How Long Does It Take to Pay Off Solar Panels?

April 9, 2024 | Reading Time: 8 minutes

The specifications of your solar system’s size and financing plan will impact how long it takes to pay off your solar panels. In the case that you’re purchasing your system outright, then a one to two-time payment will fulfill your invoice. If you’re financing your system by taking out a solar loan, then your repayment details can vary. We’ll dive deeper into this option below.

What to Expect with a 2024 Solar Loan

Interest Rates

Attempts to lower federal inflation have led to rising costs of solar equipment and higher interest rates on solar loans. In 2024, the interest rate of an average solar loan is 10.5%. Actual rates fluctuate to be higher or lower depending on factors such as creditworthiness, loan terms, and whether the loan is secured or unsecured.

Loan Terms

Solar panels are typically paid off within 12, 20, or 25 years, depending on your loan term. As the length of the term increases, the monthly payment decreases. But with the high-interest rates we’re facing today, paying off the loan as soon as possible is the most economical choice.

Managing Solar Loans in 2024

Whether to pay for your solar system with a loan in 2024 is a weighty decision. While a monthly payment waives a significant financial obligation at once, your total payment can more than triple the original price of your system by the end of the loan term.

The best way to combat this situation is by paying off the loan faster than the duration of the term. But before considering making extra payments, check your solar contract to ensure there are no “early payment fees” or other penalties for completing your invoice before expected. Once you’ve confirmed it’s okay to do so, we highly recommend making as many extra payments as you possibly can to minimize accrued interest.

An Easy Extra Payment: The Federal Solar Tax Credit

When you receive your federal solar tax credit, we strongly recommend depositing that money into the principal of your solar loan. Since the tax credit will cover 30% of your system’s cost, you’ll be essentially eliminating that percentage of your loan. This will be highly beneficial in the long run and can drastically limit your loan term.

Frequently Asked Questions: Solar Loans in 2024

For more information, visit our Solar Loan page. Check out our Frequently Asked Questions page under “Paying for Solar” for answers to common payment questions.

Isaksen Solar: Always Here to Help

If you have any questions or are interested in seeing how a solar loan may work for you, don’t hesitate to reach out. Our knowledgeable customer support team will be happy to assist you with any inquiries or concerns. Give us a call at (508) 717-3820, or get started online with your free solar quote.