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Solar Panel Savings & ROI Calculator

Your Solar Financial Summary

Gross System Cost

$0

Net Cost (After Tax Credit)

$0

Estimated Yearly Savings

$0

Payback Period (Break-Even)

0 Years

Total 25-Year Estimated Savings

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Understanding Your Solar Investment & ROI

Switching to solar power is one of the most effective ways for homeowners to reduce their carbon footprint while simultaneously securing a high-return financial investment. But how do the numbers actually work? This calculator helps you break down the initial investment, the incentives available, and the long-term profitability of your photovoltaic (PV) system.

Key Factors in Solar Calculations

• System Size (kW): Most residential systems range from 5kW to 10kW. The size depends on your roof space and annual energy consumption.
• Cost Per Watt: This is the total "all-in" price of the system (panels, inverters, labor, permits) divided by the wattage. The national average typically hovers between $2.50 and $3.30 per watt.
• The ITC (Investment Tax Credit): Currently, the federal government offers a 30% tax credit on the total cost of solar installations, significantly reducing the "Net Cost."
• Energy Offset: Solar systems are designed to offset a percentage of your utility bill. Our calculator assumes a high-efficiency offset based on your current bill.

Calculation Example: A Typical 7kW System

Let's look at a realistic scenario for a homeowner with a $150 monthly electricity bill:

1. Gross Cost: A 7kW system at $3.00 per watt costs $21,000.
2. Tax Credit: A 30% Federal incentive provides a $6,300 credit.
3. Net Investment: Your actual out-of-pocket (or financed) cost is $14,700.
4. Annual Savings: If the system covers most of your $1,800 annual energy cost, your payback period would be roughly 8.1 years.

Long-Term Financial Benefits

Solar panels typically come with a 25-year warranty. After the "Payback Period" (usually 6–10 years), every dollar saved on electricity is pure profit. Additionally, solar installations are known to increase property values by an average of 4% in many US markets, often covering the entire cost of the system if the home is sold.

function calculateSolarROI() { var bill = parseFloat(document.getElementById("monthlyBill").value); var size = parseFloat(document.getElementById("systemSize").value); var cpw = parseFloat(document.getElementById("costPerWatt").value); var tax = parseFloat(document.getElementById("taxCredit").value); if (isNaN(bill) || isNaN(size) || isNaN(cpw) || isNaN(tax)) { alert("Please enter valid numerical values."); return; } // Calculation Logic var grossCost = (size * 1000) * cpw; var taxCreditAmount = grossCost * (tax / 100); var netCost = grossCost – taxCreditAmount; // Estimating savings // Average solar production is ~1500 kWh per kW per year in US // This is a simplified model for the calculator var annualBill = bill * 12; var estimatedAnnualSavings = annualBill * 0.95; // Assuming 95% offset var paybackYears = netCost / estimatedAnnualSavings; // 25-year lifetime savings (accounting for 3% energy price inflation) var lifetimeSavings = 0; var runningSavings = estimatedAnnualSavings; for (var i = 0; i < 25; i++) { lifetimeSavings += runningSavings; runningSavings *= 1.03; // 3% annual inflation of utility rates } var netLifetimeProfit = lifetimeSavings – netCost; // Display Results document.getElementById("grossCostDisplay").innerText = "$" + grossCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById("netCostDisplay").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById("yearlySavingsDisplay").innerText = "$" + estimatedAnnualSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById("paybackDisplay").innerText = paybackYears.toFixed(1) + " Years"; document.getElementById("lifetimeSavingsDisplay").innerText = "$" + netLifetimeProfit.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById("solar-results").style.display = "block"; }