Reading your financing vs cash opportunity cost result
The core question this tool answers
Financing costs more than cash in direct terms, since you're paying interest on top of the system price. But if the cash you'd otherwise spend upfront could earn a higher return invested elsewhere than the loan's APR costs you, financing and investing the difference can come out ahead on paper, by an even wider margin now that no tax credit reduces the amount of cash available to invest. On a $28,000 system financed at 6.99% against a 7% assumed investment return over 20 years, the investment path can outgain the financing premium by tens of thousands of dollars. The SEC's guidance on comparing investments covers general principles worth applying to this kind of decision.
Why this comparison isn't risk-free
A loan payment is a fixed, known obligation, while investment returns fluctuate and can be negative in any given year, even if the long-run average looks favorable. This tool shows a straight-line projection at your assumed rate, which smooths over real-world volatility that could matter a lot if you needed the invested money back during a down year.
Why discipline matters as much as the math
This comparison only holds up if the cash difference actually gets invested consistently rather than spent elsewhere. If there's a real chance that money would otherwise go toward other purchases, the certainty of paying cash outright and avoiding interest entirely may be the more realistic choice, even if the math favors financing on paper. The solar ROI percentage calculator can help you frame this decision in terms of a direct return figure instead.
How your loan APR changes the calculation
A lower APR makes financing and investing more attractive, since less of the investment gain gets offset by loan interest, while a higher APR narrows or eliminates the advantage. Run the loan APR impact calculator to see how sensitive your total cost is to the exact rate you're quoted. The CFPB's explainer on how loan amortization works covers the underlying mechanics of why the rate matters this much.
What a more conservative approach looks like
If investment risk isn't something you want to take on, the down payment impact calculator shows a middle path: putting some cash down to reduce interest while keeping some liquidity, without betting the full amount on market returns. The cash flow positive timeline calculator can also help you see when a full loan payment starts being covered by bill savings alone, regardless of what you do with the rest of your cash. A battery changes the loan amount. The battery charge time from solar calculator in our Battery & Storage section can help you size it before you borrow, so you do not pay interest on spare capacity.