*Assuming 3% annual electricity price inflation and 0.5% system degradation.
Understanding Your Solar Investment
Switching to solar energy is one of the most effective ways to reduce your carbon footprint while locking in long-term financial savings. This calculator helps you estimate the financial viability of a photovoltaic (PV) system based on your specific local conditions and costs.
Key Variables Explained
Peak Sun Hours: This isn't just daylight; it refers to the intensity of sunlight. Most US locations average between 3.5 and 6 peak sun hours per day.
System Derate Factor: No solar system is 100% efficient. Our calculator assumes a standard 78% efficiency factor to account for inverter losses, wiring resistance, and panel soiling.
The Federal Investment Tax Credit (ITC): Currently set at 30% through 2032, this allows you to deduct a significant portion of your installation costs from your federal taxes.
How We Calculate Your ROI
To find your payback period, we first determine the net cost by subtracting the federal tax credit from your total installation price. We then calculate your annual energy production using the formula: System Size (kW) × Peak Sun Hours × 365 days × 0.78 (Efficiency).
Your annual savings are calculated by multiplying that production by your current electricity rate. The payback period is simply the Net Cost divided by Annual Savings.
Real-World Example
Imagine a homeowner in Arizona with a $150 monthly bill ($0.15/kWh). They install a 6kW system costing $18,000.
Net Cost: $18,000 – 30% ITC ($5,400) = $12,600.
Production: 6kW × 5.5 sun hours × 365 × 0.78 = 9,391 kWh per year.
Annual Savings: 9,391 kWh × $0.15 = $1,408 per year.
Payback Period: $12,600 / $1,408 = 8.9 Years.
Over 25 years, factoring in rising utility costs, this homeowner could save over $45,000.
function calculateSolarROI() {
var monthlyBill = parseFloat(document.getElementById('solar_monthly_bill').value);
var rateKwh = parseFloat(document.getElementById('solar_price_kwh').value);
var systemSize = parseFloat(document.getElementById('solar_system_size').value);
var sunHours = parseFloat(document.getElementById('solar_sun_hours').value);
var totalCost = parseFloat(document.getElementById('solar_total_cost').value);
var taxCreditPercent = parseFloat(document.getElementById('solar_tax_credit').value);
if (isNaN(monthlyBill) || isNaN(rateKwh) || isNaN(systemSize) || isNaN(sunHours) || isNaN(totalCost)) {
alert("Please enter valid numbers in all fields.");
return;
}
// 1. Calculate Net Cost
var taxCreditAmount = totalCost * (taxCreditPercent / 100);
var netCost = totalCost – taxCreditAmount;
// 2. Calculate Annual Production (using 0.78 derate factor)
var annualProduction = systemSize * sunHours * 365 * 0.78;
// 3. Annual Savings (Year 1)
var annualSavingsYear1 = annualProduction * rateKwh;
// 4. Payback Period
var paybackPeriod = netCost / annualSavingsYear1;
// 5. 25-Year Savings (Logic: 3% energy inflation, 0.5% degradation)
var cumulativeSavings = 0;
var currentYearSavings = annualSavingsYear1;
var currentYearProduction = annualProduction;
var currentRate = rateKwh;
for (var i = 1; i <= 25; i++) {
cumulativeSavings += (currentYearProduction * currentRate);
currentYearProduction *= 0.995; // 0.5% degradation
currentRate *= 1.03; // 3% inflation
}
var netTotalSavings = cumulativeSavings – netCost;
// Display Results
document.getElementById('solar_results').style.display = 'block';
document.getElementById('res_net_cost').innerHTML = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('res_production').innerHTML = annualProduction.toLocaleString(undefined, {maximumFractionDigits: 0}) + ' kWh';
document.getElementById('res_annual_savings').innerHTML = '$' + annualSavingsYear1.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('res_payback').innerHTML = paybackPeriod.toFixed(1) + ' Years';
document.getElementById('res_total_savings').innerHTML = '$' + netTotalSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Scroll to results
document.getElementById('solar_results').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}