Glossary
APR (Annual Percentage Rate)
APR (Annual Percentage Rate) is the yearly cost of a loan expressed as a percentage, including the interest rate and some mandatory fees. It is useful for comparing loans against each other, but in solar it does not reflect the dealer fee the installer adds to the system price, so a low APR does not mean a cheap loan.
What APR is
The interest rate says how much the lender charges for the money. APR adds the fees the law requires to be included (for example, certain origination charges) and expresses it as a yearly percentage. That is why APR is usually a bit higher than the nominal rate, and it is the number to use when comparing two loans with the same term.
Solar loans run long: between 10 and 25 years. One point of APR difference turns into a lot of money over the life of the contract.
Why it matters in Florida
The solar-specific problem is that APR does not capture the dealer fee. That commission is not charged as a loan fee but as a markup on the system price, so it legally sits outside the calculation. A loan with a very low APR can carry a high dealer fee and end up, in total, more expensive than one with a market APR and no fee.
The right comparison is not APR against APR. It is the total paid over the life of the loan (financed principal plus interest) against the cash price of the same system. And against the real savings on your bill, which depend on your offset, not on the rate.
Common mistake
Taking a loan because “the monthly payment is lower than the electric bill.” The payment can be lower in the early years and stop being so if your usage drops, if you sell the house, or if the system underproduces. Also common are loans with a low payment for the first months that jumps unless you make a large lump-sum payment (designed around a tax credit that no longer exists for purchases after 2025). Read the full amortization table. More in the solar loan explained.
Full guide: Solar loan explained: dealer fees, the real APR and what owning means →
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