Estimate your savings, net cost, and how many years it takes for your solar investment to pay for itself.
Financial Summary
Net Installation Cost:
Year 1 Savings:
Payback Period:
Total 25-Year Savings:
Lifetime ROI:
Net Profit (Lifetime):
Understanding Your Solar Investment
Switching to solar energy is one of the most significant financial and environmental decisions a homeowner can make. To determine if solar is "worth it," you must look beyond the initial price tag and focus on the Payback Period and Return on Investment (ROI).
Key Terms Explained
Net Installation Cost: The total price of your solar panels minus incentives like the Federal Solar Tax Credit (ITC) or state-specific rebates.
Payback Period: The amount of time it takes for your cumulative electricity bill savings to equal your net installation cost. Most residential systems pay for themselves in 6 to 10 years.
Electricity Bill Offset: The percentage of your electricity usage covered by your solar panels. If you produce as much as you consume, your offset is 100%.
Energy Inflation: Electricity rates typically rise by 2-4% annually. Solar protects you from these rising costs.
Example Calculation
Imagine a homeowner in California installs a system for $25,000. After applying the 30% Federal Tax Credit ($7,500), the net cost is $17,500. If their monthly bill was $200 ($2,400/year) and solar covers 100%, they save $2,400 in the first year. Even without considering rising energy costs, the payback period would be roughly 7.3 years. When factoring in a 3% annual electricity rate hike, the payback period often drops to 6.5 years.
Factors That Influence ROI
Several variables can accelerate or delay your solar ROI:
Solar Exposure: Homes with south-facing roofs and no shade produce more energy per panel.
Local Utility Rates: The more your utility charges per kWh, the more money you save by producing your own power.
Net Metering Policies: Some utilities credit you the full retail rate for excess power sent back to the grid, while others offer lower wholesale rates.
Financing: Paying cash yields the highest ROI, but solar loans allow for immediate monthly savings without a large upfront capital outlay.
function calculateSolarROI() {
var cost = parseFloat(document.getElementById("solarSystemCost").value);
var rebates = parseFloat(document.getElementById("solarRebates").value);
var monthlyBill = parseFloat(document.getElementById("solarMonthlyBill").value);
var offset = parseFloat(document.getElementById("solarOffset").value) / 100;
var inflation = parseFloat(document.getElementById("solarInflation").value) / 100;
var lifespan = parseInt(document.getElementById("solarLifespan").value);
if (isNaN(cost) || isNaN(rebates) || isNaN(monthlyBill)) {
alert("Please enter valid numerical values.");
return;
}
var netCost = cost – rebates;
var annualSavingsYear1 = (monthlyBill * 12) * offset;
var cumulativeSavings = 0;
var year1Savings = annualSavingsYear1;
var paybackYear = -1;
var totalSavings = 0;
var currentYearSavings = annualSavingsYear1;
for (var i = 1; i = netCost) {
// Simple interpolation for more accurate payback
var previousSavings = cumulativeSavings – currentYearSavings;
var needed = netCost – previousSavings;
paybackYear = (i – 1) + (needed / currentYearSavings);
}
currentYearSavings = currentYearSavings * (1 + inflation);
}
totalSavings = cumulativeSavings;
var netProfit = totalSavings – netCost;
var roi = (netProfit / netCost) * 100;
// Update UI
document.getElementById("resNetCost").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resYear1").innerText = "$" + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (paybackYear !== -1) {
document.getElementById("resPayback").innerText = paybackYear.toFixed(1) + " Years";
} else {
document.getElementById("resPayback").innerText = "Over " + lifespan + " Years";
}
document.getElementById("resTotalSavings").innerText = "$" + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resNetProfit").innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resROI").innerText = roi.toFixed(1) + "%";
document.getElementById("solar-results").style.display = "block";
}