Solar panels are an expensive investment for any home, but there are multiple financing options available to help homeowners with the cost of solar PV systems.

Whether through getting a loan, a government solar grant, or a lease agreement, our guide will explain the different options to help with financing your solar PV system.

We will also discuss the various impacts they might have on the payback period, electricity savings, and ownership of your solar panels.

The average cost of a solar panel system for a home in Ireland could range anywhere from €5,500 to over €10,000, absent any grants.

This high upfront cost is the largest barrier to people investing in solar panels. Any financing options which lower that barrier will result in faster adoption of solar power in the country.

Buying solar panels with your own money is the best option financially, since you will not have any loan repayments or reduced electricity savings.

However, if this is not an option, getting a home improvement loan will still enable you to save large amounts of money in the long run, even with the added cost of loan repayments.

The SEAI is the main source of grant funding to help with the cost of solar panels, with Solar PV grant and Solar Thermal grant being the easiest ways to reduce the cost of solar.

The Solar PV Scheme offers homeowners up to €1,800 to help buy solar panels, and the Solar water heating grant offers €1,200 to help with the cost of solar thermal panels.

The value of the SEAI solar grant depends on the size of the solar panel system being installed, while the solar thermal grant is a flat payment.

These grants are the best option for all homeowners since they are fully funded by the government and require no repayment.

Another option for helping to finance the purchase of solar panels is to get a loan to cover the upfront costs.

This will completely deal with the upfront costs, but will result in a larger overall figure to pay back.

Interest rates for solar panel loans can vary greatly between different financial institutions, and based on what type of loan you receive.

Most banks and credit unions will offer some variant of a home improvement loan with interest rates in the region of 7.5% – 9.5% APR, depending on the loan value, the loan provider, and your personal situation.

The Home Energy Upgrade Loan scheme is a government-backed programme offering loans of €5,000 – €75,000 over 10 years at extremely low interest rates.

The scheme, which is operated by the Strategic Banking Corporation of Ireland (SCBI) is able to provide low interest rates through a 2% annual subsidy provided by the government of Ireland.

While many of the financial providers who are part of the Home Energy Upgrade Loan Scheme offer interest rates of just over 3%, this may vary depending on the size of the loan.

If you are getting a loan on the lower end of the scale, this figure could increase significantly.

For a €20,000 loan, the payment schedule for different home energy upgrade loans would look like this.

*Credit Union Variable Interest Rates provided do not indicate if they would change based on the loan value

The figures above are estimates only, and the real interest rate and loan term you receive will depend on the financial information provided and other factors.

Speak directly to the banks or credit unions which are part of the scheme to see what your loan options are.

Finance Ireland is a financial services provider which has partnered with many of the largest solar panel installation companies in the country.

Their Green Home Improvements Loans offer a variable interest rate starting at 6.7%, or 7.5% APR, on loans from €4,000 to €25,000. Borrowers can get loans for a period of up to 10 years at the same rate.

A €10,000 loan at 7.5% APR over 10 years would have monthly repayments of €118.70 for a total amount repayable of €14,244.21.

While any loan for solar panels will come with monthly repayments, the money saved on electricity bills could reduce or eliminate the cost of those payments.

For a €10,000 loan used to pay for 16 solar panels (7.04kWp), with a repayment period of 10 years, we can get the following estimated costs and savings.

Electricity savings are based on a 60% self-consumption / 40% export ratio, with an electricity rate of 34c per kWh and a feed-in tariff of 19.5c per kWh. Actual monthly savings from the estimated €1,494.60 per annum will vary by month.

There are options for getting solar panels on your home or business with no upfront cost through either a leasing agreement or a power purchase agreement.

In a solar panel lease agreement, the provider will typically take on all the costs of installing and maintaining the solar panels in question, whether it is on a home or business.

The customer will have fixed monthly payments to the installer for the electricity provided by the solar panels.

Key components of any solar panel leasing agreement include:

Leasing solar panels may come with no upfront cost, but in the long term, the savings are generally less than if you purchased them outright.