Estimate your return on investment and breakeven point
Estimated Payback Period0 Years
Net Cost$0
25-Year Savings$0
How is Solar Payback Calculated?
The solar payback period is the time it takes for the electricity bill savings generated by your solar panel system to equal the initial net cost of the installation. For most homeowners in the United States, this period typically falls between 6 and 10 years.
Key Components of the Formula:
Gross System Cost: The total price paid to the installer for equipment, labor, and permits.
Incentives: This includes the 30% Federal Investment Tax Credit (ITC), state rebates, and local utility performance-based incentives.
Energy Value: The amount of money you avoid paying your utility company, adjusted for the fact that electricity prices generally rise by 2-4% annually.
Example Calculation:
Imagine a 10kW system costing $25,000. After the 30% federal tax credit ($7,500), your net cost is $17,500. If that system saves you $2,100 per year ($175/month) and utility rates rise 3% annually, your payback period would be approximately 7.6 years. Over 25 years, the total savings would exceed $76,000.
Why the Payback Period Matters
A shorter payback period means a higher Return on Investment (ROI). Since most modern solar panels are warrantied for 25 years, a 7-year payback period provides 18 years of virtually free electricity. Factors like your roof's orientation, local sunlight levels (irradiance), and your specific utility's "Net Metering" policy will significantly influence these numbers.
function calculateSolarPayback() {
var grossCost = parseFloat(document.getElementById('sysCost').value);
var rebates = parseFloat(document.getElementById('rebates').value) || 0;
var monthlySavings = parseFloat(document.getElementById('monthlySavings').value);
var rateIncrease = parseFloat(document.getElementById('rateIncrease').value) / 100;
if (isNaN(grossCost) || isNaN(monthlySavings) || grossCost <= 0 || monthlySavings <= 0) {
alert("Please enter valid positive numbers for system cost and monthly savings.");
return;
}
var netCost = grossCost – rebates;
var annualSavings = monthlySavings * 12;
var cumulativeSavings = 0;
var years = 0;
var total25YearSavings = 0;
var foundPayback = false;
var paybackYear = 0;
// Calculate year by year to account for rate escalation
for (var i = 1; i = netCost) {
// Basic linear interpolation for fractional year
var previousSavings = cumulativeSavings – currentYearSavings;
var neededInLastYear = netCost – previousSavings;
paybackYear = (i – 1) + (neededInLastYear / currentYearSavings);
foundPayback = true;
}
}
// Display Results
document.getElementById('solarResult').style.display = 'block';
if (foundPayback) {
document.getElementById('yearsOutput').innerText = paybackYear.toFixed(1) + " Years";
} else {
document.getElementById('yearsOutput').innerText = "> 25 Years";
}
document.getElementById('netCostOutput').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('longTermOutput').innerText = "$" + total25YearSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Scroll to result on mobile
document.getElementById('solarResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}