Solar Loan Calculator — Monthly Payment & Total Interest Cost
Calculate your monthly solar loan payment, total interest cost and true net cost after the 30% federal tax credit. Compare loan vs cash purchase.
· Free · No signup required
How to use this calculator
- Enter the total solar system cost before incentives.
- Set the loan term in years (5, 10, 15 or 20 year loans are common).
- Enter the annual interest rate from your lender.
- Set the down payment percentage (many solar loans are $0 down).
- See your monthly payment, total interest and how the loan compares to your annual savings.
Understanding your results
How solar loan payments are calculated: Monthly payment = P × r(1+r)^n / ((1+r)^n − 1), where P is principal, r is monthly interest rate, and n is number of months. At $20,000 principal, 6.99% APR, 12-year term: monthly payment is $219. Total payments over 12 years: $31,536. Total interest: $11,536 — 58% of the original principal.
The 30% ITC principal reduction strategy: The optimal solar loan strategy is to take a $0-down loan for the full system cost, then apply your tax credit (typically received in April following installation year) directly to the loan principal. On a $20,000 loan, applying a $6,000 ITC credit in month 12 reduces remaining principal from ~$18,500 to ~$12,500 — effectively refinancing at much lower total interest. Many solar lenders structure 18-month interest-only periods specifically to accommodate this strategy.
Solar-specific loan types: (1) Unsecured solar loans (most common) — no home equity required, approved in minutes, rates 4.99–9.99% APR based on credit score. (2) Secured solar loans / HELOC — lower rates (prime + 0–2%), requires home equity, 2–4 week approval. (3) PACE financing — property-assessed, repaid through property taxes, no credit check, but transfers with the home. (4) FHA PowerSaver — government-backed, for energy efficiency upgrades.
Comparing total cost: cash vs loan vs lease: Cash purchase has zero interest cost and the fastest payback. A 7% solar loan adds $8,000–$15,000 in interest over 12 years but preserves capital for other uses. A solar lease eliminates upfront cost but costs $10,000–$20,000 more over 25 years than loan purchase because you don’t capture the tax credit. For most homeowners with good credit, a $0-down solar loan beats leasing definitively.