Solar contract guide
What is a dealer fee on a solar loan?
Short answer
A dealer fee is a charge the lender collects for offering a lower-looking interest rate, and it's usually rolled into your loan balance instead of shown as its own line. The federal Consumer Financial Protection Bureau found these fees typically run 10 to 30 percent of the system's cash price.
How the fee works
When you finance solar, the installer often offers a loan with a low advertised rate. To make that rate possible, the lender charges the installer a fee. The installer then raises the price of the system to cover it. You end up borrowing more than the system's cash price, and you pay interest on the difference for the life of the loan.
Because the fee is built into the amount you borrow, it usually doesn't appear as a separate charge, and it may not be reflected in the interest rate you were quoted.
What regulators found
- In 2024 the Consumer Financial Protection Bureau reported that lenders were adding markup fees that are not disclosed to consumers and are included in the loan amount.
- The CFPB said these fees often raise loan costs by 30 percent or more above the cash price.
- The Minnesota Attorney General sued several solar lenders in 2024, alleging hidden fees raised costs to borrowers by 15 to 30 percent.
How to check your own loan
- Find your loan agreement. Look for the line called amount financed.
- Find the price you were told for the system, or the cash price on your solar agreement or proposal.
- Compare the two. A big gap between the cash price and the amount financed is often where a dealer fee sits.
- Check whether anyone explained that difference to you before you signed.
Why it matters
A dealer fee isn't automatically illegal, and every loan is different. What matters is what you were told, what you signed, and whether the cost was explained. That's exactly what a contract review compares.