Path-Q Solar

How can I compare a smaller cash system with a larger financed system?

Answer

Compare the two proposals over the same time horizon using total installed cost, financing repayment, production, self-consumption, export value, operating costs, and remaining debt. The larger financed system is worthwhile only if its additional useful energy and benefits justify the extra equipment and borrowing cost without creating an unacceptable payment or oversupply.

Key points

  • Calculate incremental cost and incremental savings rather than comparing total system savings alone.
  • Check whether the larger system produces energy that is likely to be exported at a lower value.
  • Compare household affordability, reserve impact, loan balance, and expected sale timing.

What it depends on

  • System sizes and production estimates
  • Cash price and financing terms
  • Electricity use and load growth
  • Self-consumption and export compensation
  • Storage, maintenance, and warranty assumptions

Risks and trade-offs

  • A larger system can have lower marginal value if excess production is poorly compensated.
  • Financing can make the larger system cost more even if it produces more electricity.
  • A smaller system may leave future savings or expansion potential unused.

Information you may need

  • Comparable cash and financed proposals
  • Monthly production for each design
  • Usage profile and expected future load
  • Loan disclosures and export assumptions

Your next step

What to do next

Build an incremental comparison showing the added payment, added production, added self-consumption, added export value, and remaining loan balance.

Path-Q

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