Solar Panel ROI Calculator
Calculate your solar payback period and long-term savings.
Gross price before incentives.
Typical residential: 5kW – 10kW.
Find this on your utility bill.
US average is roughly 4-5 hours.
Current ITC is 30% through 2032.
State or local cash incentives.
Your Investment Summary
Net Investment
$0
Annual Savings
$0
Payback Period
0 Years
Total 25-Year Profit: $0
Understanding Your Solar Return on Investment (ROI)
Investing in solar panels is one of the most effective ways for homeowners to reduce their carbon footprint while simultaneously increasing their property value. But the primary question most homeowners ask is: "How long until the panels pay for themselves?"
Key Factors in Solar Payback Calculations
- Net System Cost: This is the sticker price minus the Federal Investment Tax Credit (ITC), which currently sits at 30%, and any local utility rebates.
- Energy Production: This depends on your system's size and geographic location. We use a standard 78% efficiency derate factor to account for inverter losses and wiring.
- Utility Rates: The more you pay per kilowatt-hour (kWh) to your utility company, the more money you save by producing your own power.
- Solar Access: Daily peak sun hours vary by state. California and Arizona homeowners will see a faster ROI than those in Washington or Maine due to higher sun exposure.
Example Calculation
If you purchase a 7kW system for $20,000:
- Tax Credit: You receive a $6,000 federal tax credit (30%).
- Net Cost: Your actual out-of-pocket cost is $14,000.
- Production: In a region with 4.5 sun hours, you generate roughly 8,900 kWh per year.
- Savings: At $0.16/kWh, you save $1,424 annually.
- Payback: $14,000 / $1,424 = 9.8 years.
Most solar panels are warrantied for 25 years, meaning after your payback period, you enjoy 15+ years of virtually free electricity.