Calculate your potential savings and payback period for a residential solar system.
0Years to Payback
$0Net System Cost
$025-Year Savings
ROI: 0%
Understanding Your Solar Investment
Switching to solar power is one of the most significant financial and environmental decisions a homeowner can make. This calculator helps you determine the Return on Investment (ROI) by analyzing your upfront costs against the long-term energy savings.
How the Calculation Works
To provide an accurate estimate, the calculator looks at several specific variables:
Net System Cost: This is your gross purchase price minus the Federal Investment Tax Credit (ITC), which is currently 30% for systems installed through 2032.
Annual Production: Calculated as: System Size (kW) × Daily Sun Hours × 365 days × 0.78 (Standard Efficiency Factor).
Annual Savings: We multiply your annual production by your local utility rate, adjusted annually for inflation (energy costs typically rise 2-4% per year).
Payback Period: The amount of time it takes for your cumulative energy savings to equal the net cost of the solar system.
What Factors Influence Solar ROI?
No two solar installations are identical. Your specific ROI will be influenced by:
Geographic Location: Homeowners in Arizona will generate more power per panel than those in Washington due to higher peak sun hours.
Roof Orientation: South-facing roofs generally yield the highest energy production in the Northern Hemisphere.
Local Utility Rates: The more you pay for electricity now, the more you save by switching to solar. High-rate states like California or Massachusetts often see faster payback periods.
Net Metering Policies: Some states allow you to "sell" excess energy back to the grid at retail rates, while others offer lower wholesale rates.
Real-World Example
Imagine a homeowner installs a 7 kW system for $21,000. After the 30% Federal Tax Credit, the net cost drops to $14,700. If they live in an area with 5 sun hours per day and pay $0.15/kWh, they might save roughly $1,500 in the first year. With energy inflation, they could reach the "break-even" point in approximately 8.5 years. Over the 25-year lifespan of the panels, the total savings could exceed $50,000.
function calculateSolarROI() {
// Get Input Values
var grossCost = parseFloat(document.getElementById('solar_system_cost').value);
var kwSize = parseFloat(document.getElementById('solar_system_size').value);
var taxCreditPercent = parseFloat(document.getElementById('solar_tax_credit').value);
var electricRate = parseFloat(document.getElementById('solar_electric_rate').value);
var dailySunHours = parseFloat(document.getElementById('solar_sun_hours').value);
var inflationRate = parseFloat(document.getElementById('solar_annual_increase').value) / 100;
// Validate inputs
if (isNaN(grossCost) || isNaN(kwSize) || isNaN(electricRate) || grossCost <= 0) {
alert("Please enter valid numbers for cost, size, and electricity rate.");
return;
}
// 1. Calculate Net Cost
var netCost = grossCost – (grossCost * (taxCreditPercent / 100));
// 2. Annual Energy Production (Estimated with 78% system efficiency factor for AC conversion/soiling)
var annualKwhGen = kwSize * dailySunHours * 365 * 0.78;
// 3. Calculate Payback and 25-Year Savings
var cumulativeSavings = 0;
var currentRate = electricRate;
var paybackYear = 0;
var foundPayback = false;
var total25YearSavings = 0;
for (var year = 1; year = netCost) {
// Linear interpolation for more accurate payback year
var shortFall = netCost – (cumulativeSavings – yearlySaving);
paybackYear = (year – 1) + (shortFall / yearlySaving);
foundPayback = true;
}
currentRate *= (1 + inflationRate);
if (year === 25) {
total25YearSavings = cumulativeSavings – netCost;
}
}
// 4. ROI Percentage (Total Profit / Net Cost)
var roiPercent = (total25YearSavings / netCost) * 100;
// Display Results
document.getElementById('res_payback').innerText = paybackYear > 0 ? paybackYear.toFixed(1) : "25+";
document.getElementById('res_net_cost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('res_savings').innerText = "$" + total25YearSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('res_roi_percent').innerText = roiPercent.toLocaleString(undefined, {minimumFractionDigits: 1, maximumFractionDigits: 1});
document.getElementById('solar_results_area').style.display = 'block';
}