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Solar financing: understand the real cost

Monthly interest, flat-rate and reducing-balance loans, and net savings.

Edited by SolarKrasibUpdated 22 September 2026Read6 min

The answer first

Compare savings with the remaining bill, loan payments, maintenance and initial outlay. Identical interest percentages do not imply identical costs when one loan uses flat-rate interest and another uses a reducing balance.

Reducing-balance interest uses remaining debt

The model calculates monthly interest as opening principal × annual rate ÷ 12, with equal scheduled payments. After a promotional period, payments are recalculated from remaining debt and term. Actual contracts may use daily interest and additional fees.

Flat-rate interest uses the original principal

Modeled total interest = original principal × annual rate × years, divided into payments. Do not directly compare the percentages of the two methods; compare total interest and repayment schedules.

Monthly affordability and payback are different questions

A positive month may not recover the initial down payment. The site shows cumulative owner cash flow after initial outlay and sustained payback within the simulation horizon, accounting for specified replacement costs and NPV at the chosen discount rate.

Supporting sources

  1. Bank of Thailand — Reducing-balance interest ↗
  2. Bank of Thailand — Flat-rate interest ↗

General information for questions and preliminary estimates. Site and contract conditions need individual verification. International sources explain principles, not Thai law.

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