About the Solar Loan Calculator
This solar loan calculator shows whether financing a home solar system pays for itself. Enter the system price, any down payment, the loan rate and term, and how much the panels should cut your electric bill each month. It calculates the monthly loan payment, total interest and how your savings compare with the payment year by year — allowing for electricity prices that rise over time and panels that slowly lose output.
It also models two features that surprise many solar borrowers. Dealer fees (which the CFPB found can raise the loan principal by 30% or more above the cash price) are added to the amount you borrow, so a “3.99%” loan can cost more than a 7% loan without one. And many solar loans set the first 12–18 months of payments as if you will make a large lump-sum paydown — historically the 30% federal tax credit. When the paydown arrives the loan re-amortizes; if it never comes, the payment jumps. The calculator shows both payments side by side.
Note that the US federal Residential Clean Energy Credit ended for systems installed after December 31, 2025, so plan any paydown around money you are certain to have, such as a state rebate or savings. Bill savings are your estimate of the reduction in your utility bill; your installer’s production estimate and your utility’s net-metering rules determine the real figure.
With the default inputs, the monthly loan payment is $193.67. Change any value above to recalculate instantly.
How to use the solar loan calculator
- 1Enter the system’s cash price and any down payment.
- 2Enter the loan rate, term and any dealer fee shown in the loan documents.
- 3If the loan expects a lump-sum paydown, enter the amount and the month it is due.
- 4Enter your expected monthly electric bill savings, utility inflation and panel degradation.
- 5Compare the payment with your savings, and check both re-amortized payments if you plan a paydown.
Formula and method
The loan amount grosses up the financed price for any dealer fee, because the lender pays the installer less than the face amount of the loan. With no planned paydown the payment is the standard level amortizing payment. With a planned paydown, the introductory payment is sized as if the paydown had already been made; after month M the remaining balance is re-amortized over the months left — either after subtracting the paydown (P₂) or, if you skip it, on the full balance (which gives the higher payment).
Bill savings start at your first-year monthly estimate and grow each year with utility price inflation, while panel degradation trims output slightly every year. Cumulative savings are compared with cumulative cash spent on the system (down payment, loan payments and the paydown) over 25 years or the loan term if longer. The break-even year is the first year from which total savings to date stay at or above the total paid to date for the rest of the horizon, so an early lead that a later lump-sum paydown wipes out does not count.
- r
- Monthly loan rate (APR ÷ 12)
- n
- Total number of monthly payments
- M
- Month by which the lump-sum paydown is expected
- S
- First-year monthly bill savings
- e
- Annual utility rate increase
- d
- Annual panel output degradation
Worked examples
$25,000 system, 6.99% for 20 years, $180/month savings
Borrowing $25,000 at 6.99% for 20 years costs $193.67 a month, about $13.67 more than the $180 the panels save at first. Savings rising 3% a year (less 0.5% degradation) catch up with cumulative payments in year 7, and over 25 years savings exceed everything paid by about $27,156.
“3.99%” loan with a 20% dealer fee and a $7,500 paydown at month 18
The 20% dealer fee turns a $30,000 system into a $37,500 loan. The first 18 payments of $158.19 assume a $7,500 paydown; if you make it the loan re-amortizes to $160.71, but if you don’t the payment jumps to $201.74 for the remaining 23½ years. Savings lead in year 1, but the $7,500 paydown at month 18 puts you behind until year 10.
$20,000 system, $5,000 down, 8.99% for 10 years
Financing $15,000 over 10 years costs $189.93 a month and $7,791.90 in interest. Counting the $5,000 down payment, savings catch up in year 13; once the loan is paid off, every year’s savings is pure gain, for about $37,664 net over 25 years.
Frequently asked questions
Is a solar loan worth it?+
It can be when your monthly bill savings are close to or above the loan payment and you will stay in the home long enough to pass the break-even year. Expensive electricity, full retail net metering and a low total loan cost (rate plus dealer fees) make solar loans pay off fastest.
What is solar loan re-amortization?+
Many solar loans set the early payments assuming you will prepay a lump sum, often by month 18. When you make the paydown, the lender recalculates the payment on the remaining balance over the remaining term. If you don’t, the payment is recalculated on the full balance and rises.
What is a solar dealer fee?+
A dealer fee is a charge the lender takes from the installer to offer a low advertised rate, which the CFPB found typically adds 10%–30% of the cash price and sometimes more than 50%. It is usually built into the system price you finance, so you pay interest on it — compare the total loan amount, not just the APR.
Can I still claim the 30% federal solar tax credit?+
Not for new home systems. The Residential Clean Energy Credit ended for expenditures made after December 31, 2025, and an expenditure is treated as made when installation is completed. State, local and utility incentives may still be available.
What happens to a solar loan if I sell my house?+
Secured solar loans or UCC fixture filings may need to be paid off at closing, and unsecured loans stay your personal debt. Some buyers will assume the loan, but plan on paying the balance from the sale proceeds.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.