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Solar Panel ROI & Savings Calculator

Determine your break-even point and long-term energy savings.

Investment Analysis

Net Cost:

Annual Savings:

Payback Period:

25-Year Profit:

function calculateSolarROI() { var cost = parseFloat(document.getElementById('solarCost').value); var credit = parseFloat(document.getElementById('taxCredit').value); var kwh = parseFloat(document.getElementById('monthlyKwh').value); var rate = parseFloat(document.getElementById('elecRate').value); var resultDiv = document.getElementById('solarResult'); if (isNaN(cost) || isNaN(credit) || isNaN(kwh) || isNaN(rate)) { alert("Please fill in all fields with valid numbers."); return; } var netCost = cost – (cost * (credit / 100)); var annualSavings = kwh * rate * 12; var payback = netCost / annualSavings; var savings25 = (annualSavings * 25) – netCost; document.getElementById('netCostDisplay').innerHTML = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('annualSavingsDisplay').innerHTML = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('paybackDisplay').innerHTML = payback.toFixed(1) + " Years"; document.getElementById('profitDisplay').innerHTML = "$" + savings25.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); resultDiv.style.display = 'block'; }

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How to Calculate Solar ROI

Investing in residential solar panels is a significant financial decision. To understand if it's worth it for your home, you need to look beyond the initial sticker price and evaluate the Return on Investment (ROI) and the Payback Period.

Key Factors in the Calculation

• Gross System Cost: The total price of equipment, labor, and permitting before any incentives.
• Federal Investment Tax Credit (ITC): As of 2024, the federal government offers a 30% tax credit on the total cost of solar installation.
• Electricity Rate: The more you pay your utility company per kilowatt-hour (kWh), the more money your solar panels save you.
• Solar Production: Depends on your geographical location, roof orientation, and shading.

The Solar Payback Formula

The math behind the payback period is straightforward:

Payback Period = (Total Cost – Incentives) / Annual Electricity Savings

Example Scenario

Imagine a homeowner in California with the following setup:

Factor	Value
Gross Cost	$25,000
30% Tax Credit	-$7,500
Net Investment	$17,500
Monthly Savings	$200
Payback Period	7.2 Years

Long-Term Financial Benefits

Most modern solar panels are warrantied for 25 years. After the payback period is met (usually between 6 to 10 years), the electricity generated is essentially free. Over the remaining 15+ years, a solar system can generate tens of thousands of dollars in pure profit while increasing the resale value of your property.