Solar Loan Calculator

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Reviewed by: David Chen, CFA
David is a Chartered Financial Analyst with over 15 years of experience in specialty financing, focusing on renewable energy tax credits and green energy loans.

This 4-in-1 Solar Loan calculator helps you estimate the payments for your solar panel system. Enter any three variables—Loan Amount, Annual Rate, Term, or Monthly Payment—and we will solve for the fourth.

Loan Amount ($) (P)

Annual Rate (%) (R)

Loan Term (Years) (T)

Monthly Payment ($) (M)

Solar Loan Payment Formulas

Solve for Monthly Payment (M):
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Solve for Loan Amount (P):
P = M [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]

Solve for Loan Term (T):
T = ln(M / (M – Pi)) / (n * ln(1 + i))

Solve for Rate (R):
Solved iteratively (no direct formula)

Formula Source: Energy.gov – Homeowner’s Guide

Formula Variables

(P) Loan Amount: The total cost of the solar panel system being financed, *after* any down payments or rebates.
(R) Annual Rate: The annual interest rate (APR) for the solar loan.
(T) Loan Term: The total number of years to repay the loan (e.g., 10, 15, or 20 years).
(M) Monthly Payment: The fixed monthly payment (Principal & Interest) required to pay off the loan.
(i) Monthly Rate: The annual rate divided by 12.
(n) Total Payments: The total number of payments (Term in years * 12).

Related Calculators

What is a Solar Loan Calculator?

A Solar Loan Calculator is a tool used to estimate the monthly payments on a loan taken out to finance a residential solar panel system. As the cost of solar technology has dropped, many homeowners choose to finance their system through a dedicated solar loan, a home equity loan, or a personal loan, allowing them to own the system and benefit from energy savings and tax credits.

This calculator models a standard amortizing loan, where you borrow a lump sum to pay for the system and pay it back in fixed monthly installments. It does not factor in the Federal Solar Tax Credit (ITC) or your monthly energy savings, but it provides the most crucial number for your budget: the fixed monthly loan payment.

This 4-in-1 tool helps you plan your solar investment by solving for any key variable. You can find your monthly payment, see how much you can borrow, or determine how a specific interest rate or term affects your payment.

How to Calculate Solar Loan Payments (Example)

Determine Your Loan Amount (P)
After rebates, the total Loan Amount (P) for your solar system is $25,000. Your lender offers an Annual Rate (R) of 8.0% for a 15-year (T) loan term. You want to find your Monthly Payment (M).
Convert Annual Rate to Monthly (i)
First, convert the annual rate to a monthly decimal: i = (8.0% / 100) / 12 = 0.08 / 12 = 0.0066667
Calculate Total Number of Payments (n)
Next, find the total number of monthly payments: n = 15 Years * 12 Months/Year = 180 payments
Apply the Amortization Formula
Use the standard loan payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M = 25,000 [ 0.0066667 * (1 + 0.0066667)^180 ] / [ (1 + 0.0066667)^180 – 1 ]
M = 25,000 [ 0.0066667 * (3.3135) ] / [ 3.3135 – 1 ]
M = 25,000 [ 0.02209 ] / [ 2.3135 ]
M = 25,000 * 0.009548
M = $238.70
Final Result
Your fixed monthly principal and interest payment for the 15-year solar loan will be $238.70.

Frequently Asked Questions (FAQ)

Should my loan payment be less than my electric bill?

Ideally, yes. The goal for many homeowners is for the new monthly loan payment to be less than or equal to their previous average monthly electric bill. This way, you are building equity in an asset (your solar system) for a similar monthly cost.

What about the Federal Solar Tax Credit (ITC)?

The ITC is a dollar-for-dollar reduction in your federal taxes, equal to a percentage of the total system cost. Many borrowers use their tax refund to make a large lump-sum payment on their loan, which can significantly shorten the term or lower future payments.

Is a solar loan the same as a solar lease or PPA?

No. A solar loan means you are *buying* and *owning* the system, making you eligible for tax credits. A lease or PPA (Power Purchase Agreement) means a third-party owns the system on your roof, and you simply pay them for the electricity it produces, often at a rate lower than the utility.

What’s a good term for a solar loan?

Terms often range from 10 to 25 years. A shorter-term (e.g., 10-12 years) will have a higher payment but will be paid off faster, maximizing your savings. A longer-term (e.g., 20-25 years) will have a lower monthly payment, often making it easier to be “cash-flow positive” from day one.

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