Compare cash purchase, solar loan financing, and Power Purchase Agreement (PPA) options side by side.
Instantly see your projected payback period, 25-year return on investment, and which solar funding option delivers the strongest long-term savings.
A solar finance calculator is an online tool that estimates the cost, savings, and return on investment (ROI) of installing a solar PV system. It helps businesses and property owners understand how much a solar installation may cost, how much electricity it could generate, and how much money it could save over time.
Our solar finance calculator allows you to compare different funding options such as a commercial solar loan or a Power Purchase Agreement (PPA), so you can assess cash flow impact, payback period, and long-term financial performance before committing to a project.
The results generated by the solar finance calculator are based on the information you provide, including system size, electricity rates, financing terms, and inflation assumptions. While the tool uses industry-standard methodologies for estimating solar generation and financial performance, actual results may vary due to:
The calculator is designed to provide a realistic financial projection to support decision-making, but it does not replace a detailed site survey or formal financial proposal.
System size refers to the total capacity of the solar PV system, usually measured in kilowatt-peak (kWp). It is typically determined by the available roof space, panel efficiency, and the number of solar panels installed.
A larger system size generally produces more electricity, which can increase energy bill savings and improve overall return on investment. However, the optimal system size depends on your electricity consumption, budget, and financing structure.
The installation cost represents the total estimated cost of supplying and installing your commercial solar PV system. This typically includes:
Understanding your total solar installation cost is essential for calculating loan repayments, PPA pricing, ROI, and payback period.
A solar loan allows you to finance the system upfront and own the asset once it is installed. You repay the loan over an agreed loan duration with interest (APR). This option allows you to benefit from full electricity savings and potential asset value.
A Power Purchase Agreement (PPA) is a third-party financing model where a provider installs and owns the solar system on your property. You simply purchase the electricity it generates at an agreed PPA rate. PPAs require no upfront capital investment but typically run over a fixed contract term.
Your solar finance calculator results help you compare both options side by side.
The PPA rate is the agreed price per kilowatt-hour (kWh) that you pay for electricity generated by the solar system under a Power Purchase Agreement. This rate is usually set below your current grid electricity rate to deliver immediate cost savings.
Over the contract term, the PPA rate may increase annually if an escalator is applied. The calculator models how this affects long-term electricity costs and savings.
An escalator is a fixed annual percentage increase applied to the PPA rate over the length of the contract. For example, a 3% escalator means the price you pay per kWh increases by 3% each year.
Escalators are commonly used in long-term solar PPA agreements to account for inflation and operational costs. The solar finance calculator allows you to adjust the escalator to understand how it impacts long-term energy savings.
Solar panel degradation refers to the gradual reduction in electricity output over time. Most solar panels experience a small annual performance decline, typically around 0.3%–0.8% per year.
The calculator includes a panel degradation assumption to ensure long-term energy production forecasts remain realistic. Factoring in degradation provides a more accurate estimate of lifetime savings and financial returns.
Self-use (or self-consumption) is the percentage of solar-generated electricity that you use onsite rather than exporting back to the grid.
Higher self-use rates typically result in greater financial savings because you avoid purchasing electricity at your full grid rate. Exported electricity is usually paid at a lower export tariff.
Maximising self-consumption is often key to improving solar ROI for businesses.
Solar savings are calculated by estimating:
These factors are combined to project annual cost savings, cumulative savings, and payback period. The calculator also accounts for price inflation, export tariff changes, and panel degradation to provide a long-term financial forecast.
Grid rate inflation represents the expected annual increase in the price of electricity purchased from the grid. Historically, electricity prices have risen over time due to wholesale market changes, policy shifts, and network costs.
By adjusting price inflation in the calculator, you can model how rising electricity prices may increase the value of solar savings in the future.
Export tariff inflation is the estimated annual increase in the rate paid for electricity exported back to the grid. This affects the projected revenue from surplus solar generation.
Including export tariff inflation provides a more comprehensive long-term financial model for your solar investment.
APR (Annual Percentage Rate) is the fixed annual interest rate applied to your solar loan. It represents the cost of borrowing and is used to calculate monthly or annual loan repayments.
Understanding APR is essential when comparing different commercial solar loan options, as it directly affects cash flow and total repayment cost.
Admin charges are one-off fees applied by the loan provider to arrange and process financing. These may include underwriting, documentation, or arrangement fees.
The calculator includes admin charges to ensure your total financing cost is accurately reflected in the financial projections.
For solar loans, the loan duration typically ranges from 3 to 6 years.
For PPAs, contract terms commonly range from 15 to 25 years.
The contract term significantly impacts cash flow, total savings, and long-term return on investment. The calculator allows you to model different durations to find the most suitable structure for your business.
Yes. The purpose of the solar finance calculator is to help you determine whether installing a solar PV system makes financial sense for your property. By comparing installation cost, financing structure, projected savings, and payback period, you can assess the commercial viability of your investment.
For a detailed proposal, site-specific assessment and formal financing terms would still be required.
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