The cost of solar panels has dropped dramatically over the past decade, but it is still a significant investment. The good news is that a combination of state incentives, and flexible financing options makes solar affordable for most homeowners – often with zero money down and monthly payments lower than your current electric bill.
This guide explains every financial tool available to help you pay for solar, maximize your savings, and make the smartest investment decision for your situation.
Find out what incentives and financing you qualify for – get a free quote from Gold Path Solar →
Federal solar incentives have changed. We recommend consulting a qualified tax professional to understand what federal programs, if any, may apply to your installation.
State and Local Solar Incentives
What Solar Incentives Are Available in Ohio?
Ohio’s solar incentive landscape includes:
- Net metering: Ohio requires investor-owned utilities (AEP Ohio, Duke Energy Ohio) to offer net metering, allowing you to receive credits for excess solar energy sent to the grid. Credits are typically valued at the retail electricity rate.
- Property tax exemption: The added value of a solar energy system is exempt from Ohio property taxes for the life of the system. Your home value goes up, but your property taxes do not increase because of solar.
Columbus, Dayton, and Cincinnati homeowners benefit from two strong incentives that require no federal tax credit to deliver real value: a property tax exemption that protects your home’s increased value from higher tax assessments, and net metering that can bring your monthly electric bill to near zero.
What Solar Incentives Are Available in Kentucky?
Kentucky offers several meaningful solar incentives:
- Net metering: Kentucky law requires utilities to offer net metering for systems up to 45 kW. Excess energy credits are valued at the retail rate and roll over month to month.
- Sales tax exemption: Solar energy equipment is exempt from Kentucky sales tax, saving you 6% on the equipment portion of your installation cost.
- TVA programs: Some areas served by the Tennessee Valley Authority may have access to additional programs or green energy credits.
Between Kentucky’s sales tax exemption on solar equipment and net metering credits from KU and LG&E, Lexington and Louisville homeowners can meaningfully reduce both their installation cost and their ongoing utility bills.
What Solar Incentives Are Available in South Carolina?
South Carolina is one of the best states in the country for solar incentives:
- South Carolina state solar tax credit: Homeowners can claim a state tax credit of up to 25% of the cost of their solar system, capped at $3,500 per year but carrying forward for up to 10 years.
- Net metering: South Carolina requires utilities to offer net metering with full retail rate credits for excess solar production.
- Property tax exemption: Solar energy systems are exempt from South Carolina property taxes.
South Carolina’s 25% state tax credit makes Greenville area homeowners some of the best-positioned in Gold Path Solar’s service territory for a fast payback. This makes South Carolina one of the fastest payback markets in Gold Path Solar’s service area.
[INSERT IMAGE: State-by-state incentive comparison table for OH, KY, SC showing all available credits, exemptions, and programs]
How to Pay for Solar Panels: Financing Options Explained
There are three primary ways to pay for a residential solar system: cash purchase, solar loan, or lease/PPA. Each has different financial implications.
Should I Buy Solar Panels with Cash?
Paying cash provides the highest total return on investment because you avoid interest charges. You own the system outright from day one, qqualify for all available incentives, and start saving immediately with no monthly payment.
Best for: Homeowners who have the capital available and want to maximize long-term savings.
Typical ROI: 10–15% annual return on your investment, which outperforms most traditional investments. For a comparison, see our article on solar panels vs. the stock market.
What Is a Solar Loan and How Does It Work?
A solar loan allows you to finance 100% of your system cost with $0 down. You own the system from day one (qualifying for all available incentives), and your monthly loan payment replaces your electric bill – ideally at a lower amount.
This is the most popular option among Gold Path Solar customers. Here is why:
- No upfront cost: You go solar immediately with no cash out of pocket.
- You own the system: Unlike a lease, you build equity and qualify for all tax benefits.
- Immediate savings: If your solar loan payment is lower than your old electric bill, you save money from month one.
Typical solar loan terms are 10 to 25 years with interest rates that vary by lender and credit profile. Longer terms mean lower monthly payments but more interest paid over the life of the loan.
What Makes Gold Path Solar’s Financing Different?
Gold Path Solar offers loans with zero closing costs. This is a critical distinction that many homeowners overlook when comparing quotes.
Many solar companies advertise “$0 down” but roll thousands of dollars in dealer fees and closing costs into your loan balance. You end up financing $30,000 for a system that is actually worth $25,000 – paying interest on $5,000 of bank fees that provided zero value to you.
With Gold Path Solar’s zero-closing-cost financing, every dollar you finance goes directly toward your solar system. No dealer fees, no hidden charges, no inflated loan balances.
Compare financing options with a Gold Path Solar Advocate – no obligation →
Should I Lease Solar Panels or Sign a PPA?
Solar leases and Power Purchase Agreements (PPAs) allow you to have solar panels on your roof with little or no upfront cost, but you do not own the system. A third-party company owns the panels and either charges you a monthly lease fee or sells you the electricity at a set rate (PPA).
Gold Path Solar does not recommend leases or PPAs for most homeowners. Here is why:
| Factor | Solar Loan (Own) | Solar Lease / PPA (Rent) |
|---|---|---|
| System ownership | You own it | Third-party company owns it |
| Home value increase | Yes (4-7%) | Minimal or none |
| Selling your home | Asset that increases sale price | Buyer must assume lease or you buy it out |
| Monthly savings | Higher (no ongoing payments after loan payoff) | Lower (payments continue for full lease term) |
| Long-term cost | Loan ends; free electricity after | Payments may escalate 1-3% annually for 20-25 years |
The only scenario where a lease might make sense is if you cannot qualify for a solar loan and do not have cash to purchase. Even then, the long-term financial outcome is significantly worse than ownership.
[INSERT IMAGE: Side-by-side cost comparison graph over 25 years: cash purchase vs loan vs lease vs doing nothing (just paying utility)]
How to Maximize Your Solar Savings
How Does Net Metering Save You Money?
Net metering allows you to send excess solar electricity to the grid during the day and receive credits that offset the electricity you pull from the grid at night. In states with full retail net metering (like Ohio, Kentucky, and South Carolina), each kWh you export is worth the same as each kWh you import. This effectively makes the grid a free battery.
Net metering is what makes it possible to achieve a near-zero electric bill with solar. Without it, you would only benefit from the electricity you consume while the sun is shining. For a deeper explanation, see our guide on what net metering is and how it works.
Solar Financing Comparison: Which Option Saves the Most?
Here is a simplified 25-year financial comparison for a $25,000 solar system in Ohio (before incentives):
| Payment Method | Upfront Cost | 25-Year Total Cost | 25-Year Electricity Savings | 25-Year Net Benefit |
|---|---|---|---|---|
| Cash purchase | $25,000 | $25,000 | ~$50,000+ | ~$32,500+ |
| $0-down solar loan (15-year, 5%) | $0 | ~$24,000 | ~$50,000+ | ~$26,000+ |
| Solar lease (25-year) | $0 | ~$35,000–$45,000 | $0 (savings go to lessor) | ~$5,000–$15,000 |
| No solar (utility only) | $0 | $0 | –$65,000–$90,000 (bills paid) | –$65,000–$90,000 |
The numbers are clear: doing nothing is the most expensive option. Ownership (cash or loan) provides the greatest benefit. Leasing provides some savings but far less than ownership.
Common Questions About Solar Financing and Incentives
Do I need good credit for a solar loan?
Most solar lenders require a minimum credit score in the mid-600s, though terms and rates improve with higher scores. Your Gold Path Solar Advocate can discuss available options for your credit profile during your consultation.
Can I pay off my solar loan early?
Most solar loans have no prepayment penalties. Paying off your loan early eliminates your monthly payment and maximizes your savings. Confirm prepayment terms with your specific lender.
Will solar financing affect my mortgage or ability to sell my home?
A solar loan is a separate personal loan and does not attach a lien to your home (unlike a HELOC). It shows on your credit report but does not affect your mortgage. When selling, the loan balance can be paid off from sale proceeds, and the increased home value from solar typically more than covers any remaining balance.
What if my utility changes its net metering policy after I go solar?
Most states grandfather existing solar customers into the net metering policy that was active when they interconnected. This means going solar now locks in the current policy for you, even if rules change for future installations. This is another reason not to wait – current net metering policies in Ohio, Kentucky, and South Carolina are favorable, but they could change. Read more about the case for net metering.
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