Reading your loan payment result
How the payment formula actually works
Solar loans use the same amortization math as a car loan or mortgage: a fixed monthly payment that covers both interest and principal, with more of each payment going toward principal as the balance shrinks. On a $28,000 loan at 6.99% APR over 20 years, that comes out to roughly $217 a month, or about $52,060 paid in total by the end of the term. The CFPB's explainer on how loan amortization works covers this same math in more general terms.
Why the dealer fee field matters
Some solar loans, particularly those arranged through the installer rather than a bank, charge a dealer fee that gets rolled into the loan amount itself rather than paid upfront. A 10% dealer fee on a $28,000 system adds $2,800 to what you're actually financing, which raises the payment even though the sticker price on your contract may not show it clearly. The dealer fee impact calculator breaks this out in more depth.
Whether a tax credit still applies to your payment
The federal residential solar tax credit expired for systems installed after December 31, 2025. If your system was installed by that deadline and you have unused credit carrying forward, some lenders let you apply it as a lump-sum payment toward principal after filing taxes, which the carried-forward credit tool covers in detail. For a new 2026 system, the monthly payment and total cost shown here are the accurate figures with no credit adjustment to apply later. The IRS Form 5695 instructions confirm the current eligibility rules directly.
How a down payment changes things
Putting money down reduces the amount you're financing dollar for dollar, which lowers both the monthly payment and total interest paid. A $5,000 down payment on this same example drops the monthly payment from $217 to about $178. The down payment impact calculator shows how that tradeoff affects your overall payback timeline too. The monthly bill reduction estimator can help you confirm this payment fits comfortably against your expected savings.
Comparing this payment against what a lease or PPA would cost
A loan payment is fixed for the life of the term, while lease and PPA payments typically rise with an annual escalator. Run the same system price through the solar loan vs lease comparison to see how a fixed loan payment stacks up against a rising lease payment over 20 years. The federal solar tax credit calculator is worth checking too if a carried-forward credit applies to your situation.