Solar Loan Dealer Fees: The Hidden 15-30% Markup Built Into Your APR
That "0.99% APR" solar loan isn't cheap money — it's an expensive system with the interest hidden in a dealer fee you're paying without knowing it.
Here's one of the most expensive things homeowners don't know about solar financing: the "low APR" loan is usually a trick, and you're paying for it.
## How the dealer fee works
Solar-specific lenders (GoodLeap, Mosaic, Sunlight, Dividend, etc.) offer installers a menu of loan products. A typical menu looks like:
| Advertised APR | Dealer fee the installer pays |
|---|---|
| 8.99% | 0% |
| 6.99% | ~7% |
| 3.99% | ~18% |
| 1.99% | ~27% |
| 0.99% | ~32% |
The "dealer fee" is what the lender charges the installer to offer you that lower rate. But installers don't eat that cost — **they roll it into your system price.**
## The math, made concrete
Say the real cost of your system is $23,500. The installer wants you on a "0.99% APR" loan because it sounds amazing. That loan carries a 32% dealer fee.
To net $23,500 after paying the 32% fee, the installer has to gross up the price:
$23,500 ÷ (1 - 0.32) = **$34,560**
So your "0.99% APR" loan is for $34,560 — an $11,060 markup over the real cost — and you'll pay 0.99% interest on the inflated balance.
Meanwhile, a homeowner who took the 8.99% APR (0% dealer fee) would finance the real $23,500. Even at the higher rate, they pay less total because the principal is $11,000 lower.
## The tell: cash price vs financed price
The single question that exposes this: **"What's your cash price for this exact system?"**
If the cash price is $23,500 but the financed price is $34,560, you've found a $11,060 dealer fee. A fair installer's cash and financed prices are within a few percent. A predatory one shows a huge gap.
Many installers will refuse to give a separate cash price, or claim "the price is the price." That refusal is your answer.
## What to do instead
1. **Get the cash price in writing.** Always.
2. **Finance through your own bank or credit union.** Local credit unions offer solar/home-improvement loans at 6-8% with NO dealer fee. You finance the real cash price, not the inflated one.
3. **Run the total-cost comparison**, not the monthly payment. A higher APR on a lower principal usually beats a teaser APR on an inflated principal.
## Real example from a quote I reviewed
A homeowner in Tampa was quoted $36,800 on a "1.49% APR" loan for a 9 kW system. Cash price, when I pushed: $25,200. The dealer fee was $11,600 — 32% of the loan. I connected them with a credit union at 6.49% financing the real $25,200. Their total cost over the loan dropped by roughly $9,000 even at the higher rate.
## Bottom line
There's no such thing as a 0.99% solar loan. There's only an expensive system with the interest hidden where you can't see it. Always get the cash price, always compare total cost, and finance the real number through your own lender when you can.
Got a financed solar quote? Send it to me and I'll calculate the embedded dealer fee for you. [reviewingsolar.com/upload](https://reviewingsolar.com/upload).
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