Solar Loan vs Cash Calculator
What financing actually adds — and whether your bill savings cover the payment from month one.
✏️ These numbers were filled in from a shared link — change anything to make it your own.
Watch the dealer fee
This is where solar financing gets expensive in ways the advertised rate hides. A very low APR is frequently paired with an origination or "dealer" fee of 15–30% of the system price, folded into the amount financed. The rate looks great; the balance you are paying it on is inflated.
The test: ask every installer for the cash price and the financed price separately. If financing raises the price, that difference is a fee — enter it above and watch what it does to the comparison.
Cash-flow positive isn't the same as cheaper
Salespeople lean hard on "your savings cover the payment." That can be true and financing can still cost you thousands more over the loan, because the comparison being made is against your current utility bill, not against paying cash. Both numbers are shown above — judge on the net gain line, not the monthly.
Work out your year-1 savings first with the Solar Payback Calculator, and size the system with the System Size Calculator.
Assumes the loan is repaid on schedule with no lump-sum tax-credit paydown; many solar loans assume you will make one, and re-amortize upward if you do not. Excludes maintenance and inverter replacement. General information, not financial advice.
Frequently asked questions
Is it better to pay cash or finance solar?
Paying cash always costs less in absolute terms because you avoid interest entirely. Financing wins on accessibility, not cost — it lets you install now without a large lump sum, and if your monthly savings exceed the loan payment you are cash-flow positive from the first month. The right question is not which is cheaper but whether the interest is worth not tying up the cash.
What is a dealer fee on a solar loan?
Many low-advertised-rate solar loans carry a hidden origination or dealer fee, often 15–30% of the system price, baked into the amount financed. A 0.99% loan with a 25% dealer fee is far more expensive than a 7% loan without one. Ask every installer for the cash price and the financed price — if they differ, the gap is the fee.
Should I claim the tax credit and pay down the loan?
Many solar loans are structured expecting exactly that: they assume you will apply your tax credit as a lump-sum principal payment in year one, and the advertised payment only holds if you do. If you do not qualify for the full credit or use the money elsewhere, the payment re-amortizes upward. Confirm how your loan handles it before signing.
Does financing affect my payback period?
Yes. Interest adds to what you must recover, so the payback is longer than a cash purchase of the same system. Run the cash case in the Solar Payback Calculator, then compare it against the total financed cost shown here.