To use the Solar Financing Calculator, input the total cost of your solar system, the loan interest rate, and select the loan term. Optionally, you can enter a down payment, federal tax credit percentage, and your current electricity rate along with the expected rate increase. The calculator will provide you with detailed financial insights including monthly payments and potential savings.
The monthly loan payment is calculated using the formula for an amortizing loan: PMT = [P * r * (1 + r)^n] / [(1 + r)^n - 1], where P is the principal, r is the monthly interest rate, and n is the number of payments.
Consider a solar system costing $15,000 with a 4.5% interest rate over 15 years. With no down payment and a 26% federal tax credit, the monthly payment would be approximately $114. The total loan cost would be around $20,520, with a net system cost of $11,100 after tax credits.
When financing a solar system, consider the impact of interest rates and loan terms on your monthly budget. Additionally, factor in potential increases in electricity rates and how they might affect your savings over time. Use our Loan Calculator and Amortization Calculator for more insights.