Solar Loan Calculator

A solar loan turns an equipment price into a long series of monthly payments. This calculator uses the financed principal, annual percentage rate, and term to expose the payment and total interest. It also compares a starting lease payment with annual escalation over the same period.

The standard amortization formula uses monthly rate r and number of payments n. A zero-interest loan simply divides principal by months. Down payment is subtracted before the payment calculation.

Total loan cost adds the down payment and all scheduled payments. It does not assume a tax credit is used for a re-amortization; enter any principal reduction only after confirming the lender's terms.

The lease comparison compounds the entered monthly lease payment by its annual escalator. Buying may include ownership benefits and maintenance risk, while a lease can include service but complicate a home sale.

Assumptions and edge cases

The formula assumes a fixed rate, equal monthly payments, monthly compounding, and no prepayment, origination charge, or mid-term re-amortization. Real solar loans often break at least one. A zero-percent product divides principal by months rather than dividing by zero. Combination loans assume a lump-sum principal reduction near month 16 and re-amortize to a higher payment if it is never made, which this model does not represent. Dealer fees are normally financed, so principal can exceed the cash price by 10 to 30 percent. The lease side compounds one escalator annually and excludes buyout and transfer.

Worked example

Financing $24,000 for 15 years at 6.5% produces a payment near $209 per month and roughly $13,600 of interest over 180 payments.

Second worked example

A second case shows why the advertised rate is not the comparison. Two proposals cover the same $24,000 cash price. Offer A is 3.99% for 20 years but finances a 25 percent dealer fee, so principal is $32,000, the payment about $194, and the total of payments roughly $46,500. Offer B is 8.49% for 15 years on the $24,000 cash price with no fee: payment about $236, total roughly $42,500. The lower rate and lower payment cost about $4,000 more, because the fee was financed and the term ran five years longer.

How to read the result

Compare the cash price, financed principal, APR, dealer fee, prepayment terms, and total of payments. A lower advertised APR can cost more when it requires a large dealer fee.

Judge an offer on three ratios, not the payment. Financed principal divided by cash price above about 1.15 means a dealer fee is doing the work the interest rate appears to be doing. Total of payments divided by cash price under 1.4 is competitive for a 15-year term; above 1.9 justifies pricing a home equity product instead. And when the payment exceeds the electricity bill it replaces by more than roughly 25 percent, the project is cash-flow negative for its whole term.

Planning inputs are deliberately editable because two homes in the same state can have different tariffs, roof conditions, equipment, and operating schedules. Save a scenario with “Copy link,” then change one assumption at a time. This makes the result useful for comparing decisions without implying false precision.

Formulas and defaults are documented in our data method. The principal references for this page are:

1. NREL — PVWatts Calculator documentation (2025) — Production modeling, array orientation, and system-loss context.
2. EIA — Electric Power Monthly, Table 5.6.A (2024 annual) — Residential electricity price benchmarks by state.
3. U.S. Department of Energy — Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics (accessed methodology, 2025) — Background only; 2026 eligibility is never assumed.
4. U.S. Department of Energy, Energy Saver — Homeowner's Guide to Going Solar (2025) — Cash, loan, lease, and PPA comparison.
5. NREL — U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks (2024) — Cash-price benchmark for spotting an inflated principal.

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