Solar & battery
Solar Loan Calculator
Works a solar loan, where the term choice trades payment against total interest.
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
Principal, rate and term produce the payment, total interest and total cost. Longer terms lower the payment and raise the total substantially, and on terms long enough to approach the equipment's life the loan can outlast components that will need replacing during it.
What moves the number
- Principal, rate and term.
- Total interest over the term.
- Whether the term exceeds component lives.
- Prepayment terms.
Where this one goes wrong
A loan term approaching or exceeding the inverter's expected life means financing a replacement before the original is paid for, which is worth noticing on very long terms. Compare the total interest across terms rather than just the payments, because the difference is frequently larger than customers expect. Prepayment terms matter too, since a borrower who may pay down early should check whether that is permitted without penalty.
Before you quote
- Compare total interest across terms, not just payments.
- Note whether the term exceeds component lives.
- Check prepayment terms before choosing a long term.
Questions
About this calculator
Is a longer term better?
It lowers the payment and raises the total cost substantially. On very long terms it can also mean financing an inverter replacement before the original is paid for, which is worth noticing before signing rather than discovering later.
How much does the term change the total?
More than customers generally expect, since interest accrues over the whole period. Comparing total interest across terms rather than comparing payments is what makes the trade visible, and the payment comparison alone always favours the longest term.
Can I pay a solar loan off early?
It depends on the terms, and prepayment provisions vary. A borrower who expects to pay down early, perhaps on receiving an incentive or selling the property, should confirm that it is permitted without penalty before committing to the term.
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.