The dealer fee itself
The whole point of the tool and the input you are most likely not to have been given. Moving from 0% to 30% takes a 2.99% loan to 6.52% without changing a single number on the contract.
HyreSolar tools
What Is the Real Rate on Your Solar Loan?
Solve the effective APR once the dealer fee is inside the amount financed.
A solar loan's stated APR is calculated on the amount financed. When a dealer fee is capitalised into that amount, the stated rate can be perfectly legal, arithmetically correct, and still understate what you are paying for the system — because the cash price is lower than the principal. This tool solves for the rate you are actually paying.
What this returns at the defaults
A $41,000 loan at a 2.99% headline APR over 25 years, carrying a 25% dealer fee, is an effective 5.79% APR against a $30,750 cash price — 2.80 percentage points above the number on the contract. The fee is $10,250. The headline rate is not wrong; it is answering a different question than the one you are asking.
Last updated . Data as of 5 September 2026.
Effective APR model
Enter what the loan document says. The tool solves for the rate against the cash price.
— Effective APR
— Above the stated APR
— Implied cash price
— Dealer fee in dollars
— Monthly payment
— Paid above cash price
Effective APR solved against the implied cash price. Not a finance offer and not legal advice.
A cash price in writing from your installer beats every default here. HyreSolar does not sell systems and does not broker loans.
How to read the two rates
Both numbers are true, and they are not measuring the same thing. The stated APR is computed under the Truth in Lending Act on the amount financed. The effective APR here is computed on the cash price — what the same system costs without the financing programme attached. When those two figures differ, the gap is the dealer fee expressed as a rate.
A low headline rate is often bought, not given. Run the calculator at 0.99% and the effective rate is 3.52%; run it at 6.99% and it is 10.46%. The installer pays the lender for the right to advertise a low rate, and that payment goes into your principal. This is why "0.99% financing" and "no dealer fee" rarely appear on the same page.
The question this answers is not "is my loan bad". It is "what would this system cost me in cash, and am I being shown that number". A homeowner who knows the cash price can compare it against other quotes on a like-for-like basis. A homeowner who only knows the financed price cannot.
Gap under 1 pointEither the fee is genuinely small or you have entered a fee that was disclosed to you rather than one you inferred. Ask for the cash price in writing to confirm.
Gap of 1 to 3 pointsThe ordinary range once a mid-sized dealer fee sits in the principal. Worth knowing before you sign, and worth asking whether a cash-price purchase plus your own financing is cheaper.
Gap above 3 pointsThe financing is a substantial part of what you are buying. Compare the cash price against a home equity product or a credit union solar loan before proceeding.
How to use this calculator
Every input below is a number you can find, not one you have to guess. This is where each one comes from.
- 01
Enter the amount financed
The loan principal, not the system price and not the total of payments. This is the figure the lender is actually lending you.
Where to find it Your Truth in Lending disclosure, on the line labelled "Amount Financed". It is a required TILA box and it will be on the same page as the APR.
- 02
Enter the stated APR
The annual percentage rate printed on the loan document. Use the number as given; the tool does not second-guess it.
Where to find it The TILA disclosure box, labelled "Annual Percentage Rate". If your paperwork shows an interest rate and an APR that differ, use the APR.
- 03
Enter the term in years
How long the loan runs. Solar loans are commonly 10, 12, 15, 20 or 25 years, and the term changes the effective rate more than most people expect.
Where to find it The loan agreement, usually written as a number of monthly payments. Divide by 12 if it is given in months.
- 04
Enter the dealer fee, if you know it
As a percentage of the amount financed. If it was disclosed, use the disclosed figure. If it was not, this is the input you are testing.
Where to find it Ask the installer directly, in writing, for the cash price of the same system. The difference between that and the amount financed is the fee. If they will not give you a cash price, that itself is information.
- 05
If you have the cash price, work backwards
You do not need the installer to name a fee percentage. Divide the cash price by the amount financed, subtract from one, and multiply by 100.
Where to find it A $30,750 cash price on a $41,000 loan is 1 − (30,750 ÷ 41,000) = 25.0%. Enter 25.
- 06
Read the gap, not just the rate
The output that matters most is the spread between the stated APR and the effective one. That spread is the price of the financing, stated as a rate.
Where to find it Compare it against what a credit union or home equity line would charge you on the cash price. That is the only fair comparison available.
How this calculator works
Compute the payment
Standard amortisation on the amount financed at the stated APR. This is the payment your contract commits you to.
Infer the cash price
Amount financed × (1 − dealer fee). This is what the tool believes the system costs without the financing programme.
Solve for the rate
Bisection for the monthly rate at which the cash price equals the present value of that same payment stream. 200 iterations, so the answer is exact to well past the printed precision.
Report both, and the gap
Stated APR, effective APR, and the spread in percentage points. The engine does not judge which is fair.
The formula, in full
payment = P × r ÷ (1 − (1+r)^−n), where P is the amount financed, r the stated APR ÷ 12, n the term in months. cash = P × (1 − fee). Effective APR is the i solving cash = payment × (1 − (1+i)^−n) ÷ i, reported as i × 12.
A worked example, start to finish
A 12 kW system sold on a 25-year loan at an advertised 2.99%, with a dealer fee at the midpoint of the range this tool models. The homeowner was shown a monthly payment and a rate. They were never shown a cash price.
Inputs
- Amount financed
- $41,000
- Stated APR
- 2.99%
- Term
- 25 years, 300 payments
- Dealer fee entered
- 25% of the amount financed
- Implied cash price
- $30,750
- Dealer fee in dollars
- $10,250
- Monthly payment
- $194
Result
5.79% effective APR
The contract says 2.99% and the contract is not lying. But $194 a month for 300 months against a system worth $30,750 in cash is a 5.79% loan. The homeowner pays $27,514 above the cash price across the term. Note what happens if they had simply been quoted the cash price and borrowed $30,750 at a genuine 2.99%: the payment would be $146, not $194.
How the answer moves
The same $41,000 / 2.99% / 25-year loan, one input changed at a time. Every figure is computed by the calculator on this page.
| Change | Implied cash price | Fee | Payment | Effective APR | Gap |
|---|---|---|---|---|---|
| Base case$41,000, 2.99%, 25 yr, 25% fee | $30,750 | $10,250 | $194/mo | 5.79% | +2.80 pts |
| Fee 0% — a true cash-price loan | $41,000 | $0 | $194/mo | 2.99% | +0.00 pts |
| Fee 10% | $36,900 | $4,100 | $194/mo | 3.97% | +0.98 pts |
| Fee 15% | $34,850 | $6,150 | $194/mo | 4.53% | +1.54 pts |
| Fee 20% | $32,800 | $8,200 | $194/mo | 5.13% | +2.14 pts |
| Fee 30% | $28,700 | $12,300 | $194/mo | 6.52% | +3.53 pts |
| Headline 0.99% instead of 2.99% | $30,750 | $10,250 | $154/mo | 3.52% | +2.53 pts |
| Headline 6.99% instead of 2.99% | $30,750 | $10,250 | $290/mo | 10.46% | +3.47 pts |
| Term 12 years not 25 | $30,750 | $10,250 | $339/mo | 8.37% | +5.38 pts |
| Term 20 years not 25 | $30,750 | $10,250 | $227/mo | 6.38% | +3.39 pts |
Read the last two rows carefully. A shorter term makes the same dealer fee bite harder as a rate, because the same dollars are recovered over fewer payments: 25% at 12 years is 8.37%, the same 25% at 25 years is 5.79%. This is the opposite of the usual intuition that a shorter loan is always cheaper — it is cheaper in total interest and more expensive in effective rate.
What moves this number most
Ranked. A proposal can change any of these without saying anything untrue, so these are the inputs to check first.
The term
Counter-intuitively powerful. The fee is a fixed dollar amount recovered across the payment stream, so a shorter stream concentrates it. The same 25% fee is 8.37% effective at 12 years and 5.79% at 25.
The stated APR
Moves the effective rate roughly in step, but not proportionally — the fee adds its own spread on top. A 0.99% headline is 3.52% effective; a 6.99% headline is 10.46%. The absolute gap grows with the rate.
Whether a cash price exists at all
Some installers genuinely price the same system identically for cash and finance. If that is true of yours, the fee is zero and the stated APR is the real one. The way to find out is to ask for the cash price in writing.
What is deliberately absent
Origination charges outside the dealer fee, prepayment behaviour, the 18-month reamortisation many solar loans assume, and any tax credit. Each is real and each is outside a rate comparison. The reamortisation assumption matters especially now — see the FAQ.
Common mistakes with this calculation
Comparing a financed price to another financed price
Two quotes each carrying an undisclosed and different dealer fee are not comparable, however carefully you line up the monthly payments. Get both cash prices, or you are comparing financing products while believing you are comparing solar systems.
Treating the stated APR as wrong or illegal
It is generally neither. TILA computes the rate on the amount financed, and a capitalised dealer fee is inside that amount rather than treated as a finance charge. The disclosure can be fully compliant and still leave you without the number you need.
Entering the total of payments as the amount financed
They are different TILA boxes and the gap between them is the interest. Using the total of payments will produce a nonsense cash price and a meaningless rate.
Assuming a shorter term always costs less
In total dollars it does. As an effective rate against a dealer fee, it costs more, because the fee is amortised over fewer payments. Both facts are true at once and the scenario table shows them side by side.
Guessing a fee and then treating the output as measured
If you entered an assumed 25% because you were not told, the effective APR is a hypothesis, not a finding. It is still useful — it tells you how much the answer depends on a number nobody would give you.
Assuming the 30% credit will pay down the balance
Many solar loans are structured around a voluntary principal reduction in month 18, sized to a 30% federal credit. For systems placed in service after 31 December 2025 that credit is $0 under §25D. If the paydown does not happen, the payment re-amortises upward.
Important: this is a planning estimate
- The dealer fee is an input, not a measurement. If it was not disclosed to you, the output is a hypothesis about a number you were not given.
- Origination, documentation and prepayment charges outside the capitalised dealer fee are not modelled.
- The 18-month reamortisation common to solar loans is not modelled. If your loan has one, the real payment path is not flat.
- No tax credit is applied. §25D is $0 for systems placed in service after 31 December 2025.
- This is an arithmetic comparison, not legal advice and not a finance offer. Whether a specific disclosure complied with TILA is a question for a lawyer or your state regulator.
Questions this calculator answers
What is a solar dealer fee?
A payment the installer makes to the lender in exchange for being able to offer you financing, or a particular rate. It is generally capitalised into the loan principal rather than charged to you separately, which is why it does not appear as a line item on your contract and does not appear in the stated APR. CFPB describes fees that raise the loan cost by 30% or more above the cash price of the project.
Is the stated APR on my loan wrong?
Almost certainly not. The Truth in Lending Act computes APR on the amount financed, and a dealer fee capitalised into that amount is generally part of the principal rather than a finance charge. The stated rate can be entirely accurate and still not tell you what the system costs. That gap is what this tool measures — it is not an allegation about your lender.
How do I find out my dealer fee if nobody will tell me?
Ask the installer, in writing, for the cash price of the identical system — same panels, same inverter, same scope, no financing. The difference between that figure and your amount financed is the fee. If the cash price comes back the same as the financed price, there is no fee. If they decline to give a cash price at all, you have learned something useful about the quote.
Why does a shorter loan show a higher effective rate?
Because the dealer fee is a fixed number of dollars recovered across the payments. Spread over 300 payments it is 5.79% at our defaults; compressed into 144 payments it is 8.37%. The shorter loan still costs less in total dollars — $18,095 above cash versus $27,514 — but as a rate it is worse. Both statements are true and they answer different questions.
Why is your default fee 25%?
Because it is a round midpoint for a range we can describe but cannot measure. CFPB documents fees raising loan cost by 30% or more above cash price but does not publish a distribution we could average, and we will not invent one. Treat 25% as a placeholder to be replaced with your real figure, exactly as you would replace a placeholder price per watt.
How does this differ from your loan calculator?
The loan calculator starts from a cash price and tells you the payment and total cost once a fee and a rate are applied. This tool runs in the other direction: it starts from the loan document you already have and solves for the rate implied against the cash price. Use that one when planning, this one when you have a contract in front of you.
Should I take the cash price and borrow elsewhere?
It is the comparison worth running, and this tool exists to make it possible. If the effective rate here is 5.79% and a credit union will lend against the cash price at 7%, the dealer financing is genuinely cheaper. If the credit union is at 6%, it is not. You cannot make that comparison at all without a cash price, which is the practical reason to insist on one.
What is the 18-month reamortisation my contract mentions?
Many solar loans assume you will make a large voluntary principal payment around month 18, sized to a 30% federal tax credit, and the advertised payment is calculated as if you will. If you do not make it, the loan re-amortises and the payment rises, often substantially. For systems placed in service after 31 December 2025 the §25D credit is $0, so the money that paydown assumed may not exist. This tool models a flat payment and does not attempt that path.
Does a dealer fee mean I was defrauded?
No. Dealer fees are a widespread and generally lawful feature of point-of-sale financing across many industries, not just solar. What varies by state is whether the cash price must be disclosed to you. The useful question is not whether a fee exists but whether you were given enough information to compare the deal against alternatives.
Can I use this for a HELOC or a home equity loan?
You can, and the answer will simply be that the effective rate equals the stated rate, because those products do not carry a capitalised dealer fee. That is the point of running the comparison: it shows you what a loan without an embedded fee looks like.
The research behind these numbers
Every assumption in this calculator is argued from primary sources somewhere in our research library. These are the pages that matter for this one.
- Solar loan calculator The companion tool. That one answers what the payment is; this one answers what rate you are paying for the system.
- Proposal analyzer Normalises a quote to $/W and unwinds a dealer fee, so you can compare two bids for differently sized systems.
- What zero-down solar actually costs Where the money comes from when no money changes hands at signing.
- What the §25D expiry changed Why a loan structured around a 30% credit paydown may no longer behave as sold.
- Door-to-door solar sales The channel where financed-price-only quoting is most common, and the rules that apply to it.
- The UCC-1 on your property What the lender files against the house, and what it does when you sell.
- Selling a house with a solar loan The point at which the difference between cash price and financed price becomes somebody else’s problem.
- Solar sales regulation by state Which states require a cash price to be disclosed, and which do not.
More solar calculators
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Finds the year inverter cover ends and how long the array runs uncovered under a 25-year panel warranty.
Service panel upgrade check
Screens a proposed inverter against NEC 705.12 before you are quoted for a service upgrade you may not need.
Utility fixed charge impact
The part of the bill solar cannot reach. Shows why a zero bill is arithmetically impossible on most tariffs.
Want a more accurate estimate for your home?
Actual results depend on roof, usage, utility rules and a real proposal. Matching is still being built. The form is an enquiry, not a dispatch line.
Written and audited by
HyreSolar Research
Primary-source research, data analysis and fact checking
We are a research desk, not a sales floor. We read the statute, the tariff, the code section, the federal filing or the manufacturer data sheet ourselves, and we publish the figure with the document it came from and the date we retrieved it. Where a number cannot be traced to a primary source, we publish the shorter page and say what we could not verify. That rule has cost us whole sections, and it is the reason the rest can be trusted.
- 160
- primary sources read and cited
- 220
- figures with a retrieval date
- 115
- federal and state government sources
- 66
- researched pages published
How this desk works
- Primary sources only. Statutes from the legislature’s own publishing system, federal data from the agency that collects it, code text from the adopted edition, manufacturer claims from the data sheet. We do not cite an article that cites a source; we go and read the source.
- Every figure carries its provenance. A named document and the date we retrieved it, so you can check it and so you know how old it is. Retrieval dates are not decoration: an EIA rate from May is a different fact from an EIA rate from August.
- We publish what we could not verify. Every research page carries a section naming the things we tried to establish and could not, and why. A paywalled standard, a state website that refused the request, a manufacturer that publishes no figure at all.
- We separate measurement from modelling from our own reasoning, and label which is which on the page. A laboratory measurement, an assumption inside a modelling tool and our own inference are three different kinds of claim and they are never presented as one.
- We do not sell solar, and we take no payment for placement, ranking or a favourable mention. Nobody buys a position on this site.
Data as of 5 September 2026. Authorship on this site is organisational: the analysis belongs to the desk rather than to a named individual, and we do not publish credentials we do not hold. Our editorial policy sets out how we source, date and correct what we publish.
Data and sources
- Issue Spotlight: Solar Financing (Consumer Financial Protection Bureau, retrieved 2026-09-05. Published 7 August 2024. Source for dealer fees being capitalised into principal, excluded from the stated APR, and raising loan cost by 30% or more above the cash price.)
- Regulation Z, 12 CFR §1026.22 — determination of annual percentage rate (Consumer Financial Protection Bureau / eCFR, retrieved 2026-09-05. The rule under which the stated APR is computed on the amount financed. Basis for the statement that a compliant APR can still exclude the fee.)
- Regulation Z, 12 CFR §1026.4 — finance charge (Consumer Financial Protection Bureau / eCFR, retrieved 2026-09-05. Defines which charges are finance charges and which are not, the distinction that keeps a capitalised dealer fee outside the disclosed rate.)
- Residential Clean Energy Credit (§25D) (Internal Revenue Service, retrieved 2026-09-05. Basis for the statement that the credit is unavailable for property placed in service after 31 December 2025, which breaks the reamortisation assumption in many solar loans.)
- U.S. Solar Photovoltaic System Cost Benchmark (NREL, retrieved 2026-09-05. Context for whether an implied cash price is plausible for the system size. Replace with a real cash quote before relying on it.)