Yes, you can finance solar panels with a VA loan, but the VA does not pay for them. The route depends on whether you are buying, refinancing, or already own, and each one changes your entitlement, funding fee, and payment differently. By Duane Buziak, NMLS #1110647. As an independent broker with a 500 FICO floor and wholesale access to 500+ lenders, Duane Buziak at VA Loans Pro by Duane Buziak compares these paths side by side instead of pushing a single product. This article covers the options for solar panels with a VA loan, what each costs, and the mistakes that cause problems at closing.
Where VA Loan Rules Meet Solar Panels
The VA guarantees a portion of your mortgage; it does not fund it. A private company makes the loan, and that company decides which solar-related structures it will actually write. That is why the broker you choose matters more than the VA rulebook alone. A direct company can offer only the energy products it has built. Duane Buziak explains it this way: a broker with 500+ wholesale lenders can match a solar plan to your credit profile, equity, and goal, because the options are spread across many rate sheets and overlays.
Credit flexibility is the first filter. The VA sets no minimum credit score, so each company sets its own floor. Veterans United publishes a 620 minimum. VA Loans Pro by Duane Buziak works down to 500 FICO through wholesale channels, subject to the underwriting guidelines of the specific program. That difference can decide whether a solar financing plan is possible at all, though it is never a guarantee of approval. If your score is a concern, this guide on getting a VA loan with a low credit score walks through the process.
A few terms will come up throughout:
- Owned system: panels you or the seller bought outright or financed, which are attached to the home and become part of the property.
- Leased system: panels owned by a solar company that you rent for a monthly fee. You own nothing.
- PPA (power purchase agreement): the solar company owns the panels and you pay per kilowatt-hour for the power they produce.
- EEM (energy efficiency improvement): VA’s term for energy upgrades, including some solar systems, that can be added to a purchase or refinance loan within set limits.
- Appraisal: the VA-assigned valuation of the home, which sets the value the loan is measured against.
- Entitlement: the amount of your VA benefit the VA will guarantee on a loan.
- COE (Certificate of Eligibility): the document confirming your VA eligibility and entitlement.
Four Ways to Pay for Solar on a VA Loan
These are the realistic paths, ordered from simplest to most involved.
Buy a home that already has owned solar
If the seller owns the system outright, it is part of the property. The VA appraiser values the home as it stands, and your loan covers the whole thing. There is no separate solar financing to arrange. Ask for the system’s age, warranty transfer terms, and production history, and confirm no solar loan or lien is attached that the seller must pay off at closing. Buyers who want this kind of home with nothing out of pocket can see how zero-down homebuying works for veterans.
Add an energy efficiency improvement to a purchase or refinance
The VA allows eligible energy improvements, including some solar heating and electric systems, to be rolled into a purchase or refinance loan. As of this writing, VA Lender’s Handbook, Chapter 6 describes tiered limits: a lower amount that needs only documented costs, a higher amount tied to projected utility savings exceeding the added payment, and anything above that needing VA approval. Confirm the current caps before you plan around them, because a full residential system can exceed the lower tiers.
VA cash-out refinance
You replace your existing mortgage with a new VA loan, pay off the old balance, and take the difference in cash to fund an installed system. The VA permits cash-out up to 100% loan-to-value, although many companies cap lower, often around 90%, which is one reason shopping across wholesale options matters. For a broader look at the choices, review these VA loan refinance options.
Separate financing outside the VA loan
A home equity loan or unsecured solar loan sits outside your mortgage. A secured second lien must be checked against your VA loan’s lien-position rules and the first mortgage’s terms, so ask before you sign. An unsecured loan avoids the lien question but usually carries a higher rate and shorter term.
Leases and PPAs
Because you do not own a leased or PPA system, nothing is added to your mortgage. Treatment during underwriting and appraisal varies by company, and some require the solar contract to be reviewed or the payment counted. If you are buying a home with an existing lease, get the agreement early.
How Solar Affects Entitlement, Funding Fee, and Appraisal
Each financing path touches three items that surprise people at closing.
Funding fee
Financed improvements and cash-out refinances carry the VA funding fee on the full loan amount. As of 2026, the VA funding fee table lists 2.15% for a first-use cash-out refinance and 3.3% for subsequent use, with an IRRRL at 0.5%. Veterans receiving VA compensation for a service-connected disability are generally exempt, which can change the math a lot. Check your rating before you compare options, and see how to avoid the VA loan funding fee for the exemption rules.
Entitlement
A cash-out refinance is a new VA loan, so it draws on your entitlement the way any new loan does. An IRRRL (Interest Rate Reduction Refinance Loan) refinances an existing VA loan with streamlined documentation and does not require fresh entitlement, though its eligibility for solar add-ons is limited and should be confirmed. If an earlier VA loan is still active, second-tier entitlement may apply and limit what you can borrow without a down payment. Your COE shows where you stand.
Appraisal
For an owned system, the appraiser values what the market supports, using comparable sales and similar homes. That may be less than the installed cost, and nobody can promise the full price comes back in value. Leased and PPA systems can complicate valuation because the equipment is not part of what you own.
The mistake to avoid
The most common problem is signing a solar contract first. A contract can create a UCC fixture filing or lien against the home, add a payment the underwriter must count, or commit you to an amount the loan cannot reach. Share any proposal with your broker before you sign anything.
Worked Example: Financing a $24,000 System With a VA Cash-Out Refinance
This is an illustration, not a quote or a rate offer. Suppose your home appraises at $400,000 and your current VA balance is $280,000. You want a $24,000 installed system and have used your VA benefit before.
- Base loan: $280,000 payoff + $24,000 system = $304,000, or 76% of value.
- Funding fee at 3.3% (subsequent use, as of 2026): $304,000 x 0.033 = $10,032.
- Total new loan: $314,032, or about 78.5% LTV.
At an example rate of 6.5% on a 30-year term, principal and interest on $314,032 is roughly $1,985 a month. The same $280,000 balance at that rate would be about $1,770, so the added cost is about $215 a month. If you are exempt from the fee, the loan is $304,000 and the payment is about $1,921.
The offset is your utility bill. Suppose the system trims $150 a month; that is an assumption, and you should replace it with numbers from your utility and the installer’s production estimate. A VA loan calculator with funding fee lets you test your own figures.
When the refinance is the weaker choice
Now compare an unsecured loan: $24,000 at an example 9% over 15 years is about $243 a month, with no funding fee and no change to your mortgage. If your existing loan sits at, say, 3.25% with a payment near $1,219, refinancing reprices the entire balance to 6.5% and the payment jumps by about $766 to fund a $24,000 system. In that case the separate loan is almost certainly cheaper, even at a higher rate. The refinance wins mainly when your current rate is close to today’s, or when you want to consolidate other debt in the same transaction.
Check the tax credit
Do not assume a federal credit lowers the cost. Under legislation enacted in 2025, the residential clean energy credit was set to end for expenditures after December 31, 2025. Review current IRS guidance and talk to a tax professional before you rely on it.
Broker vs Direct Lender: Comparison Table for Solar-Friendly VA Financing
Veterans United is a strong VA specialist with a polished process, and Rocket has built one of the smoothest online application flows in the business. The difference here is credit flexibility and choice, not speed. A broker with hundreds of wholesale lenders has more leverage, not less, because it can move your file to whichever source fits your solar plan. Duane Buziak is ranked #114 nationally in the Scotsman Guide’s Top Originators, and NoTouch Credit Pull gives you a digital, no-hard-pull start. For a deeper side-by-side, see this comparison of VA Loans Pro vs. Veterans United. The table below reflects typical structures as of publication; confirm current figures with each company.
| Provider | FICO Min | Lender Type | Loan Shelf | Fees | Pre-Approval Method | Cash-Out / Solar Flexibility |
|---|---|---|---|---|---|---|
| VA Loans Pro by Duane Buziak | 500 (program-dependent) | Independent broker | 500+ wholesale lenders | Broker-negotiated, shop-able | NoTouch Credit Pull (soft pull) | Cash-out and EEM options compared across sources |
| Veterans United | 620 | Direct lender | Single VA-specialty shelf | Typically includes an origination fee; confirm current | Standard application process | Limited to its own product set |
| Rocket Mortgage | Varies; no public VA-specific floor | Direct lender | Single product shelf | Varies by product | Hard pull before real numbers | Limited to its own product set |
| Movement Mortgage | 580 (VA) | Direct lender | Single shelf | Varies by product | Full application, hard pull at application | Limited to its own product set |
Fees are never identical across files, so treat the Fees column as a description of how each model works, not a promise of what you will pay.
Checking Your Options Without a Credit Hit
NoTouch Credit Pull is VA Loans Pro by Duane Buziak’s soft credit pull mortgage review: it estimates your qualifying range without a hard inquiry, so your score is not affected the way it is by a standard pre-approval. It works for a purchase or a cash-out refinance, so you can see whether solar financing is realistic before committing. It is a true mortgage pre approval without hard pull, and a hard inquiry comes only later, when you decide to move forward. To see where the soft pull fits in the bigger picture, read how to complete the VA loan pre-approval process.
Duane Buziak, a soft pull mortgage broker licensed to serve veterans in Virginia, Florida, Tennessee, and Georgia, recommends this sequence:
- Confirm your Certificate of Eligibility and check your service-connected disability rating for fee exemption.
- Collect solar quotes in writing, including whether the system is owned, leased, or a PPA, and any lien or UCC filing.
- Send the contract to your broker before you sign.
- Compare wholesale options for purchase, cash-out refinance, or an energy efficiency add-on.
Local rules also shape the numbers. In Florida, Florida Statute 193.624 provides that the added assessed value from a renewable energy source device is exempt from property tax, so panels should not raise your tax bill for that value. As of this writing the provision is in force, but confirm current terms with your county property appraiser. Virginia, Tennessee, and Georgia each have their own net metering and incentive rules, so check your state and utility before you run the savings math.
Solar Panels With a VA Loan: 8 Common Questions
Can I use a VA loan to buy a home with solar panels?
Yes, if the system is owned by the seller and transfers with the home, it is part of the property and the VA appraisal. Leased and PPA systems need separate review.
Does the VA finance solar panels directly?
No, the VA only guarantees loans made by private companies. Which solar structures you can use depends on the company writing your loan.
Can I add solar in a VA refinance?
Yes, through a cash-out refinance or, within VA limits, an energy efficiency improvement added to the loan. Confirm the current limits in the VA Lender’s Handbook.
Does a VA IRRRL cover solar?
Only in limited cases. An IRRRL is a streamlined rate reduction, and any energy improvement it includes is capped, so ask your broker what applies to your file.
Are leased panels a problem for VA approval?
They can complicate it. Because you do not own the equipment, appraisal and underwriting treatment varies, and the lease payment may be counted.
Do panels raise the appraisal value?
Possibly, but not by a guaranteed amount. The appraiser relies on market evidence, which may be less than the installed cost.
Is there a VA funding fee on energy improvements?
Yes, the fee applies to the full loan amount including financed improvements, unless you are exempt. As of 2026, check the VA funding fee table for current rates.
Can I get a solar-related VA loan with a 500 FICO?
It may be possible through wholesale programs that work down to 500 FICO, but approval is never guaranteed. Equity, income, and the loan type affect the outcome.
Start With Your Entitlement, Equity, and Credit, Not the Solar Quote
The best path for solar panels with a VA loan depends on three things: how much entitlement you have, how much equity you hold, and where your credit stands. Run those first, then decide on a system. Start with the NoTouch Credit Pull at VA Loans Pro by Duane Buziak, and bring the written quote with you. Learn more about our services
Disclaimer: This article is for general information and is not financial, tax, or legal advice. Rates, fees, and VA program rules are subject to change, and nothing here is a rate quote or a guarantee of approval. Consult a licensed professional about your situation. Duane Buziak, NMLS #1110647; Coast2Coast Mortgage LLC, NMLS #376205. Equal Housing Opportunity.
About the author: Duane Buziak, NMLS #1110647, is the founder of VA Loans Pro by Duane Buziak, a Scotsman Guide Top Originator (#114 nationally) with more than 1,400 five-star reviews. He serves veterans and active-duty buyers across Virginia, Florida, Tennessee, and Georgia. Read more on the About page.