Calculate your solar payback period and long-term energy savings.
Financial Summary
Net System Cost$0
Payback Period0 Years
25-Year Total Savings$0
Total ROI (%)0%
Understanding Your Solar Investment Return (ROI)
Investing in solar panels is more than just an environmental choice; it is a significant financial decision. The Return on Investment (ROI) of a solar system determines how quickly the system pays for itself through energy savings and how much profit it will generate over its 25 to 30-year lifespan.
Key Factors in the Calculation
Net System Cost: This is the gross price of your solar installation minus the 30% Federal Investment Tax Credit (ITC) and any local rebates.
Solar Coverage: Most homeowners aim for 90-100% coverage, but roof space or shading may limit this percentage.
Utility Inflation: Traditionally, electricity prices rise by 3% to 5% annually. Solar locks in your energy rate, making it more valuable as utility prices climb.
Payback Period: The average American household sees a solar payback period of 6 to 10 years. After this point, the electricity produced is essentially free.
Example: A Typical Solar Scenario
Imagine a home with a $20,000 solar installation. After the 30% federal tax credit, the Net Cost is $14,000. If the family previously paid $150/month ($1,800/year) and solar covers 100% of their needs, they save $1,800 in the first year. Considering a 4% annual increase in electricity rates, they would break even in approximately 7.2 years. Over 25 years, the total savings could exceed $65,000, representing a massive return on the initial investment.
function calculateSolarROI() {
var grossCost = parseFloat(document.getElementById('systemCost').value);
var taxCreditPercent = parseFloat(document.getElementById('taxCredit').value);
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var coveragePercent = parseFloat(document.getElementById('solarCoverage').value);
var annualInflation = parseFloat(document.getElementById('electricityIncrease').value) / 100;
if (isNaN(grossCost) || isNaN(monthlyBill) || grossCost <= 0) {
alert("Please enter valid positive numbers for cost and bill amounts.");
return;
}
// Calculations
var netCost = grossCost * (1 – (taxCreditPercent / 100));
var firstYearSavings = (monthlyBill * 12) * (coveragePercent / 100);
var cumulativeSavings = 0;
var paybackYear = 0;
var totalSavings25 = 0;
var currentYearSavings = firstYearSavings;
for (var year = 1; year = netCost) {
// Linear interpolation for more accurate payback month
var deficit = netCost – (cumulativeSavings – currentYearSavings);
var fraction = deficit / currentYearSavings;
paybackYear = (year – 1) + fraction;
}
if (year === 25) {
totalSavings25 = cumulativeSavings;
}
// Apply utility inflation for next year
currentYearSavings *= (1 + annualInflation);
}
var totalProfit = totalSavings25 – netCost;
var roiPercentage = (totalProfit / netCost) * 100;
// Display Results
document.getElementById('solarResults').style.display = 'block';
document.getElementById('netCostResult').innerHTML = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (paybackYear > 0) {
document.getElementById('paybackResult').innerHTML = paybackYear.toFixed(1) + ' Years';
} else {
document.getElementById('paybackResult').innerHTML = '> 25 Years';
}
document.getElementById('savingsResult').innerHTML = '$' + totalSavings25.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiResult').innerHTML = roiPercentage.toFixed(1) + '%';
// Smooth scroll to results
document.getElementById('solarResults').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}