Solar Loan Calculator (UK)
Free UK solar loan calculator. Estimate the monthly repayment, total interest, and year-1 net cash flow on a financed residential PV system using current 2026 lender APRs and Octopus SEG export pricing.
Solar Loan Calculator
Monthly payment
£99
Total paid over term
£11,844
Total interest
£4,344
Year-1 net monthly cash flow
-£13
Negative — loan exceeds savings (will improve as rates rise)
Annual amortisation schedule
| Year | Interest | Principal | Balance |
|---|---|---|---|
| 1 | £722 | £462 | £7,038 |
| 2 | £674 | £510 | £6,527 |
| 3 | £621 | £563 | £5,964 |
| 4 | £563 | £622 | £5,342 |
| 5 | £498 | £686 | £4,656 |
| 6 | £427 | £757 | £3,899 |
| 7 | £349 | £836 | £3,063 |
| 8 | £262 | £922 | £2,141 |
| 9 | £167 | £1,018 | £1,123 |
| 10 | £61 | £1,123 | £0 |
How to use this calculator
Enter four numbers and the calculator returns your monthly repayment, total paid over the term, total interest, and year-1 net monthly cash flow:
- Loan amount — the financed cost ex-VAT (zero-rated until 31 March 2027 per HMRC Notice 708/6). The default £7,500 reflects a Solar Energy UK / MCS-aligned 4 kW residential install at £1,800/kW. A 6 kW system with a 5 kWh battery typically lands around £11,000-£13,000.
- APR — the annualised rate from your loan agreement. 2026 ranges: Tesco Bank 7.9-9.9%, Hitachi Personal Finance 8.9-12.9%, M&S Bank 8.9-10.9%, building societies 7.5-9.5%, dealer 0% interest-free credit (subject to fee disclosure).
- Term — UK solar loans run 5-15 years. Five years minimises total interest; 10 years balances payment vs interest. Default 10 years.
- Year-1 monthly bill savings — annual self-consumed kWh × your retail rate ÷ 12 + monthly SEG export income. Energy Saving Trust’s average UK 4 kW system produces 3,800 kWh/year, of which 35-50% is self-consumed at the Ofgem cap rate of 27p/kWh and the remainder is exported at 15p/kWh under Octopus Outgoing.
How the math works
Standard amortising-loan formula (same as a mortgage or car finance agreement):
monthly_repayment = P × r / (1 - (1 + r)^-n)
where:
P = principal (financed amount, in pounds)
r = APR ÷ 12 (monthly rate, decimal)
n = term in monthsWorked example for the en-gb defaults (£7,500, 9.9% APR, 10 years):
- r = 0.099 / 12 = 0.00825
- n = 120 months
- monthly = 7,500 × 0.00825 / (1 - 1.00825^-120) = £98.61/month
- Total paid = 98.61 × 120 = £11,833
- Total interest = £11,833 - £7,500 = £4,333
Net cash flow = bill savings - repayment. With the default £86/mo savings, net = £86 - £99 = -£13/mo year 1, which crosses positive in year 4-5 once retail rates escalate 15-20% above the 2026 Ofgem cap.
UK loan economics by region (2026 reference)
Based on Energy Saving Trust regional generation data and Solar Energy UK 2026 figures, year-1 cash flow for a 4 kW system financed at £7,500 / 9.9% / 10-yr term:
| Region | Avg generation | Self-consumed savings | SEG income | Total monthly | Net vs £99 repayment |
|---|---|---|---|---|---|
| South East / London | 4,100 kWh | £62 | £26 | £88 | -£11 |
| South West (Devon/Cornwall) | 4,200 kWh | £64 | £27 | £91 | -£8 |
| Midlands | 3,800 kWh | £58 | £24 | £82 | -£17 |
| North West (Manchester) | 3,500 kWh | £53 | £22 | £75 | -£24 |
| North East (Newcastle) | 3,400 kWh | £52 | £21 | £73 | -£26 |
| Scotland (Edinburgh) | 3,300 kWh | £50 | £21 | £71 | -£28 |
| Northern Ireland | 3,400 kWh | £52 | £21 | £73 | -£26 |
| Wales (Cardiff) | 3,800 kWh | £58 | £24 | £82 | -£17 |
After 5 years of 4%/yr Ofgem cap escalation (a conservative reading of recent history), every region above is comfortably cash-flow positive.
Loan vs cash vs PPA — UK comparison
| Option | Up-front cost | 25-year net | Break-even | Best for |
|---|---|---|---|---|
| Cash | £7,500 | £14,000+ savings | 8-10 yrs | Owners with cash and 0% VAT timing aligned |
| Loan (10-yr, 9.9%) | £0 down | £9,500 savings | 12-13 yrs | Owners who’d rather invest cash elsewhere |
| Green mortgage top-up (5.5%, 25-yr) | Arrangement fee | £11,000 savings | 14-15 yrs | Owners with mortgage capacity and small fee tolerance |
| Rent-a-roof / PPA | £0 down | £2,000-4,000 savings | n/a (no equity) | Owners who want zero responsibility |
UK rent-a-roof schemes (Solar Plants, A Shade Greener, Solar Panels Direct) all but disappeared after the FiT closure in March 2019. The dominant 2026 model is owner-financed via MCS-certified installer.
What changes the loan economics
Helps
- Building society or green mortgage at 5.5-7.5% rather than 8.9-12.9% unsecured personal loan
- Battery storage to time-shift export (15p) vs Economy 7 night import (12-14p) — flips the savings model in your favour
- Octopus Outgoing Agile with battery + EV — peak export at 25-30p/kWh dwarfs Outgoing Fixed at 15p
- MCS + RECC certification keeps the install eligible for SEG and the 0% VAT zero-rate
Hurts
- Dealer 0% interest-free credit with a markup of £600-£1,200 vs cash price (often the cash-equivalent APR is 9-12%)
- Loss of the 0% VAT zero-rate if HMRC ends Notice 708/6 in April 2027 (currently scheduled to lapse)
- No smart meter — disqualifies you from SEG export payments
- DNO export limit — without G98/G99 commissioning at higher capacity, you may be capped at 3.68 kW export which constrains larger systems
Pair this with the payback calculator, system cost calculator, and ROI calculator
The loan calculator answers “what’s my monthly outgoing?” Payback answers “when does the system pay for itself?” Cost gives you the gross-quote target. Run all three before signing — and compare APRs at a credit union, a high-street bank, and an MCS installer’s preferred lender to see the full spread.
Sources
- Energy Saving Trust — Solar panels — generation by region, payback baseline
- MCS — Microgeneration Certification Scheme — installer certification, SEG eligibility
- Ofgem — Smart Export Guarantee — SEG regulatory framework
- HMRC Notice 708/6 — Energy-saving materials — 0% VAT zero-rate
- Solar Energy UK 2026 Market Outlook — installed cost benchmarks
- BS 7671:2018+A2:2022 IET Wiring Regulations — Section 712 PV installation requirements
Frequently asked questions
What APR should I expect on a 2026 UK solar loan?
Q1 2026 UK solar finance APRs range from 7.9% (Tesco Bank Home Improvement, Hitachi Personal Finance for top-tier credit) to 12.9% for average-credit borrowers. Sainsbury's Bank, M&S Bank, and TSB Personal Loan typically price 8.9-10.9% on £5,000-£25,000 unsecured loans. Octopus Energy and several MCS-certified installers offer 0% interest free credit for 12-24 months on smaller systems but the headline price is usually 8-12% higher than a cash quote — confirm the cash-equivalent APR.
How does the 0% VAT zero-rate interact with a financed solar install?
HMRC Notice 708/6 (extended through 31 March 2027) zero-rates VAT on residential PV, batteries, and energy-storage installations. Your installer should quote ex-VAT — the financed amount on a £7,500 cash quote is £7,500, not £9,000. Some lenders mistakenly add VAT back during finance pricing; double-check the Total Amount Payable on the loan agreement matches the cash quote × (1 + APR-equivalent over the term).
Should I take a UK solar loan or remortgage?
Remortgaging at a green-mortgage rate (Nationwide Green Reward, NatWest Green Mortgage, Halifax Green Living) typically beats an unsecured solar loan by 200-400 basis points in early 2026. A 5.5% green-mortgage top-up on £7,500 over 10 years costs about £80/month vs £93/month on an 8.9% unsecured loan — about £1,500 saved over the term. The trade-off: remortgaging puts the property at risk if you default, and arrangement fees of £999-£1,499 erode the savings on small balances.
What is the Smart Export Guarantee (SEG) and how does it affect cash flow?
The SEG, introduced January 2020 and regulated by Ofgem, requires licensed energy suppliers with 150,000+ domestic customers to offer export tariffs. Q1 2026 SEG rates: Octopus Outgoing Fixed 15.0p/kWh, EDF 5.0-12.0p/kWh, E.ON 5.5p/kWh, Scottish Power 12.0p/kWh, OVO 4.0p/kWh. Rates change quarterly. Smart-meter half-hourly readings are required. Octopus Outgoing Agile (variable, peak hours up to 30p) is best paired with battery + EV. SEG income directly improves loan cash-flow — model it separately from self-consumption savings.
Is solar loan interest tax-deductible in the UK?
No, not for owner-occupiers. UK tax law allows mortgage interest relief only on let property (and only at the basic rate via Section 24 since 2020). Personal solar loan interest is post-tax. The economic gain is the bill savings + SEG income, both tax-free up to the £1,000 trading allowance for SEG (per HMRC guidance). High SEG income above £1,000/yr from large export-heavy systems may need to be declared — rare for residential.