Is 0% finance really 0%?

The interest is 0% — but the system price is often 10-15% higher than the cash price. The 'cost' of 0% finance is baked into the product price. Always compare: cash price vs financed price from the SAME installer.

Should I use savings or borrow?

If your savings earn less than 8% return (most do): use savings for solar. Solar returns 8-15% annually — better than almost any savings account or ISA.

Most personal loans allow early repayment with no penalty. Installer finance: check terms — some charge early settlement fees. Mortgage add-on: early repayment usually fine (check with lender).

Solar Finance: Which Saves Most?

By Home Solar Guide Team|Updated 19 March 2026|money

Independently written | Evidence-based | Sources cited

Solar finance compared — Cash saves most. 0% finance costs 10-15% more. Loan at 7% still profitable.

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What is the best way to finance solar panels?

Solar panel finance options compared (4kW system): OPTION A — CASH (£7,000): Total cost: £7,000. Total savings (25yr): £18,000. Net profit: £11,000. Best option if you have the capital. OPTION B — PERSONAL LOAN 7% APR, 5 years (£7,000): Monthly payment: £139. Total repaid: £8,340. Total savings: £18,000. Net profit: £9,660. £1,340 less than cash but still hugely profitable. OPTION C — INSTALLER 0% FINANCE, 5 years (£8,000*): *0% finance often means a higher system price (10-15% markup). Monthly payment: £133. Total repaid: £8,000. Total savings: £18,000. Net profit: £10,000. Compare the SYSTEM PRICE, not the interest rate. OPTION D — GREEN MORTGAGE ADD-ON (£7,000 at 3.5%): Added to mortgage over 25 years. Monthly: £35. Total repaid: £10,500. Total savings: £18,000. Net profit: £7,500. Lowest monthly cost but highest total interest. KEY FINDING: Cash is always cheapest. But ALL options generate positive returns. Even a 10% APR loan on solar panels earns more than it costs. Sources: Bank of England base rate (bankofengland.co.uk), comparison site loan rates, installer finance terms.

Frequently Asked Questions

Related: Home Heating Systems

Solar panels are most powerful when combined with an efficient heating system. Heat pumps use solar-generated electricity to heat your home at 300-400% efficiency — making them the ideal partner for solar.

heat pump running costs in the UK

Heat pumps use electricity at 300-400% efficiency, making them ideal partners for solar.

From our sister site Home Heat Pump Guide