6.80 Interest Rate Calculator

Solar Panel ROI & Payback Calculator

Your Solar Projection

Net System Cost:

Annual Production:

Payback Period:

25-Year Savings:

function calculateSolarROI() { var systemSize = parseFloat(document.getElementById('systemSize').value); var costPerWatt = parseFloat(document.getElementById('costPerWatt').value); var sunHours = parseFloat(document.getElementById('sunHours').value); var electricityRate = parseFloat(document.getElementById('electricityRate').value); var taxCreditPct = parseFloat(document.getElementById('taxCredit').value) / 100; if (isNaN(systemSize) || isNaN(costPerWatt) || isNaN(sunHours) || isNaN(electricityRate)) { alert('Please enter valid numerical values.'); return; } var grossCost = systemSize * 1000 * costPerWatt; var taxCreditValue = grossCost * taxCreditPct; var netCost = grossCost – taxCreditValue; // Annual Production (kWh) = Size (kW) * Sun Hours * 365 days * system efficiency (0.78 factor) var annualProduction = systemSize * sunHours * 365 * 0.78; var annualSavings = annualProduction * electricityRate; var paybackPeriod = netCost / annualSavings; // 25 Year Profitability (assuming 2% annual energy rate increase and 0.5% panel degradation) var lifetimeSavings = 0; var currentAnnualProd = annualProduction; var currentRate = electricityRate; for (var i = 0; i < 25; i++) { lifetimeSavings += (currentAnnualProd * currentRate); currentAnnualProd *= 0.995; // 0.5% degradation currentRate *= 1.02; // 2% inflation } var netLifetimeProfit = lifetimeSavings – netCost; document.getElementById('netCostDisplay').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('annualProdDisplay').innerText = Math.round(annualProduction).toLocaleString() + ' kWh'; document.getElementById('paybackDisplay').innerText = paybackPeriod.toFixed(1) + ' Years'; document.getElementById('lifetimeDisplay').innerText = '$' + netLifetimeProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('results-area').style.display = 'block'; }

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How to Calculate Solar Panel ROI

Switching to solar energy is a significant financial decision. Understanding your Return on Investment (ROI) involves more than just looking at the sticker price of the panels. This calculator helps you determine how long it will take for the system to pay for itself through energy savings and what your long-term profits will look like.

Key Factors in Solar Math

• System Size: Most residential systems range from 5kW to 10kW. A larger system costs more upfront but generates more electricity.
• The 30% Federal Tax Credit: Currently, the Investment Tax Credit (ITC) allows you to deduct 30% of your solar installation costs from your federal taxes, significantly reducing the "Net Cost."
• Peak Sun Hours: This isn't just daylight hours; it's the intensity of sunlight. Areas like Arizona have higher peak sun hours than Washington state.
• Electricity Rates: The more you pay your utility company per kilowatt-hour (kWh), the more money you save by producing your own power.

Example Calculation

Suppose you install a 7kW system at $3.00 per watt.
1. Gross Cost: 7,000 watts × $3.00 = $21,000.
2. After 30% Tax Credit: $21,000 – $6,300 = $14,700 Net Cost.
3. If you produce 10,000 kWh per year and your rate is $0.15/kWh, you save $1,500 annually.
4. Payback Period: $14,700 / $1,500 = 9.8 Years.

Why Efficiency Matters

Our calculator applies a standard 78% system efficiency factor. This accounts for real-world energy loss through the inverter (converting DC to AC), wiring resistance, and dust on the panels. While panels are rated for a specific wattage in laboratory conditions, these environmental factors ensure your ROI estimate remains realistic and conservative.

Pro Tip: Check with your local utility for "Net Metering" programs. These allow you to sell excess energy back to the grid during the day, effectively using the grid as a giant battery and further accelerating your ROI.