How to check your cash flow and returns from a solar loan

One important reason is that when you buy a solar panel system – whether through a solar loan or otherwise, you instantly increase the value of your home. A study by Zillow found solar panels on average add 4.1% to propertys value. For a $500,000 home, solar panels will add a cool $21,500 in value.

As for the total savings and cash flow from a solar loan, this depends on how you choose to set your loan up. Lets look at two different cases where a homeowner comes out ahead by taking out a solar loan:

In many cases, the homeowner will come out ahead from Month One. For instance, check out the diagram below generated by our solar panel calculator. It shows a utility bill customer who pays $199/month for electricity.

After purchasing solar panels with a 20-year zero-down solar loan, their utility bill will be just $19, while their loan repayment will be $132 – theyre coming out a net $48 ahead.

In the example above, the homeowner is essentially getting an asset that generates positive returns from Day One, all without spending anything out of pocket. For a homeowner looking for an instant return on investment, installing solar panels in this situation is a no-brainer!

Some homeowners may choose to prioritize overall savings over the lifetime of the panels. For example, the savings from a solar loan can be as high as $100,000 in solar-friendly states like California and New York.

In order to achieve higher returns like these, you should seek a solar loan with the shortest possible contract term, say 5 or 8 years. This will result in higher monthly loan repayments that are equal to, or even higher than, your monthly electric bill.

See your projected cashflow from using a solar loan to install solar panels

While you will not see positive cash flow during the duration of the loan, once the loan is paid off, you will enjoy essentially free electricity from your solar panels. And since solar panels are warrantied for 25 years – but often last longer – with a 5-year loan, youll enjoy over two decades of free electricity.

Even better, government data shows that electricity prices consistently increase over time, making your free electricity even more valuable than it would be now.

Our solar panel calculator offers an easy way to check the projected cash flow from a solar loan, i.e. how the utility bill savings will stack up against your loans monthly payments.

It only requires you to enter your address and the dollar value of your last monthly power bill and it does all the calculations from there.

It looks very simple at the front end but the calculator is actually very complex, taking into account your roof size and direction, local weather, local utility rates, tax credits, and other solar incentives to produce a very accurate result.

It calculates your solar loan monthly payment for the specific size of system your home needs, payday loans WY based on local prices in your area and a 4.99% APR, 20-year solar loan.

It also shows you utility bill savings over the lifetime of your panels, making it easy to see how the total savings will stack up against the total loan repayment.

How to find the best solar loan

  1. Opt for a secured loan like a home equity loan if you can – providing collateral will earn you a lower interest rate.
  2. Pay as much as you can as a down payment. This will lower the total amount of your loan, and less youll end up paying in interest.