Solar & battery
Solar Financing Calculator
Compares financing options, where the total cost rather than the payment is the comparison.
Result
Simple payback, with no discounting and no financing cost. For anything large or long, money now is worth more than money later and a lender will want interest, both of which make the real return lower than this.
Get a Free Business AuditHow the calculation works
Each option's monthly payment and total cost over its term, including any fee built into the system price, compared against the cash price and the expected bill saving. The payment is what the customer feels and the total cost is what they pay, and the two rank options differently.
What moves the number
- Rate, term and any fee built into the price.
- Total cost over the term, not just the payment.
- Whether the structure assumes an incentive is received.
- The bill saving the payment is set against.
Where this one goes wrong
Comparing options on monthly payment alone favours the longest term, which is also the most expensive in total, and a proposal presenting only the payment is presenting the least informative figure. Show total cost. Dealer fees built into the system price are the other thing to surface, since a low rate funded by a higher cash price is not a cheaper deal and the comparison against a cash purchase elsewhere reveals it.
Before you quote
- Compare total cost over the term, not just the payment.
- Surface any fee built into the system price.
- Check whether the structure assumes an incentive is received.
Questions
About this calculator
Why not compare financing on monthly payment?
Because it favours the longest term, which is the most expensive in total. A proposal showing only the payment is showing the least informative figure, and total cost over the term is what the customer actually pays.
What is a dealer fee?
A cost built into the system price rather than disclosed as a rate, which is how low advertised rates are funded. A low rate with a higher cash price is not a cheaper deal, and comparing against a cash purchase elsewhere reveals it.
Should the payment be below the bill saving?
If it is not, the system costs money monthly whatever the payback calculation says. That comparison is the clearest test of a financed proposal and it is frequently the one the proposal does not make.
The formula
payback = cost / (monthly gain - monthly running cost)
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How to use this calculator
- Up-front cost ($). Enter your own figure; the page starts at $12,000.
- Extra gross profit per month ($). Enter your own figure; the page starts at $1,400.
- Extra running cost per month ($). Enter your own figure; the page starts at $220.
- Period to judge it over. Enter your own figure; the page starts at 36.
The result updates as you type, so you can try a figure, see what it does to payback period, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Up-front cost | $12,000 |
| Extra gross profit per month | $1,400 |
| Extra running cost per month | $220 |
| Period to judge it over | 36 |
What comes out
| Result | Value |
|---|---|
| Payback period main result | 10.2 |
| Net gain per month | $1,180 |
| Net return over the period | $30,480 |
| Return on investment | 254% |
It pays for itself in 10.2 months and returns $30,480 over 36 months, a 254% return.
How sensitive the answer is
Holding everything else steady and changing only up-front cost, this is what happens to payback period. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Up-front cost ($) | Payback period |
|---|---|
| $6,000 | 5.1 |
| $9,000 | 7.6 |
| $12,000 example above | 10.2 |
| $18,000 | 15.3 |
| $24,000 | 20.3 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Up-front cost ($)
- A money amount, starting at $12,000.
- Extra gross profit per month ($)
- A money amount, starting at $1,400.
- Extra running cost per month ($)
- A money amount, starting at $220.
- Period to judge it over
- A number, between 0 and 240, starting at 36.
What the results tell you
| Result | What it is |
|---|---|
| Payback period | The headline result. A decimal figure. |
| Net gain per month | A money figure. |
| Net return over the period | A money figure. |
| Return on investment | A percentage. |
A design still needs a site visit
Output and sizing figures use the assumptions you enter, not measured irradiance, shading or roof orientation at your address. Real production depends on all three, plus inverter behaviour and local interconnection rules.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.