Estimate your payback period and long-term energy savings.
Net System Cost:$0.00
First Year Savings:$0.00
Payback Period:0 Years
Total 25-Year Savings:$0.00
Lifetime ROI:0%
How to Calculate Your Solar ROI
Switching to solar energy is a significant investment. Understanding your Return on Investment (ROI) requires looking at more than just the upfront sticker price. To accurately calculate your solar payback, you must account for the Federal Investment Tax Credit (ITC), local utility rebates, and the compounding cost of grid electricity.
Key Factors Influencing Your Payback Period
The Federal Solar Tax Credit: Currently, the residential clean energy credit allows you to deduct 30% of your solar installation costs from your federal taxes. This is the single largest factor in reducing your "Net Cost."
Net Metering: If your state has favorable net metering laws, you can sell excess energy generated during the day back to the grid, effectively running your meter backward and zeroing out your bill.
Energy Inflation: On average, utility rates increase by 2.5% to 4% annually. Every year you own your solar system, the energy you "generate" becomes more valuable as grid prices rise.
Sunlight Exposure: A system in Arizona will reach ROI faster than the same system in Washington state due to the total Peak Sun Hours available per day.
Understanding the Results
A typical residential solar system in the United States currently sees a payback period between 6 to 10 years. Given that most solar panels come with a 25-year warranty, you can expect 15+ years of virtually free electricity after the system has paid for itself.
Example Scenario: If you spend $20,000 on a system and receive a $6,000 tax credit, your net cost is $14,000. If that system saves you $150 a month ($1,800/year), your simple payback is roughly 7.7 years. However, when you factor in a 3% annual utility rate hike, that payback period often drops by nearly a full year.
function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById('systemCost').value);
var incentives = parseFloat(document.getElementById('incentives').value);
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var billCoverage = parseFloat(document.getElementById('billCoverage').value) / 100;
var annualIncrease = parseFloat(document.getElementById('annualIncrease').value) / 100;
var maintenance = parseFloat(document.getElementById('maintenance').value);
if (isNaN(systemCost) || isNaN(incentives) || isNaN(monthlyBill)) {
alert("Please enter valid numerical values.");
return;
}
var netCost = systemCost – incentives;
var firstYearSavings = (monthlyBill * 12 * billCoverage) – maintenance;
// Payback period and 25-year calculation with compound energy inflation
var currentYearSavings = firstYearSavings;
var cumulativeSavings = 0;
var paybackYears = 0;
var total25Savings = 0;
var foundPayback = false;
for (var i = 1; i = netCost) {
paybackYears = i – 1 + ((netCost – (cumulativeSavings – currentYearSavings)) / currentYearSavings);
foundPayback = true;
}
total25Savings = cumulativeSavings;
// Increase savings for next year based on energy inflation
currentYearSavings = currentYearSavings * (1 + annualIncrease);
}
var lifetimeProfit = total25Savings – netCost;
var roi = (lifetimeProfit / netCost) * 100;
// Display Results
document.getElementById('resultsBox').style.display = 'block';
document.getElementById('netCost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('yearOneSavings').innerText = '$' + firstYearSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (foundPayback) {
document.getElementById('paybackPeriod').innerText = paybackYears.toFixed(1) + ' Years';
} else {
document.getElementById('paybackPeriod').innerText = 'Over 25 Years';
}
document.getElementById('totalSavings').innerText = '$' + total25Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiPercentage').innerText = roi.toFixed(1) + '%';
// Smooth scroll to results
document.getElementById('resultsBox').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}