Estimate your payback period and long-term financial benefits of switching to solar energy.
Net Investment Cost (After Tax Credit)
Estimated Payback Period
Total 25-Year Savings
Lifetime Return on Investment (ROI)
How the Solar ROI Calculation Works
Calculating the Return on Investment (ROI) for solar panels involves more than just subtracting your bill from the system cost. To get an accurate picture, we analyze the Net System Cost, which accounts for the Federal Investment Tax Credit (ITC)—currently at 30% through 2032.
Key Factors Influencing Your Solar Payback
Energy Price Inflation: Electricity rates historically rise by about 2-3% annually. This makes solar more valuable every year as you "lock in" your rate.
Sunlight Exposure: Regions with higher peak sun hours (like Arizona or California) will see a faster ROI than cloudier regions.
Incentives: Beyond federal credits, state-level SRECs (Solar Renewable Energy Certificates) and local rebates can shave years off your payback period.
Example Calculation
If you install a system for $20,000 and receive a 30% tax credit ($6,000), your net cost is $14,000. If your solar panels eliminate a $150 monthly bill, you save $1,800 in the first year. Without considering inflation, your payback period would be roughly 7.7 years. Over 25 years, accounting for a 3% annual utility hike, those savings can exceed $60,000.
function calculateSolarROI() {
var grossCost = parseFloat(document.getElementById('systemCost').value);
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var taxCreditPerc = parseFloat(document.getElementById('taxCredit').value);
var inflationRate = parseFloat(document.getElementById('annualIncrease').value) / 100;
if (isNaN(grossCost) || isNaN(monthlyBill) || isNaN(taxCreditPerc)) {
alert("Please enter valid numerical values.");
return;
}
// 1. Calculate Net Cost
var netCost = grossCost – (grossCost * (taxCreditPerc / 100));
// 2. Calculate 25-Year Savings with Inflation
var totalSavings = 0;
var currentAnnualSavings = monthlyBill * 12;
for (var i = 0; i < 25; i++) {
totalSavings += currentAnnualSavings;
currentAnnualSavings *= (1 + inflationRate);
}
// 3. Calculate Payback Period
var paybackYears = 0;
var accumulatedSavings = 0;
var tempAnnualSavings = monthlyBill * 12;
for (var j = 1; j = netCost && paybackYears === 0) {
paybackYears = j – 1 + ((netCost – (accumulatedSavings – tempAnnualSavings)) / tempAnnualSavings);
break;
}
tempAnnualSavings *= (1 + inflationRate);
}
// 4. Calculate ROI Percentage
var totalProfit = totalSavings – netCost;
var roiPerc = (totalProfit / netCost) * 100;
// Display Results
document.getElementById('sol-results').style.display = 'block';
document.getElementById('netCostResult').innerHTML = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (paybackYears > 0) {
document.getElementById('paybackResult').innerHTML = paybackYears.toFixed(1) + ' Years';
} else {
document.getElementById('paybackResult').innerHTML = 'Over 50 Years';
}
document.getElementById('savingsResult').innerHTML = '$' + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiResult').innerHTML = roiPerc.toFixed(1) + '%';
// Smooth scroll to results
document.getElementById('sol-results').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}