Solar finance calculator
Estimate the monthly repayment, the total cost of credit and the year-one tax relief on a financed system — and see whether it pays for itself from month one. Indicative only; a funder's quote will replace these assumptions with your real numbers.
Your estimate
How the estimate works
The monthly repayment uses a standard amortised loan calculation from the system cost, term and indicative rate, treating the rate as an APR (an effective annual rate, so the monthly rate is (1 + APR)1/12 − 1). A quote given as a nominal or flat rate will not match it exactly. The year-one relief assumes the system is owned (hire purchase, equipment loan or cash): the first £1m of qualifying spend is claimed under the Annual Investment Allowance at 100%, and for a company buying new, unused equipment the excess above £1m attracts the 50% first-year allowance, with the balance entering the special-rate pool at 6% a year. On a finance or operating lease the relief works differently. "Cash-flow positive" means the monthly energy saving exceeds the monthly repayment. These figures are indicative; your real rate depends on your covenant, and your saving depends on your tariff and consumption. Send your project details through the enquiry form; a funder's quote replaces every assumption here with your own numbers.
Reading the total cost of credit
The total cost of credit is the one number that makes two finance offers comparable: every repayment added together, minus the amount financed. It is not the same as the rate, and this is where quotes are easiest to misread.
A flat rate is charged on the original balance for the whole term, so a "5% flat" deal over six years costs far more than 5% APR — because APR is charged on the reducing balance. On a £160,000 system financed over six years, a genuine 8.5% APR costs roughly £43,000 in credit; the same headline as a flat rate would cost close to double. Ask which basis a quote uses, and then ask for the total cost of credit in pounds.
Two more items belong in the comparison: documentation or facility fees, which the calculator does not include, and any balloon or residual at the end of the term. A quote with a residual shows a lower monthly payment for the same asset — the money has moved, not disappeared. The solar panels monthly payments table shows the same arithmetic by system size, and is it worth financing solar panels sets the repayment against the saving.
What this calculator leaves out
It is a screening tool, and being explicit about the gaps is more useful than a longer output:
- VAT. Figures are net. On hire purchase or a loan the equipment VAT is payable up front (recoverable in the normal way if you are VAT-registered); on a lease it is charged on each rental instead.
- Running costs. Maintenance, monitoring and insurance are excluded, as is an inverter replacement, which typically falls due part-way through a panel's life rather than at the end of it.
- Output decline. The annual energy figure is held flat. Real generation declines slightly year on year, so use your installer's yield forecast for long-run comparisons.
- Whether you can use the relief. Capital allowances only help a business with taxable profit to set them against. Select the 0% option if that is your position and the relief line will read zero, which is the honest answer.
- The energy value. Use the avoided per-unit price from your own bill, not the headline average, and only for the share of output you use on site; our guide to business electricity rates shows how to separate the two.
- The rate. The default is a placeholder, not an offer. Pricing follows your covenant, the term, the deal size and the security.
From estimate to facility
If the shape works, the route from here is short:
- Gather recent electricity bills or half-hourly data, and your latest filed accounts.
- Size the system with your installer's quote and compare cash, hire purchase, lease and a PPA side by side.
- Confirm the capital-allowance treatment for the chosen route with your accountant, because the route decides who claims.
- Apply to the funder and ask for the total cost of credit in writing.
- Funders normally release on commissioning, so you are not paying for a system that is not yet generating.
Related guides
Solar finance calculator FAQs
How accurate is a solar finance calculator?
It is only as good as its four inputs: the installed cost, the term, the rate and the annual energy value. The repayment maths is exact — it is a standard amortisation — but the rate you are actually offered depends on your accounts and the deal size, and the energy value depends on your tariff and how much of the generation you use on site rather than export. Treat the output as a shape, not a quote.
Does the calculator include VAT?
No. The figures are net of VAT. On a hire purchase or an equipment loan the VAT on the equipment is normally payable up front, which is a real cash-flow item even though a VAT-registered business recovers it in the ordinary way. On a finance or operating lease, VAT is charged on each rental instead, so it spreads across the term.
Why does the year-one relief stop increasing above £1m?
Because the Annual Investment Allowance covers up to £1m of qualifying spend per accounting period. Above that, a company buying new and unused equipment can claim the 50% first-year allowance on the excess, with the balance going into the special-rate pool at 6% a year — so the relief keeps rising above £1m, just more slowly. The calculator now models both steps.
Does the relief apply if I lease the system?
Not in the same way. The calculator assumes an ownership route — hire purchase, an equipment loan or cash — where you claim the capital allowances. Under a finance or operating lease the funder normally owns the equipment and claims them instead, and you deduct the rentals; where the lease is a long funding lease the position reverses again. Check which route applies before relying on the relief line.