function calculateSolarROI() {
var systemSize = parseFloat(document.getElementById('systemSize').value);
var totalCost = parseFloat(document.getElementById('totalCost').value);
var incentives = parseFloat(document.getElementById('incentives').value);
var elecRate = parseFloat(document.getElementById('elecRate').value);
var prodRatio = parseFloat(document.getElementById('prodRatio').value);
var priceIncrease = parseFloat(document.getElementById('priceIncrease').value) / 100;
if (isNaN(systemSize) || isNaN(totalCost) || isNaN(elecRate) || systemSize <= 0) {
alert("Please enter valid positive numbers for system size, cost, and rates.");
return;
}
var netCost = totalCost – incentives;
var annualProduction = systemSize * prodRatio;
var currentYearSavings = annualProduction * elecRate;
var cumulativeSavings = 0;
var yearsToPayback = 0;
var tempSavings = 0;
var totalSavings25 = 0;
// Calculate Payback with Price Escalation
var currentRate = elecRate;
for (var year = 1; year <= 25; year++) {
var yearlySavings = annualProduction * currentRate;
totalSavings25 += yearlySavings;
if (cumulativeSavings = netCost) {
var previousCumulative = cumulativeSavings – (annualProduction * (currentRate / Math.pow(1 + priceIncrease, 1)));
var excessNeeded = netCost – (cumulativeSavings – (annualProduction * (currentRate / Math.pow(1 + priceIncrease, 1))));
// Simplified fractional logic
yearsToPayback = (yearsToPayback – 1) + (netCost – (cumulativeSavings – (annualProduction * (currentRate / Math.pow(1 + priceIncrease, 1))))) / (annualProduction * (currentRate / Math.pow(1 + priceIncrease, 1)));
if(yearsToPayback < 0) yearsToPayback = netCost / currentYearSavings;
}
var netProfit = totalSavings25 – netCost;
var annualROI = ((totalSavings25 / netCost) / 25) * 100;
document.getElementById('netCostResult').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('paybackResult').innerText = yearsToPayback.toFixed(1) + " Years";
document.getElementById('totalSavingsResult').innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiPercentageResult').innerText = annualROI.toFixed(2) + "%";
document.getElementById('results-area').style.display = 'block';
}
Understanding Your Solar Panel ROI
Investing in residential solar power is more than an environmental choice; it is a significant financial decision. To calculate your Solar Panel Return on Investment (ROI), you must look beyond the initial sticker price and consider the long-term offsets against rising utility costs.
Key Components of the Calculation
Net System Cost: This is the gross price of equipment and installation minus the Federal Investment Tax Credit (ITC), which currently offers a 30% credit, and any local state rebates.
Solar Production Ratio: This represents how much energy your system produces relative to its size. A 6kW system in sunny Arizona will produce significantly more than the same system in cloudy Seattle.
Utility Inflation: Electricity prices historically rise between 2% and 4% annually. Solar locks in your energy rate, meaning your savings actually grow every year as grid power becomes more expensive.
What is a "Good" Payback Period?
In the United States, most homeowners see a solar payback period of 6 to 10 years. Given that modern Tier-1 solar panels are warrantied for 25 years, this leaves 15 to 19 years of essentially "free" electricity. Factors that shorten your payback period include high local electricity rates and south-facing roofs with no shading.
Pro Tip: When using the calculator, check your most recent utility bill for your "Price per kWh." This ensures your ROI estimate reflects your local market accurately.
Example Scenario
Imagine a homeowner installs a 8kW system costing $24,000. After the 30% Federal Tax Credit ($7,200), the net cost is $16,800. If the system produces 11,600 kWh per year and the utility rate is $0.16, the first-year savings are $1,856. With a 3% annual energy price hike, the system would pay for itself in roughly 8.2 years, generating over $50,000 in net profit over its 25-year lifespan.