Solar Financing in Ontario: Loans, Leases and What to Watch For

Solar financing in Ontario usually comes down to four choices: paying cash, borrowing against your home (a home equity line of credit or mortgage), taking an installer or dealer loan, or signing a lease or power purchase agreement. For most homeowners, cash or low-rate secured borrowing is cheapest, because financing costs can add thousands of dollars and stretch a 10–15 year solar payback past 20 years.

This guide compares the options with worked examples, explains what to look for in a lease, and lists the red flags that come up in Ontario solar sales.

Solar financing in Ontario: what does borrowing cost?

A typical installed cost in 2026 is roughly $2.50–$3.50 per watt before incentives, so an 8 kW system costs about $20,000–$28,000. Simple payback for a paid-in-cash system is often 10–15 years or more, depending on your usage, rate plan and incentives. Interest changes that picture.

The table uses a $24,000 system and illustrative interest rates. Actual rates depend on your credit and lender.

Financing	Term	Monthly payment	Total interest
Cash	n/a	n/a	$0 (but lost investment return)
Secured borrowing at 5.5% (e.g., home equity line, amortized)	10 years	~$260	~$7,300
Loan at 7%	10 years	~$279	~$9,400
Loan at 9%	10 years	~$304	~$12,500

For comparison, an 8 kW system producing about 9,200 kWh a year might offset roughly $1,100–$1,500 of electricity annually on net metering (estimate; depends on your rate plan and how much you use versus export). That is $90–$125 a month, well below the loan payments above. Financed solar is rarely cash-flow positive in the early years in Ontario. That does not make it a bad decision, but it should be a deliberate one.

Model your own system with our solar savings calculator.

Your financing options

Cash or savings

No interest and the fastest payback. The trade-off is the opportunity cost of that money, and the risk of tying up savings you might need for an emergency or a more urgent home repair.

Home equity line of credit (HELOC) or mortgage

Usually the lowest borrowing rate available to homeowners, because the loan is secured on your home. Variable rates can rise. Adding solar to a mortgage renewal or refinance spreads cost over a long term, which lowers payments but increases total interest. Talk to your lender about the actual cost.

Installer or dealer financing

Convenient and often promoted with low advertised rates or "no payments for 12 months". Ask:

• What is the annual percentage rate and the total cost of borrowing?
• Is the cash price higher if I take the promotional rate? A "dealer fee" built into the price can make a low rate expensive.
• Are there prepayment penalties?
• Is any security interest registered against my home?

Solar leases and power purchase agreements

With a lease, a company owns the panels on your roof and you pay a monthly fee. With a power purchase agreement (PPA), you pay for the electricity the system produces at a set rate. Both reduce upfront cost, but:

• you usually do not own the system and may not receive incentives or credits directly;
• payments often escalate each year;
• terms commonly run 15–25 years;
• selling your home can be complicated if the buyer must take over the contract or you must buy it out;
• you need to understand how the arrangement works with your local distribution company's net metering or connection agreement.

Caution: Ontario has had serious problems with rental and financing contracts for home equipment, including notices of security interest (NOSIs) registered against homes. The province passed legislation restricting NOSIs on consumer goods. Before signing any lease, ask exactly what will be registered against your property, and check current consumer protection rules on ontario.ca (opens in a new tab).

Federal and municipal loans

The federal Canada Greener Homes Loan, which offered interest-free financing, closed to new applications in fall 2025. Some Ontario municipalities offer or have offered low-interest property tax loans for energy upgrades; whether solar is eligible varies by program. See our guide to municipal home energy loans and our wider guide to financing home energy upgrades.

Rebate or net metering: decide before you finance

According to Save on Energy, the Home Renovation Savings Program has offered up to $10,000 combined for rooftop solar plus battery storage. But systems that receive this rebate operate as load displacement and cannot enrol in net metering for the life of the system, so exported electricity is not credited.

This matters for financing. A rebate reduces what you borrow, but losing export credits reduces your savings for 25 years or more. Our solar rebate vs net metering comparison works through an example. Confirm current program rules on saveonenergy.ca (opens in a new tab) before you sign.

Red flags in solar sales and financing

• Pressure to sign today, often with a "limited-time" government program pitch.
• Claims of affiliation with the Government of Ontario, Save on Energy, the IESO or your utility. Installers are private businesses.
• Savings estimates that assume rising electricity prices without saying so, or that ignore delivery charges and the rebate trade-off.
• Monthly payments quoted without the total cost of borrowing.
• No clear ownership terms, or vague answers about liens and what happens on sale.
• Door-to-door sales that skip a site visit or shading analysis.

Ontario's Consumer Protection Act gives a 10-day cooling-off period for many agreements signed at home. Our door-to-door energy scams guide explains your rights.

Solar financing checklist

1. Get a cash price from at least two installers before discussing financing. See choosing a solar installer.
2. Ask your bank or credit union for a secured borrowing rate to compare.
3. Calculate the total cost of borrowing, not just the monthly payment.
4. Decide between the HRS rebate and net metering before finalizing system size.
5. For leases or PPAs, get the buyout schedule, escalation rate and sale-of-home terms in writing.
6. Ask what will be registered against your property title.
7. Confirm ESA permit and utility connection agreement responsibilities.

Frequently asked questions

Is it worth financing solar panels in Ontario?

It can be if the interest rate is low and you plan to stay in the home long enough to recover the cost. At higher interest rates, payback can stretch beyond 20 years, so compare carefully. Our solar hub explains the basics.

Do solar panels increase home value in Ontario?

Owned systems with good documentation may appeal to some buyers, but there is limited reliable Ontario data on resale value. Leased systems can complicate a sale.

Can I pay off a solar loan early?

Many loans allow it; some charge penalties. Ask before signing, and get the terms in writing.

What happens to a solar lease if I sell my house?

Typically the buyer must qualify to take over the lease, or you must buy out the system. Some contracts require removal. Read the transfer terms carefully before signing.