Financing a Solar Installation

Most homeowners finance solar rather than paying cash. A solar loan works like any amortized installment loan: your monthly payment is set by the financed amount, rate, and term. Two numbers matter most: the federal residential clean energy credit (currently 30% of system cost, subject to tax liability rules) and your avoided utility bill. When monthly utility savings meet or exceed the loan payment, the system is cash-flow positive from day one. The simple payback period shown here divides the net cost after the credit by annual utility savings.