Estimate your potential savings and payback period for a residential solar system.
Estimated Monthly Production:0 kWh
Estimated Monthly Savings:$0.00
Estimated Annual Savings:$0.00
Net System Cost (after incentives):$0.00
Payback Period (ROI):0 Years
Understanding Solar Panel ROI
Switching to solar energy is one of the most effective ways for homeowners to reduce their carbon footprint while simultaneously cutting down on long-term utility expenses. However, calculating the true financial benefit requires looking at several variables beyond just the initial installation cost.
How the Calculation Works
To determine your potential savings, we analyze the relationship between your energy consumption and the production capacity of a photovoltaic (PV) system. The core formula involves:
Production: We multiply the system size (kW) by the average peak sun hours in your region, accounting for a standard efficiency loss of 22% (0.78 derate factor).
Financial Offset: The electricity produced is multiplied by your local utility rate to see how much of your bill is "wiped out."
Net Cost: We apply the Federal Solar Tax Credit (currently 30% in many regions) to the gross installation price to find your actual out-of-pocket investment.
Example Scenario
Imagine a homeowner in California with a $200 monthly bill paying $0.25/kWh. They install a 7kW system costing $21,000. With 5.5 hours of peak sun per day:
Monthly Production: ~900 kWh
Monthly Savings: ~$225 (this covers the entire bill and provides credits)
Net Cost after 30% Tax Credit: $14,700
Payback Period: Approximately 5.4 years. Given that panels last 25+ years, this represents nearly 20 years of free electricity.
Key Factors That Influence Savings
While this calculator provides a robust estimate, real-world performance depends on several environmental factors:
Roof Orientation: South-facing roofs in the northern hemisphere typically produce 15-20% more energy than east or west-facing roofs.
Shading: Nearby trees or structures that cast shadows on panels during peak hours (10 AM to 2 PM) can significantly drop efficiency.
Net Metering Policies: Some utility companies offer 1-to-1 credit for excess energy sent back to the grid, while others pay a lower "wholesale" rate.
Degradation: Solar panels generally lose about 0.5% efficiency per year, meaning a system will produce roughly 88% of its original power after 25 years.
function calculateSolarSavings() {
// Get Input Values
var monthlyBill = parseFloat(document.getElementById('solar_bill').value);
var ratePerKwh = parseFloat(document.getElementById('solar_rate').value);
var systemSizeKw = parseFloat(document.getElementById('solar_size').value);
var sunHours = parseFloat(document.getElementById('solar_sun').value);
var totalCost = parseFloat(document.getElementById('solar_cost').value);
var incentivePct = parseFloat(document.getElementById('solar_incentive').value);
// Validation
if (isNaN(monthlyBill) || isNaN(ratePerKwh) || isNaN(systemSizeKw) || isNaN(sunHours) || isNaN(totalCost)) {
alert("Please enter valid numbers in all fields.");
return;
}
// Calculations
// 0.78 is a standard derate factor accounting for inverter efficiency, wiring loss, and panel temperature
var dailyProduction = systemSizeKw * sunHours * 0.78;
var monthlyProduction = dailyProduction * 30.42; // Average days in month
var monthlySavings = monthlyProduction * ratePerKwh;
// Caps savings at the monthly bill (unless user has battery/net-metering profit,
// but for ROI we usually cap at 100% offset of current bill for conservative estimates)
var realisticMonthlySavings = monthlySavings;
var annualSavings = realisticMonthlySavings * 12;
var netCost = totalCost – (totalCost * (incentivePct / 100));
var paybackPeriod = netCost / annualSavings;
// Update Results
document.getElementById('res_prod').innerText = monthlyProduction.toFixed(0) + " kWh";
document.getElementById('res_mon_sav').innerText = "$" + realisticMonthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_ann_sav').innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_net_cost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (paybackPeriod > 0 && isFinite(paybackPeriod)) {
document.getElementById('res_payback').innerText = paybackPeriod.toFixed(1) + " Years";
} else {
document.getElementById('res_payback').innerText = "N/A";
}
// Show Result Box
document.getElementById('solar_results').style.display = 'block';
}