Estimate your savings and payback period for a residential solar investment.
Net Investment (After Credits):—
Year 1 Savings:—
Payback Period (Break-even):—
25-Year Total Savings:—
25-Year ROI Percentage:—
function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById('systemCost').value);
var taxCredit = parseFloat(document.getElementById('taxCredit').value) / 100;
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var billOffset = parseFloat(document.getElementById('billOffset').value) / 100;
var energyIncrease = parseFloat(document.getElementById('energyIncrease').value) / 100;
var maintenance = parseFloat(document.getElementById('maintenance').value);
if (isNaN(systemCost) || isNaN(monthlyBill)) {
alert("Please enter valid numbers for system cost and monthly bill.");
return;
}
// Calculations
var netCost = systemCost * (1 – taxCredit);
var year1Savings = (monthlyBill * 12 * billOffset) – maintenance;
// Payback Period Logic (Accounting for compounding energy costs)
var cumulativeSavings = 0;
var currentYearSavings = year1Savings;
var years = 0;
var foundPayback = false;
for (var i = 1; i = netCost && !foundPayback) {
years = i – ((cumulativeSavings – netCost) / currentYearSavings);
foundPayback = true;
}
currentYearSavings = currentYearSavings * (1 + energyIncrease);
}
// 25-Year Totals
var total25YearSavings = 0;
var tempYearSavings = year1Savings;
for (var j = 1; j <= 25; j++) {
total25YearSavings += tempYearSavings;
tempYearSavings = tempYearSavings * (1 + energyIncrease);
}
var netProfit = total25YearSavings – netCost;
var roiPerc = (netProfit / netCost) * 100;
// Display Results
document.getElementById('solarResults').style.display = 'block';
document.getElementById('netCost').innerHTML = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('year1Savings').innerHTML = '$' + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('paybackPeriod').innerHTML = years.toFixed(1) + ' Years';
document.getElementById('totalSavings').innerHTML = '$' + total25YearSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiPercentage').innerHTML = roiPerc.toFixed(1) + '%';
}
Understanding Your Solar ROI
Investing in photovoltaic (PV) solar panels is one of the most effective ways for homeowners to hedge against rising utility costs. To calculate your true Solar Return on Investment, you must consider the "Net Cost" rather than the sticker price. In the United States, the federal Investment Tax Credit (ITC) currently allows you to deduct 30% of your system costs from your federal taxes, significantly shortening the payback period.
Key Factors Influencing Your Savings
Utility Rate Inflation: Historically, utility rates increase by 2% to 5% annually. Solar locks in your energy rate, meaning your ROI actually improves every time the utility company raises prices.
Net Metering: Most states offer net metering, allowing you to "bank" excess energy produced during the day and use it at night, effectively running your meter backward.
System Degradation: Quality solar panels are warrantied for 25 years but lose about 0.5% efficiency annually. Our calculator factors in standard maintenance to provide a conservative estimate.
Property Value: Studies by Zillow and Lawrence Berkeley National Laboratory show that solar installations can increase a home's value by an average of 4.1%, which is an additional "hidden" ROI not captured in monthly bill savings.
Realistic Example Calculation
Imagine a homeowner with a $25,000 system. After applying the 30% federal tax credit, the net cost drops to $17,500. If their electricity bill was $200 per month ($2,400 per year) and solar covers 100% of that, they would see a simple payback in roughly 7.3 years. However, when accounting for a 4% annual increase in electricity costs, the break-even point often drops to 6 years, with a total 25-year profit exceeding $60,000.
Is Solar Right for You?
The best candidates for a high solar ROI are those with south-facing roofs, minimal shade from trees or neighboring buildings, and residents in states with high "Tier 1" electricity rates (like California, Massachusetts, or New York). Even in states with lower energy costs, the decreasing price of hardware makes solar a competitive long-term financial asset compared to traditional market investments.