Calculate your return on investment and estimated break-even time.
Your Results
Payback Period0 Years
Annual Savings$0.00
25-Year Net Profit$0.00
ROI (Annualized)0%
Understanding Solar Payback Period
The solar payback period is the time it takes for the savings on your electricity bill to equal the initial cost of installing your solar panel system. For most residential properties in the US, this period typically ranges between 6 and 10 years.
How This Calculation Works
To determine your ROI, we use a multi-step formula that considers several variables:
Net Investment: We subtract your tax credits (like the 30% Federal ITC) and local rebates from the gross system cost.
Annual Generation: Calculated as System Size (kW) × Sunlight Hours × Efficiency Factor (0.78).
Annual Savings: Calculated by multiplying the total kWh generated by your current utility rate.
Payback Period:Net Investment ÷ Annual Savings.
Key Factors Influencing Your ROI
1. Local Electricity Rates: The more you pay your utility company per kWh, the faster your solar panels will pay for themselves. This is why solar is extremely popular in states like California and Massachusetts.
2. Sunlight Exposure: Even if two houses have the same system size, the house in Arizona will have a shorter payback period than the house in Washington due to total annual irradiance.
3. Incentives: The Federal Investment Tax Credit (ITC) currently allows you to deduct 30% of your installation costs from your federal taxes, significantly accelerating your break-even point.
Example Calculation
If you purchase a 7kW system for $21,000 and receive a 30% tax credit ($6,300), your net cost is $14,700. If that system generates $1,800 worth of electricity annually, your payback period would be 8.16 years ($14,700 / $1,800).
function calculateSolarROI() {
var cost = parseFloat(document.getElementById('solar_cost').value);
var rebates = parseFloat(document.getElementById('solar_rebates').value) || 0;
var size = parseFloat(document.getElementById('solar_size').value);
var rate = parseFloat(document.getElementById('solar_rate').value);
var hours = parseFloat(document.getElementById('solar_hours').value);
var usage = parseFloat(document.getElementById('solar_usage').value);
if (isNaN(cost) || isNaN(size) || isNaN(rate) || isNaN(hours)) {
alert("Please enter valid numbers for cost, size, rate, and sunlight hours.");
return;
}
// Efficiency derate factor (standard loss for wiring, inverter, etc)
var derate = 0.78;
// Annual generation in kWh
var annualKwh = size * hours * derate;
// Annual dollar savings
var annualSavings = annualKwh * rate;
// Net cost after incentives
var netCost = cost – rebates;
if (annualSavings <= 0) {
alert("Annual savings must be greater than zero. Check your rate or sunlight hours.");
return;
}
var paybackYears = netCost / annualSavings;
var netProfit25 = (annualSavings * 25) – netCost;
var annualROI = (annualSavings / netCost) * 100;
// Display Results
document.getElementById('solar_result_box').style.display = 'block';
document.getElementById('res_payback').innerText = paybackYears.toFixed(1) + " Years";
document.getElementById('res_savings').innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_profit').innerText = "$" + netProfit25.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('res_roi').innerText = annualROI.toFixed(1) + "%";
// Scroll to results
document.getElementById('solar_result_box').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}