In a previous article, we looked at the benefits of financing a new solar installation using cash.  A standard 4kW photovoltaic (PV) system in the United Kingdom costs less than £7,000.  However, when you factor in the lifetime savings and earnings that true solar ownership provides, paying for your system out-of-pocket is the best way to increase the ROI of your clean energy investment.

Assuming you have £7,000 at your disposal.

What if you don’t have the money on hand?  Can you still enjoy huge savings and high returns?


Solar loans are an increasingly popular option throughout the UK.  However, how does this financing approach work?  More importantly, does it really make sense to go into debt?

Let’s take a look.

How Solar Loans Work

Similar to cash purchases, solar loans allow you to buy a new PV installation outright – but instead of using liquid money, you pay for your system using short-term, low interest loans.

Just as with any debt obligation, you’ll make monthly repayments to the lender until the loan is completely repaid.  However, your solar installation begins reducing your utility bill the moment your PV panels become operational. 

In the UK, average solar savings approach £55 a month. In addition, you also own the system, and thus, qualify for the UK’s generous Feed-in Tariff program.  Under this incentive, you get paid for the electricity you generate. You also get paid an additional amount for selling any surplus electricity back to the grid.

With the help of the Feed-in Tariff, average lifetime solar pv earnings in the UK exceed £18,000. Instead of paying down your debt out-of-pocket, you can use your monthly savings and earnings to repay your loan.  Once the loan is repaid, the system is 100% yours.  Moreover, you continue collecting savings and earnings for years to come.

The Advantages of Using Solar Loans in the UK

As you can see, going into debt can actually pay off in the long run.  A PV system that might otherwise be unaffordable is now within easy reach.  And as the installation owner, you receive all of the same financial benefits as if you had used your own money.  Solar incentives, earnings, and savings all come directly to you.

This shareable infographic breaks down the numbers even more (they’re pretty impressive).

However, are solar loans for everyone?

Not necessarily.

The Downside of Taking out a Loan

Arguably the biggest hurdle involves qualifying for a low interest loan.  You have to have a good credit history, and you may have to shop around.  In addition, loan applications are sometimes cumbersome.

Another disadvantage of solar loans is maintenance. 

As the PV system owner, you are responsible for all upkeep and cleaning.  However, because solar panels have no moving parts, malfunctions are infrequent.  In addition, you’ll likely be covered by component warranties, workmanship warranties, and performance guarantees. 

Are Solar Loans the Best Option for You?

If you want the financial benefits of owning a PV installation but don’t have the disposable income, taking out a solar loan is usually a great option.

However, it’s not the only option out there.

Before moving forward with your solar installation, be sure to read our comprehensive solar financing guide.  It covers many of the most popular ways UK homeowners pay for their systems – and the pros/cons of each approach.

If you’ve already decided how to finance your system, request a free solar quote today by clicking here.

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