15 Percent Interest Rate Calculator

by

Solar Panel ROI & Payback Calculator

Investment Summary

Net Investment Cost:

Payback Period:

25-Year Total Savings:

25-Year ROI (%) :

function calculateSolarPayback() { var cost = parseFloat(document.getElementById('systemCost').value) || 0; var bill = parseFloat(document.getElementById('monthlyBill').value) || 0; var creditPercent = parseFloat(document.getElementById('taxCredit').value) || 0; var rebates = parseFloat(document.getElementById('localRebates').value) || 0; var annualIncrease = (parseFloat(document.getElementById('utilityIncrease').value) || 0) / 100; var offset = (parseFloat(document.getElementById('solarOffset').value) || 0) / 100; var fedCredit = cost * (creditPercent / 100); var netCost = cost – fedCredit – rebates; var cumulativeSavings = 0; var year = 0; var paybackYear = 0; var annualSavingsYear1 = bill * 12 * offset; var totalSavings25 = 0; for (var i = 1; i = netCost && paybackYear === 0) { paybackYear = i – ((cumulativeSavings – netCost) / currentYearSavings); } } var netProfit = totalSavings25 – netCost; var roiPercent = (netProfit / netCost) * 100; document.getElementById('resNetCost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resPayback').innerText = paybackYear > 0 ? paybackYear.toFixed(1) + ' Years' : 'N/A'; document.getElementById('resTotalSavings').innerText = '$' + totalSavings25.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resROI').innerText = roiPercent.toFixed(1) + '%'; document.getElementById('solar-results').style.display = 'block'; }

How to Calculate Solar ROI and Payback Period

Deciding to switch to solar energy is a major financial decision. Understanding your Solar Payback Period—the time it takes for your energy savings to cover the initial cost of the system—is critical for evaluating the investment's value.

Key Factors in the Calculation

  • Gross System Cost: This is the total price paid to the solar installer for panels, inverter, mounting hardware, and labor before any incentives.
  • Federal Investment Tax Credit (ITC): As of 2024, the federal government offers a 30% tax credit on the total cost of solar installations. This significantly reduces the net cost of the system.
  • Local Rebates: Many states and utility companies offer cash rebates or performance-based incentives (SRECs) that further lower your entry cost.
  • Utility Inflation: Electricity prices typically rise by 2% to 5% annually. Solar locks in your energy rate, meaning your savings actually grow every year as utility power becomes more expensive.

Example Calculation

If you purchase a solar system for $20,000 and receive a 30% Federal Tax Credit ($6,000), your net cost is $14,000. If your panels save you $150 per month ($1,800/year), and we factor in a 3% annual increase in electricity rates, your payback period would be approximately 7.2 years. Over a 25-year lifespan, that same system could save you over $60,000 in total energy costs.

Long-term Value (ROI)

Solar panels are usually warrantied for 25 years. Most homeowners see a Return on Investment (ROI) of 15-25% annually, which outperforms traditional stock market averages. Additionally, studies by Zillow suggest that solar installations can increase a home's resale value by an average of 4.1%.

Leave a Comment