Estimate how many years it will take for your solar energy system to pay for itself through energy savings.
Net Investment (After Credits):$0.00
Estimated Monthly Generation:0 kWh
Estimated Monthly Savings:$0.00
Payback Period:0.0 Years
25-Year Total Savings:$0.00
How Is Solar Payback Calculated?
The solar payback period is the time it takes for the cumulative energy savings from your solar panels to equal the initial net cost of the system. To find this, we use the following formula:
Net Cost / Annual Savings = Payback Period (Years)
Key Factors Influencing Your ROI
The Federal Solar Tax Credit (ITC): In the U.S., the Residential Clean Energy Credit allows you to deduct 30% of your solar installation costs from your federal taxes, significantly reducing the "Net Cost."
Local Electricity Rates: The more you pay your utility company per kilowatt-hour (kWh), the more you save by generating your own power. Areas with high electricity rates see much faster payback periods.
Peak Sun Hours: This isn't just daylight; it's the amount of time sun intensity averages 1,000 Watts per square meter. Places like Arizona or California have higher peak sun hours than the Pacific Northwest.
System Degradation: Most solar panels lose about 0.5% efficiency per year. High-quality panels maintain higher output for decades, improving long-term ROI.
Real-World Example
If you install a 6kW system for $18,000, and you qualify for a 30% tax credit, your net cost is $12,600. If that system generates $150 worth of electricity every month ($1,800/year), your payback period would be 7 years ($12,600 / $1,800). After year 7, the electricity your panels produce is essentially free profit for the remainder of the system's 25-30 year lifespan.
function calculateSolarROI() {
var cost = parseFloat(document.getElementById('systemCost').value);
var incentive = parseFloat(document.getElementById('solarIncentive').value);
var size = parseFloat(document.getElementById('systemSize').value);
var rate = parseFloat(document.getElementById('electricityRate').value);
var hours = parseFloat(document.getElementById('sunHours').value);
var bill = parseFloat(document.getElementById('monthlyBill').value);
if (isNaN(cost) || isNaN(size) || isNaN(rate) || isNaN(hours)) {
alert("Please fill in all fields with valid numbers.");
return;
}
// Calculate Net Cost
var netCost = cost – (cost * (incentive / 100));
// Calculate Generation
// kWh = System size (kW) * Peak sun hours * days
var monthlyGen = size * hours * 30.42;
// Savings (capped by current bill or actual generation value)
var estimatedMonthlySavings = monthlyGen * rate;
// Simple Payback
var annualSavings = estimatedMonthlySavings * 12;
var paybackYears = netCost / annualSavings;
// 25 Year Savings (Considering 0.5% degradation)
var totalSavings = 0;
var currentAnnualSaving = annualSavings;
for (var i = 1; i <= 25; i++) {
totalSavings += currentAnnualSaving;
currentAnnualSaving = currentAnnualSaving * 0.995;
}
var netProfit = totalSavings – netCost;
// Update UI
document.getElementById('resNetCost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resMonthlyGen').innerText = Math.round(monthlyGen) + " kWh";
document.getElementById('resMonthlySavings').innerText = "$" + estimatedMonthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resPaybackYears').innerText = paybackYears.toFixed(1) + " Years";
document.getElementById('resTotalSavings').innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('solarResult').style.display = 'block';
}