How much of your bill the solar replaces (usually 100%).
Please enter valid positive numbers for cost and bill.
Break-Even Point (Payback Period)
— Years
—
Net System Cost
$0
After tax credits & rebates
25-Year Lifetime Savings
$0
Total profit after paying off system
How to Calculate Your Solar Payback Period
Investing in solar energy is a significant financial decision. The Solar Payback Period is the amount of time it takes for your solar power system to "pay for itself" through savings on your electricity bill. Once this period ends, the electricity your panels generate is essentially free, resulting in pure profit.
This calculator determines your break-even point by analyzing your upfront costs against your monthly energy savings, adjusting for the inevitable rise in utility prices (energy inflation).
Understanding the Inputs
To get the most accurate result from the calculator above, it helps to understand the key variables:
Gross System Cost: This is the "sticker price" of your solar installation before any discounts or tax breaks. It includes equipment (panels, inverters) and labor.
Federal Tax Credit (ITC): The US government offers a tax credit (currently 30% through 2032) that directly reduces your federal tax liability. This significantly lowers the net cost of the system.
Energy Inflation: Electricity rates rarely stay flat. On average, utility rates in the US increase by about 3% to 5% per year. This calculator factors this in, showing how your savings accelerate over time as grid power becomes more expensive.
Bill Offset: Most systems are designed to cover 100% of your usage. If your system is smaller, you might only offset 80%. If it's larger, you might offset 110% (provided your utility offers net metering).
Formula for Solar ROI
The return on investment (ROI) for solar is calculated using the following logic:
Calculate Net Cost: Gross Cost – (Gross Cost × Tax Credit %) – State Incentives.
Calculate First Year Savings: (Monthly Bill × 12) × (Bill Offset %).
Compound Savings: Since utility rates rise, your savings grow every year. We project this over 25 years (the standard warranty life of panels).
Determine Break-Even: We track the cumulative savings year by year. The moment cumulative savings exceed the Net Cost, you have reached your payback period.
Is Solar Worth It?
Generally, a payback period between 6 to 9 years is considered excellent. Given that solar panels are warrantied for 25 years and often last longer, a 7-year payback means you enjoy 18+ years of free electricity. In states with high electricity rates (like California or Massachusetts) or strong local incentives, payback periods can be as short as 4-5 years.
function calculateSolarROI() {
// 1. Get Inputs using var
var grossCost = parseFloat(document.getElementById('grossCost').value);
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var taxCredit = parseFloat(document.getElementById('taxCredit').value);
var stateIncentives = parseFloat(document.getElementById('stateIncentives').value);
var energyInflation = parseFloat(document.getElementById('energyInflation').value);
var billOffset = parseFloat(document.getElementById('billOffset').value);
// 2. Validation
var errorMsg = document.getElementById('errorMsg');
var resultsArea = document.getElementById('results-area');
if (isNaN(grossCost) || isNaN(monthlyBill) || grossCost <= 0 || monthlyBill <= 0) {
errorMsg.style.display = 'block';
resultsArea.style.display = 'none';
return;
}
// Handle optional inputs defaulting to 0 if empty/NaN
if (isNaN(taxCredit)) taxCredit = 0;
if (isNaN(stateIncentives)) stateIncentives = 0;
if (isNaN(energyInflation)) energyInflation = 0;
if (isNaN(billOffset)) billOffset = 100;
errorMsg.style.display = 'none';
resultsArea.style.display = 'block';
// 3. Calculation Logic
// Calculate Net Cost
var taxCreditAmount = grossCost * (taxCredit / 100);
var netCost = grossCost – taxCreditAmount – stateIncentives;
// Calculate First Year Annual Savings
// (Monthly Bill * 12) * (Offset Percentage)
var annualSavings = (monthlyBill * 12) * (billOffset / 100);
// Loop to find Payback Period
var cumulativeSavings = 0;
var paybackYears = 0;
var reachedPayback = false;
var year = 0;
var maxYears = 25; // Standard solar lifespan
// Array to store cash flow for potential chart usage later or detailed breakdown
var yearlyCashFlow = [];
for (var i = 1; i = netCost) {
// Calculate fractional year for precision
// Previous cumulative
var prevCumulative = cumulativeSavings – annualSavings;
var remainingCost = netCost – prevCumulative;
var fraction = remainingCost / annualSavings;
paybackYears = (i – 1) + fraction;
reachedPayback = true;
}
// Apply inflation for next year
annualSavings = annualSavings * (1 + (energyInflation / 100));
}
// Calculate Lifetime Savings (Net)
// Cumulative Savings at year 25 minus the initial Net Cost
var totalLifetimeSavings = cumulativeSavings – netCost;
// 4. Formatting and Display
// Payback Period Display
var paybackDisplay = document.getElementById('paybackPeriod');
var paybackDateDisplay = document.getElementById('paybackDate');
if (reachedPayback) {
paybackDisplay.innerHTML = paybackYears.toFixed(1) + " Years";
// Calculate approximate date
var currentDate = new Date();
var futureYear = currentDate.getFullYear() + Math.floor(paybackYears);
var remainingMonths = Math.round((paybackYears % 1) * 12);
// Simple month logic
var futureMonth = currentDate.getMonth() + remainingMonths;
if (futureMonth > 11) {
futureYear++;
futureMonth -= 12;
}
var monthNames = ["Jan", "Feb", "Mar", "Apr", "May", "Jun", "Jul", "Aug", "Sep", "Oct", "Nov", "Dec"];
paybackDateDisplay.innerHTML = "ROI reached by approx " + monthNames[futureMonth] + " " + futureYear;
} else {
paybackDisplay.innerHTML = "25+ Years";
paybackDateDisplay.innerHTML = "Savings do not cover cost within warranty period";
}
// Net Cost Display
document.getElementById('netCostDisplay').innerHTML = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Lifetime Savings Display
var lifetimeElem = document.getElementById('lifetimeSavings');
lifetimeElem.innerHTML = "$" + totalLifetimeSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Color coding for lifetime savings
if (totalLifetimeSavings > 0) {
lifetimeElem.style.color = "#27ae60";
} else {
lifetimeElem.style.color = "#c0392b"; // Red if negative
}
}