Solar PPA vs. Loan Payment Break-Even Calculator

Stack system production, utility offsets, loan terms, and PPA escalators to pinpoint when financed ownership overtakes a third-party PPA and how large the lifetime savings gap becomes.

DC nameplate capacity you plan to install.
Expected first-year yield per kW from PVWatts or installer estimates.
PPA pricing before escalators.
Turnkey ownership cost per kW including equipment and labor.
Annual percentage rate on the solar loan.
Amortization length for the ownership loan.
Blended retail rate your solar production displaces.
Annual increase in the PPA price.
Set to cover monitoring, insurance, or maintenance.
Federal ITC plus stackable incentives as a percent of cost.

Financial modeling only—review with your installer, lender, or tax advisor before signing agreements.

Examples

  • 7 kW array, 1,500 kWh/kW, $0.17 PPA, $3,100/kW cost, 5.9% APR ⇒ break-even in year 1, loan path saves $6,482 in year one and leads by $16,276 over 20 years
  • 5.5 kW system, 1,400 kWh/kW, $0.145 PPA, $2,800/kW cost, 4.5% APR ⇒ break-even in year 1, ownership saves $4,309 in year one and is $9,055 ahead by year 20

FAQ

How many years does the model evaluate?

The calculator runs a 25-year window and reports the first year ownership costs fall below the PPA path.

Can I include escalators on the loan payment?

Most solar loans are fixed-payment amortizing notes. If your loan has rate changes, adjust the APR and term to match the blended payment.

Where do tax credits show up?

The federal ITC (and any stacked incentives entered as a percentage) reduce the ownership cost in year one as a lump-sum benefit.

What about degradation or performance guarantees?

You can lower the annual production per kW input to reflect degradation or warranty minimums and rerun the comparison.

How should I interpret negative net costs?

Negative values mean the plan saves that amount versus staying entirely on utility power for the year shown. Positive values represent net cash outlays.

Additional Information

  • Ownership cash flows subtract both the federal tax credit (year one) and ongoing utility savings to compare against PPA invoices.
  • PPA costs escalate annually—set the escalator based on your term sheet to keep the comparison fair.
  • Loan payments fall away once the term ends, leaving only O&M minus energy savings in later years.
  • Adjust the utility offset rate if time-of-use or net billing impacts how much value each kWh delivers.
  • Negative net costs in the output indicate savings versus the status quo utility bill, not a cash outlay.

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