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To compare a business solar loan with electricity savings, build two monthly schedules: repayments to the lender and the reduction in the company's electricity spending. A positive annual balance does not establish that solar savings will cover every instalment. Summer savings may accumulate while winter repayments require cash from the business.
The illustrative model below provides explicit assumptions, a repayment formula and a first-year calendar. It helps identify seasonal funding gaps and prepare questions for a lender. Every rate, cost, energy quantity and electricity price in the example is hypothetical. None is a current loan offer or a forecast for a particular site.
What the repayment schedule tells you
A project return assessment considers whether an investment recovers its cost over a chosen period. A debt schedule answers a different question: how much must be paid in a particular month, and where will that cash come from? A project with attractive long-term economics can still require additional funding during commissioning or low-generation months.
Keep the owner's contribution, pre-commissioning costs, debt service and operating savings separate. Principal repayment is a cash outflow even though it is different from an operating expense. Equally, loan proceeds are financing, not income from generating electricity. Combining these categories can make the available cash look larger than it is.
The broader business solar financing model is a separate starting point. This article tests cash availability against payment dates. It does not establish eligibility for a financing programme or predict a credit decision.
Set the loan amount and upfront cash requirement
Assume a completed solar project costs UAH 2,000,000. The company contributes UAH 600,000, or 30%, and borrows UAH 1,400,000 for 60 months. Use a hypothetical fixed nominal interest rate of 18% per year, equal monthly payments at month-end and a one-off arrangement fee of 1% of principal. The fee is paid from the company's own funds before operation starts.
The fee is UAH 14,000, bringing the initial owner funding to UAH 614,000 before a seasonal reserve. If the fee is financed, add it to principal and recalculate the payment. If it is deducted from the disbursement, check whether the amount actually received still covers the contractor's invoice.
All example amounts exclude VAT. VAT payments and recovery, income tax, collateral registration and additional bank charges are outside the model. They may still matter in a real project. A hypothetical UAH 2,000 monthly operating allowance covers maintenance and insurance together; its adequacy must be checked against actual quotations.
Calculate the fixed monthly instalment
With an annuity loan, the total instalment remains constant while the rate is unchanged. Each payment covers interest and reduces principal. Here the monthly rate r is 18% / 12 = 1.5%, principal P is UAH 1,400,000 and the payment count n is 60. The formula is A = P × r / [1 - (1 + r)-n].
This gives a monthly payment of UAH 35,550.80. First-month interest is UAH 21,000, principal repayment is UAH 14,550.80 and the remaining balance is UAH 1,385,449.20. The next interest calculation uses that lower balance, so the principal portion gradually increases.
Across 60 payments, total debt service is approximately UAH 2,133,048, including UAH 733,048 of interest. The arrangement fee is additional. Calculations retain the unrounded payment; displayed amounts are rounded for readability. Actual bank schedules can differ because of dates, the contractual interest basis and final-payment adjustments.
Equal principal repayment produces a different schedule. Under the same simplified assumptions, principal falls by UAH 23,333.33 each month. The first total payment is UAH 44,333.33 and the last is UAH 23,683.33. Ask whether “equal payments” means equal principal or equal total instalments.
Use savings that actually reduce spending
Solar savings arise from electricity that genuinely replaces purchases from the grid. Assume annual generation of 120,000 kWh and self-consumption of 80% in every month. This replaces 96,000 kWh of purchased electricity. These are teaching assumptions, not standard output or guaranteed utilisation figures.
At a hypothetical avoided variable cost of UAH 6/kWh, annual gross savings are UAH 576,000. Subtracting UAH 24,000 of operating costs leaves UAH 552,000 before debt service and tax. Exported surplus has no revenue in this model. Valuing all generation at the purchase price would overstate savings when the company does not use all of it.
For a real grid-tied business solar system, compare hourly generation with demand, including weekends and production shutdowns. Count only electricity bill components that actually fall when purchases decrease. Fixed charges do not automatically become savings. Match the date on which the lower electricity bill releases cash with the repayment date.
Compare the first year month by month
Assume operation starts in January, the full loan is disbursed before commissioning and savings reduce cash spending in the same month. The generation shares below total 100%, but are not a weather forecast for any Ukrainian region. Every month has debt service of UAH 35,550.80 and operating costs of UAH 2,000.
| Month | Generation share | Gross savings | Balance |
|---|---|---|---|
| January | 3% | 17,280 | -20,271 |
| February | 4% | 23,040 | -14,511 |
| March | 7% | 40,320 | 2,769 |
| April | 10% | 57,600 | 20,049 |
| May | 13% | 74,880 | 37,329 |
| June | 14% | 80,640 | 43,089 |
| July | 14% | 80,640 | 43,089 |
| August | 12% | 69,120 | 31,569 |
| September | 9% | 51,840 | 14,289 |
| October | 7% | 40,320 | 2,769 |
| November | 4% | 23,040 | -14,511 |
| December | 3% | 17,280 | -20,271 |
| Year | 100% | 576,000 | 125,390 |
Annual debt service is approximately UAH 426,610. The remaining UAH 125,390 excludes tax and other unmodelled cash flows. It is neither net profit nor recovery of the initial contribution: the company has already provided UAH 614,000 separately. The annual total is calculated before rounding individual rows.
Find the seasonal cash reserve
Add monthly balances consecutively, starting from zero. January creates a deficit of UAH 20,270.80; after February it reaches UAH 34,781.60. That is the lowest cumulative balance in the first year under the assumed start date. Theoretically, this opening reserve covers the modelled seasonal gap if summer surpluses remain available for future repayments.
Including the contribution and fee, illustrative owner funding is approximately UAH 648,782. The reserve is cash that must be available, not another consumed project expense. Do not subtract it again from the annual result as if it were spent permanently. An autumn start, delayed settlement or uneven maintenance bills would change the required amount.
Check movements within each month too. A bank payment due on the fifth cannot be funded by savings that release cash at month-end. A practical reserve uses actual dates, downside scenarios and an agreed liquidity margin. The minimum from this example is not a funding recommendation for a particular company.
Stress-test generation and avoided electricity cost
Change one assumption first to see its individual effect, then combine plausible risks. If usable solar energy falls by 20% and avoided electricity cost falls by 10%, gross savings become UAH 576,000 × 0.8 × 0.9 = UAH 414,720. With unchanged operating costs and debt service, the annual balance becomes approximately negative UAH 35,890.
This is more than a seasonal mismatch. The company needs another source of debt-service funding over the year. Separately test delayed commissioning, lower daytime demand and repairs. For a variable-rate loan, rebuild the schedule around rate-reset dates. Temporary interest compensation also requires a calculation of payments after support ends.
Do not transfer household-loan terms to a company. Confirm eligible borrowers, equipment, compensation, security and consequences of non-compliance for the specific programme. This example includes no public support; its 18% rate is solely a hypothetical input.
Prepare a useful discussion with the lender
Request a complete dated schedule showing principal, interest, fees and every mandatory payment. Ask about seasonal repayments, a principal grace period and early repayments. A grace period does not necessarily waive interest. A smaller instalment achieved through a longer term does not by itself establish that financing is better value.
Compare proposals using the same project cost, commissioning calendar and operating forecast. Identify costs paid immediately, financed costs and annual charges. Have accounting staff confirm the financial assumptions and the technical team confirm generation and self-consumption. Keep a date and version for each calculation so a revised rate is not lost between files.
If you are considering two financing methods, compare solar loans and finance leases through ownership, fees and the final payment.
For solar financial modelling and financing support, provide ONG Solar with the project estimate, electricity bills, demand profile, preferred contribution and proposed bank terms. A monthly comparison can then reveal the cash reserve, difficult payment periods and questions to resolve before signing.