Solar & battery
Solar Financing Payment Calculator
Works the payment under a financing structure, where step-ups need checking.
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
The scheduled payment under the structure offered, including any initial period at a lower amount and any step-up afterwards. Some structures assume an incentive is received and applied to the balance, with the payment rising if it is not, so the schedule has a condition attached.
What moves the number
- Scheduled payment and any step-up point.
- Whether the structure assumes an incentive is applied.
- Rate and term.
- What happens if the assumed incentive does not arrive.
Where this one goes wrong
A payment that rises partway through the term because an assumed incentive was not received and applied is the structure that causes the most complaints, because the customer budgeted for the low figure and did not understand the condition. Confirm whether any incentive assumed is actually available to that customer and whether they will have the tax position to use it, because the step-up is otherwise a surprise built into the agreement.
Before you quote
- Identify any step-up and what triggers it.
- Verify the customer can actually use any assumed incentive.
- Budget on the higher payment, not the introductory one.
Questions
About this calculator
Why would my solar payment increase?
Some structures assume an incentive is received and applied to the balance, with the payment stepping up if it is not. The customer budgeted for the lower figure and the condition was in the agreement, which is why these cause complaints.
What should I check before accepting a structure?
Whether there is a step-up, what triggers it, and whether you can actually use any incentive the structure assumes. A credit requires tax liability to offset, and a household without it will see the higher payment.
Which payment should I budget on?
The higher one, since the lower figure is conditional. Budgeting on the introductory payment and hoping the condition is met puts the household's position at the mercy of a tax outcome it may not control.
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.