Post Office Ppf Interest Rate Calculator

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Solar Panel ROI & Savings Calculator

Estimate your payback period and long-term financial benefits of switching to solar power.

Net System Cost (after credits): $0
Estimated Annual Savings: $0
Payback Period (Years): 0 Years
25-Year Net Profit: $0
25-Year ROI Percentage: 0%

How Solar ROI is Calculated

Investing in solar panels is a long-term financial decision. To determine the Return on Investment (ROI), we look at several key factors: the upfront net cost, the annual energy production, and the local utility rates. Most homeowners in the United States see a solar payback period between 6 and 10 years.

Key Factors Influencing Your Savings

  • Federal Solar Tax Credit (ITC): Currently set at 30%, this is the largest incentive available, significantly reducing the "Net Cost" of your system.
  • Peak Sun Hours: Not all daylight is created equal. "Peak sun hours" refers to the intensity of sunlight. For instance, Arizona receives more peak hours than Washington, resulting in faster ROI.
  • Electricity Rates: The more your utility company charges per kilowatt-hour (kWh), the more money you save by producing your own power.
  • System Degradation: Solar panels typically lose about 0.5% efficiency per year. Our 25-year calculation accounts for this minor loss in production.

Example Calculation

If you purchase a 7kW system for $21,000:

  1. Tax Credit: $21,000 * 30% = $6,300 credit. Net cost = $14,700.
  2. Production: A 7kW system in a region with 4.5 sun hours produces roughly 11,500 kWh per year.
  3. Savings: At $0.16 per kWh, that is $1,840 in annual savings.
  4. Payback: $14,700 / $1,840 = ~8 years.

After the 8th year, all electricity generated by the panels is essentially free profit for the remainder of the system's 25+ year lifespan.

function calculateSolarROI() { var grossCost = parseFloat(document.getElementById('solar_system_cost').value); var taxCreditPct = parseFloat(document.getElementById('solar_tax_credit').value); var monthlyBill = parseFloat(document.getElementById('solar_bill').value); var rate = parseFloat(document.getElementById('solar_rate').value); var systemSize = parseFloat(document.getElementById('solar_size').value); var sunHours = parseFloat(document.getElementById('solar_sun').value); if (isNaN(grossCost) || isNaN(taxCreditPct) || isNaN(rate) || isNaN(systemSize) || isNaN(sunHours)) { alert("Please enter valid numbers in all fields."); return; } // 1. Calculate Net Cost var netCost = grossCost – (grossCost * (taxCreditPct / 100)); // 2. Calculate Annual Production and Savings // Formula: kW * Daily Sun Hours * 365 days var annualKwh = systemSize * sunHours * 365; var annualSavings = annualKwh * rate; // If the calculated savings exceed the current bill, we cap it (unless net metering pays cash, but usually it's a credit) var maxBillSavings = monthlyBill * 12; if (annualSavings > maxBillSavings) { annualSavings = maxBillSavings; } // 3. Payback Period var payback = netCost / annualSavings; // 4. 25-Year Forecast (assuming 0.5% degradation per year) var total25Savings = 0; for (var i = 0; i < 25; i++) { total25Savings += annualSavings * Math.pow(0.995, i); } var netProfit25 = total25Savings – netCost; var roiPct = (netProfit25 / netCost) * 100; // Update UI document.getElementById('res_net_cost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('res_annual_savings').innerText = '$' + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('res_payback').innerText = payback.toFixed(1) + ' Years'; document.getElementById('res_25_profit').innerText = '$' + netProfit25.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('res_roi_pct').innerText = roiPct.toFixed(1) + '%'; document.getElementById('solar_results').style.display = 'block'; }

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