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Your Solar Loan Has a Payment Increase Built Into Month 18. The Tax Credit That Was Supposed to Cover It Is Gone.

Most solar loans quote you a payment that assumes you will drop about 30% of the balance onto the principal within 18 months. That lump sum was the federal tax credit, and the IRS killed it for anything placed in service after December 31, 2025. Here is how to find out whether your loan has the jump in it.

Rooftop solar panels on a suburban house seen from above

If you financed solar panels, the payment on your statement may not be the payment you signed up for. A lot of solar loans are built to jump somewhere between month 12 and month 18. The money that was supposed to absorb that jump was the 30% federal tax credit, and for anything switched on in 2026, that credit doesn’t exist.

Here’s how the lender builds these loans. The installer shows you a monthly number that sits under your current power bill. The lender is assuming you will drop a lump sum, usually around 30% of what you borrowed, onto the principal inside the first year and a half. Lenders call it re-amortization. Make the payment and the low number holds for the rest of the term. Miss it and the lender spreads what’s left across the remaining years, and the payment goes up and stays up.

EnergySage runs the math on a $20,000 loan at 6% over 20 years. Apply the $6,000 lump and you’re at roughly $100 a month. Carry the full balance instead and you’re at about $143. Same panels, same roof, about $43 a month more for the next eighteen years. Homeowners who hit that mark without the lump sum report increases in the 30% to 40% range.

Now the part the quote sheet doesn’t say out loud. That $6,000 wasn’t supposed to come from your savings account. It was the Section 25D credit. The IRS sentence is one line long: “The credit is not available for any property placed in service after December 31, 2025.”

So a payment schedule built around a 25D refund is built around a check the government stopped writing. If your system went live in 2026 and your loan still carries a re-amortization assumption, the installer quoted you a payment nobody expected you to keep. They picked that number to win a comparison against your utility bill.

Pull your loan documents this week. Search them for “re-amortization,” “buydown,” or any scheduled payment change, and find the deadline. Then call the servicer and ask two questions in this order: what is my payment if I pay nothing extra, and what is the last date to make the lump sum? Write both answers down. If the answer to the first question is a number you can’t carry, you want to know that now, not on the statement where it shows up.

If you installed in 2025, you may still have the credit in hand. Confirm you actually claimed it on Form 5695, and confirm the money reached the loan, not your checking account. Unused amounts from an eligible 2025 install still carry forward.

If you’re shopping for solar right now, make it simple. Ask for the monthly payment that assumes no prepayment at all, and treat that as the real price. Run it against your actual utility spend in our solar calculator before you sign anything, and read how the financing structures compare in our solar financing guide.

The panels will produce what they produce. The loan is the part somebody gets to design.

How Candid Yak makes money. Some of the products we write about pay us if you apply or sign up through our links. That never changes our verdict, our rankings, or the numbers in this article. We call a bad deal a bad deal whether it pays us or not. Some brands shown in our comparison tools are placeholder examples while we finalize partner agreements, and we label them as such.

Frequently asked questions

What is solar loan re-amortization?

It is a recalculation of your monthly payment partway through the loan, usually around the 18-month mark. The lender quotes your opening payment as if you will make a large lump-sum payment against the principal, typically about 30% of the amount financed. If you make it, the low payment holds for the rest of the term. If you do not, the lender spreads the remaining balance across the remaining years and your payment goes up permanently.

Why was the lump sum set at about 30%?

Because it was the federal residential solar tax credit. Section 25D refunded 30% of the system cost, and solar lenders built their payment schedules around the assumption that you would hand that refund straight to the loan. The IRS states that the credit is not available for any property placed in service after December 31, 2025.

How much does the payment actually go up?

It depends on the loan size and the term. EnergySage's own example uses a $20,000 loan at 6% over 20 years: applying a $6,000 lump sum puts the payment near $100 a month, while carrying the full balance runs about $143 a month. Homeowners who miss the payment have reported increases in the range of 30% to 40% at the 18-month mark.

I installed in 2025. Do I still have the credit?

If your system was placed in service on or before December 31, 2025, yes, and unused amounts still carry forward on Form 5695. The date that matters is when the system was placed in service, not when you signed or paid a deposit. Confirm you actually claimed it, then confirm the money reached the loan servicer before your re-amortization deadline.

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