Solar Loan vs Cash Calculator
Compare paying cash for solar panels against financing them — see the extra cost of the loan’s interest.
How it works
Payment = P·r ÷ (1 − (1+r)^−n) on (cost − down) · Total financed cost = payment × n + down · Extra cost = total financed cost − cash cost
Paying cash for solar means no interest but a large upfront outlay; a solar loan spreads the cost so the payment can be covered by the electricity savings, at the price of interest. This tool compares the two on total dollars: the cash cost today versus everything you would pay over the loan, and the difference between them. Financing still makes sense when the monthly savings on your power bill exceed the loan payment — you just pay a premium for keeping your cash.
Worked example
A system that nets $22,000 after credits costs exactly that in cash. Financing the full amount at 6.99% over 20 years (240 payments) is about $170.42 a month, totaling roughly $40,901 — about $18,901 more than paying cash.
Frequently asked questions
Is it better to buy solar with cash or a loan?
Cash avoids all interest and gives the fastest payback. A loan preserves your savings and can be worthwhile if the monthly energy savings beat the loan payment, but you pay extra interest over the life of the loan — the amount shown here.
Does this include the federal tax credit?
Enter the net cost after any tax credit or rebate. The comparison then reflects your true out-of-pocket amount for both the cash and the financed path.
What about solar loan dealer fees?
Many low-rate solar loans build a dealer fee into the system price, effectively raising the cost. Use the real price you would pay under the loan, and compare it against a genuine cash quote, which is often lower.
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Educational estimate, not financial advice. Actual loan terms, fees and taxes vary by lender.