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Fact Checked
Update date 23.04.2025
Solar loans in Canada are for the installation of solar panels and other energy-efficient upgrades for residential and multi-unit properties. The Canada Greener Homes Loan (CGHL) is the main one, offering interest-free financing up to $40,000 over 10 years to eligible homeowners for solar projects. This unsecured loan is part of a larger federal program to promote clean energy and can be combined with grants and energy advisor evaluations. But not all applicants qualify – only homeowners living in the property as their primary residence are eligible, and a pre-retrofit energy assessment is required. Approved funding must go towards eligible upgrades like solar panels or insulation upgrades, not general renovations. Other financing options include municipal programs like Toronto’s HELP, low-interest bank loans for green upgrades, and third-party models like solar leases or power purchase agreements.
Requirements and Conditions
Requirements
Applicants must be Canadian citizens, permanent residents, or non-permanent residents legally authorized to work in Canada.
Borrowers must own and reside in the home that will receive the solar installation. For the CGHL program, the property must be the borrower’s primary residence.
Applicants must be at least 18 or 19 years old, depending on their province or territory.
A valid bank account is required for receiving loan funds and making repayments.
Lenders typically require a credit check. A good credit history improves approval chances. For the CGHL program, applicants must not be in insolvency proceedings or formal debt repayment plans.
Proof of stable income or financial stability may be required. Lenders may also consider savings or home equity.
The property must meet technical criteria for solar installation. For the CGHL program, retrofits must be pre-approved through an energy evaluation.
Loan funds must be used for solar or energy-efficient upgrades. For the CGHL program, only pre-approved retrofits listed in the application are eligible.
Applicants may need to provide documentation such as ID, utility bills, and contractor quotes.
For the CGHL program, the retrofit work must not begin before loan approval.
Conditions
Loan amounts depend on the borrower’s profile, type of financing, and scope of the project. For the CGHL program, loan amounts range from $5,000 to $40,000.
Interest rates vary by lender and borrower profile. Solar and energy-efficiency loans usually offer reduced rates. The CGHL program offers interest-free solar loans.
Loan terms differ by lender. For the CGHL program, the repayment term is up to 10 years.
Most lenders offer monthly repayment schedules. Some also allow prepayments or lump-sum payments without penalties.
Loan types may include secured or unsecured options. The CGHL program offers unsecured personal loans not tied to home equity or mortgages.
Some lenders provide solar installation with low or no upfront cost, repaid through leasing or energy savings over time.
For the CGHL program, part of the loan may be advanced upfront for contractor deposits. The rest is disbursed after post-retrofit verification.
Solar financing in Canada is for the transition to clean energy through programs like the Canada Greener Homes Loan, which offers interest-free financing for solar panel installations and energy-efficient retrofits. Along with CGHL, options like solar leases, municipal loans, and lump sum financing address different financial needs. These tools are for individual homeowners and larger-scale projects, including those led by Indigenous groups, to access renewable energy solutions. With support from service organizations and third-party developers, solar financing is for long-term savings and environmental benefits, and a more sustainable approach to home and business energy use.
FAQ
What is a solar lease?
A solar lease is an arrangement where a homeowner can use a solar system on their property without owning it outright. In contrast, a loan program involves borrowing funds, often with specified loan details maximum, to purchase and install a solar system. The choice between a lease and a loan depends on individual preferences, financial circumstances, and eligibility as a Canadian homeowner.
Will the Canada Greener Homes Loan show up on my credit report?
Yes, the Canada Greener Homes Loan will appear on your credit report. Like most government-backed or institutional loans, your borrowing and repayment activity is reported to the credit bureau, meaning it can impact your credit score positively if managed well — or negatively if payments are missed.
Can I get part of the Canada Greener Homes Loan in advance to pay contractors?
Yes, once approved, you can receive up to 15% of the Canada Greener Homes Loan upfront if your contractor requires a deposit. This advance is only available for retrofits that require a deposit, and you'll need to submit contractor quotes and the required deposit amounts when applying. If your home is located in the North or is off-grid, the upfront advance can be increased to 25%. The remaining loan amount is provided after the retrofit is completed and verified through a post-retrofit evaluation.
