to many of the solar loans, a HELOC is a line of credit secured to the value of your home. A HELOC often has a lower interest rate than some other common types of loans. HELOC interest may be tax deductible. You should consult with your tax advisor, as tax rules may vary depending on your situation. To qualify for a HELOC, you must have equity in your home. This means the value of your home is greater than the amount that you owe on it.

Installer financing

Many solar installers also have arrangements with financing institutions to provide financing options for their customers. Check with your installer to learn what options they may provide and how they compare with your own financing institution.