Solar Loan Calculator
In an age when the entire world is needing to adapt to renewable energy to combat climate change, you too can take part in the 'greening' of our planet. Many homeowners have started taking the advantage of having their own renewable energy system, most often in the form of solar power. Not only is a solar system an effective method to reduce your personal carbon footprint, it also provides the opportunity to save homeowners money.
Solar panels have become increasingly more affordable over the years and there are government incentives in place to help you get one yourself. Having a personal solar power system for producing your own electricity needs is both affordable and beneficial.
Overall, the installation and maintenance of solar panels isn't terribly difficult (and you'll be partnering with expert installation partners). Most of the costs are present at the beginning of the journey. Many homeowners can get a specific solar loan to help pay up to 100% of the costs of a solar system if you don't have the cash to spare.
The main benefit of having solar systems is the reduction of the power bill. A solar system can generate quite a lot of electricity and you can even sell excess power back into the grid through net metering.
This article will explain the reasons for getting a solar loan and will also present a simple solar loan calculator. Most financing companies will have their own loan terms and interest rates that can be tailored for your specific situation. Make sure you compare all of the options available to you to maximize your savings.
Why Should you Calculate your Solar Loans?
There are a couple of questions you should ask yourself before deciding whether or not a solar loan is worth it. This is predominantly to protect yourself when it comes to paying off the monthly repayments and whether or not you'll be able to recover the costs.
- What is the estimated cost associated with your solar system project?
- How big of a reduction estimate will your electric bill get once the solar system is installed?
- Is it possible to use the Federal Investment Tax Credit?
- Is there a possibility you could get additional financing options in your area to offset the cost of your solar power system or help you pay off the loan quicker?
This information is best checked with solar installers, utility providers, lenders and financing specialists to get accurate information for your geographic area and situation.
How to Calculate the Monthly Payment and Interest Rate of a Solar Loan
A simple solar loan calculator will help you anticipate the cost and benefits of financing your solar panels. Keep in mind that these tips are for illustrative purposes only and may be helpful as you start thinking about options to finance or purchase your solar system.
Loan amount = 100% of the installation costs and financing fees
Monthly repayment amount = Total loan amount amortized over the repayment period
Calculate when Monthly repayment amount < Prior utility bill
The key to finding the point in time in which your installation is cash flow positive is to find the month in which the total utility bills avoided exceeds your total investment. There are plenty of step-by-step methods useful that can help you compare finance options to maximize your savings.
Pre-Qualify for Getting an Unsecured Solar Loan
Certain lenders offer the possibility of pre-qualifying for a solar loan. Pre-qualifying lets you find out the loan terms you might expect if you were to take out a solar loan ahead of making a finite decision. Other financing options include taking out a mortgage or a home equity line of credit (HELOC), though these options typically take a long time to line up and place an additional lien against your property.
Regardless of the type of loan, it's important to remember that all debt obligations should be paid on time to avoid receiving credit penalties and negative impacts to your credit score.
Final Words
A solar loan calculator is a useful tool that many homeowners may use to estimate the cost-benefit of a solar loan.
Overall, a solar system is a great investment that is cash flow positive over the long-term. If you don't have the cash to spare, and don't want to take on a mortgage, an unsecured solar loan could be a great way to go. If you're interested in the environmental impact alone and are not a homeowner, you could also invest in solar power companies!
Not only is a solar system cash flow positive, but it also has the potential to add value to your property. New home buyers are increasingly interested in energy independence while reducing household operating expenses. Homes with solar systems are beginning to trade at a premium, and the reliance on renewable energy will only increase in the years to come.