Solar Loan Calculator
Estimate monthly payment, total interest, and year-1 cash flow on a financed solar system. Free solar loan calculator using current 2026 U.S. lender APRs.
Prepared by the Solar Calculator HQ editorial team. Review our formula, source and limitation standards.
Solar Loan Calculator
Annual amortisation schedule
| Year | Interest | Principal | Balance |
|---|---|---|---|
| 1 | $1,405 | $932 | $17,068 |
| 2 | $1,327 | $1,010 | $16,058 |
| 3 | $1,244 | $1,093 | $14,965 |
| 4 | $1,153 | $1,184 | $13,781 |
| 5 | $1,055 | $1,282 | $12,499 |
| 6 | $949 | $1,388 | $11,110 |
| 7 | $833 | $1,503 | $9,607 |
| 8 | $709 | $1,628 | $7,979 |
| 9 | $574 | $1,763 | $6,216 |
| 10 | $428 | $1,909 | $4,306 |
| 11 | $269 | $2,067 | $2,239 |
| 12 | $98 | $2,239 | $0 |
How to use this calculator
Enter four numbers and the calculator returns your monthly payment, total paid over the term, total interest, and year-1 net monthly cash flow (savings minus payment):
- Loan amount — the financed cash-equivalent cost, including any dealer fee. Do not accept a 2026 payment schedule that assumes a later homeowner Section 25D lump sum. EnergySage’s H2 2025 median implies about $17,430 for a 7 kW cash system at $2.49/W before roof-specific adders; compare that with the total amount financed.
- APR — the annualised rate from your loan estimate. Q1 2026 ranges: GoodLeap 6.49-8.99%, Sunlight Financial 5.99-9.99%, Mosaic 6.99-9.49%, Dividend 7.49-9.99%, local credit unions 5.49-8.49% (often the best deal for owner-occupants with 720+ FICO).
- Term — most solar loans are 10, 12, 15, 20, or 25 years. Shorter = less total interest. Longer = lower monthly payment. Use 12 years for the conservative middle of the market.
- Year-1 monthly bill savings — the average dollars your solar offsets per month in year one. Compute as: annual production × your retail rate ÷ 12. Example: a 7 kW system in Phoenix produces 12,000 kWh × $0.13 = $1,560/yr = $130/mo.
How the math works
Solar loans use standard amortising-loan math (the same formula as a mortgage or auto loan):
monthly_payment = P × r / (1 - (1 + r)^-n)
where:
P = principal (financed amount, in dollars)
r = APR ÷ 12 (monthly rate, decimal)
n = term in monthsWorked example for the en-us defaults ($18,000, 7.99% APR, 12 years):
- r = 0.0799 / 12 = 0.006658
- n = 144 months
- monthly = 18,000 × 0.006658 / (1 - 1.006658^-144) = $194.81/month
- Total paid = 194.81 × 144 = $28,053
- Total interest = $28,053 - $18,000 = $10,053
Net cash flow = bill savings - payment. With the default $133/mo savings, net = $133 - $195 = -$62/mo year 1, which improves to roughly $20/mo positive by year 8 once retail rates have escalated 25-30% above today’s level.
What “positive cash flow” actually means in 2026
Most marketers claim solar produces “positive cash flow from day one.” That is true in California (PG&E Tier 4), Hawaii, Massachusetts, and Connecticut at current 2026 rates, where retail electricity is high enough that even a 25-year loan at 7.99% leaves $30-100/mo positive in year one. It is not generally true in Idaho, Washington, Louisiana, or Tennessee where retail rates sit at $0.10-0.13/kWh and a financed system shows -$40 to -$80/mo until year 5-7 when rate escalation crosses the loan payment line.
The honest framing is cash flow, not a promised tax windfall: compare cumulative bill savings with every loan payment, dealer fee, maintenance cost and verified incentive. A financed system may or may not become cumulative-positive within its useful life, especially where export compensation is low.
Loan vs. cash vs. lease — quick comparison
| Option | Up-front cost | 25-year net | Break-even | Best for |
|---|---|---|---|---|
| Cash | $18,000 | $34,000+ savings | 7-8 yrs | High-tax-bracket owners with cash on hand |
| Loan (12-yr, 7.99%) | $0 down | $24,000 savings | 9-11 yrs | Owners who want to keep cash deployed elsewhere |
| Loan (25-yr, 5.99%) | $0 down | $11,000 savings | 17 yrs | Cash-flow-first buyers with thin margins |
| Lease / PPA | $0 down | $4,000-7,000 savings | n/a (no equity) | Renters of equity, not owners |
The owned-loan structure typically beats a 25-year lease by $15,000-20,000 in lifetime value because the homeowner keeps the ITC, the depreciation (commercial only), and the post-loan free electricity for years 13-25.
What changes the loan economics
Helps (cheaper loan, faster cash-flow positive)
- Credit-union loan or HELOC at 5.5-6.5% rather than dealer-aggregator 7.5-9% products
- No dealer fee — pay attention to APR + dealer fee, not just APR
- Apply the ITC promptly as a re-amortisation principal payment (most lenders give 12-18 months)
- Battery + TOU rate to capture peak-rate arbitrage in a NEM 3.0 state
- State property-tax exemption (38 states + DC; see DSIRE for your state)
Hurts (more expensive loan, slower payback)
- Dealer-fee buy-downs — a “1.99% APR” loan with a 30% dealer fee on a $20k system effectively costs the same as a 7-8% loan with no fee
- Failure to apply the ITC as a re-amortisation principal payment within 18 months — payment stays elevated for the full 25-year term
- Demand charges or NEM 3.0 export-only credit that cuts year-1 savings by 30-50%
- A roof that needs replacement within 10 years — re-roofing forces panel removal/reinstall, typically $2,000-4,000
Pair this with the payback calculator, system cost calculator, and ROI calculator
The loan calculator answers “what does the monthly payment look like?” Payback answers “when do I break even on the net cost?” ROI answers “what’s my total lifetime return?” Cost gives you the up-front capital to plug in. Run all four — and verify your APR with at least three lenders (one credit union, one bank, one solar-aggregator) before signing.
Sources
- EnergySage Solar Marketplace Report H2 2025 — installed cost, financing mix, APR ranges
- DSIRE database (NC State) — state and local incentives, including loan programs
- Consumer Financial Protection Bureau — Solar Loan Considerations — dealer-fee disclosure rules
- IRS Form 5695 instructions — Residential Clean Energy Credit (ITC) mechanics
- SEIA / Wood Mackenzie U.S. Solar Market Insight — financing-product market share
Frequently asked questions
What APR should I expect on a 2026 U.S. solar loan?
Is the federal Investment Tax Credit (ITC) financed or paid back to the loan?
Should I take a solar loan or pay cash?
How does the loan term affect my total interest paid?
Is solar loan interest tax-deductible in the U.S.?
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