Mortgage and Tax and Insurance Calculator

by

Solar Panel ROI Calculator

Investment Summary

Net System Cost:

Annual Energy Production:

Annual Savings:

Payback Period:

25-Year Total Profit:

Total ROI (25 Years):

function calculateSolarROI() { var cost = parseFloat(document.getElementById('systemCost').value); var size = parseFloat(document.getElementById('systemSize').value); var rate = parseFloat(document.getElementById('elecRate').value); var credit = parseFloat(document.getElementById('taxCredit').value); var sun = parseFloat(document.getElementById('sunlightHours').value); var rebate = parseFloat(document.getElementById('rebates').value); if (isNaN(cost) || isNaN(size) || isNaN(rate) || isNaN(sun)) { alert("Please fill in all required fields with valid numbers."); return; } // Calculations var creditAmount = cost * (credit / 100); var netCost = cost – creditAmount – rebate; // Average solar production formula: Size (kW) * Daily Sun Hours * 365 * 0.75 (efficiency factor) var annualProd = size * sun * 365 * 0.78; var annualSavings = annualProd * rate; var payback = netCost / annualSavings; var lifetimeSavings = (annualSavings * 25); var totalProfit = lifetimeSavings – netCost; var roiPercent = (totalProfit / netCost) * 100; // Display document.getElementById('resNetCost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resAnnualProd').innerText = annualProd.toFixed(0) + " kWh"; document.getElementById('resAnnualSavings').innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resPayback').innerText = payback.toFixed(1) + " Years"; document.getElementById('resTotalProfit').innerText = "$" + totalProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resROI').innerText = roiPercent.toFixed(1) + "%"; document.getElementById('results-area').style.display = 'block'; }

Understanding Your Solar Return on Investment (ROI)

Deciding to switch to solar energy is a major financial commitment. While the environmental benefits are clear, most homeowners want to know: Does the math work out? Our Solar Panel ROI Calculator helps you determine the financial viability of a solar installation by looking at the upfront costs, government incentives, and long-term energy savings.

Key Factors Influencing Your Solar Payback

  • The Federal Solar Tax Credit (ITC): As of 2024, the Investment Tax Credit allows you to deduct 30% of your solar installation costs from your federal taxes. This is a massive "discount" that significantly shortens your payback period.
  • Electricity Rates: The more you pay your utility company per kWh, the more money you save by producing your own power. ROI is typically higher in states like California or New York where electricity costs are above average.
  • Peak Sunlight Hours: This doesn't mean the time between sunrise and sunset, but rather the hours where the sun's intensity is sufficient to generate maximum power (roughly 1,000 Watts per square meter). Most locations in the US average between 3.5 and 6 peak sun hours per day.
  • System Efficiency: No solar panel is 100% efficient. Our calculator uses a standard derate factor of 0.78 to account for real-world conditions like dust, wiring loss, and inverter inefficiency.

Example Calculation

Imagine a homeowner in a sunny state with the following profile:

  • System Cost: $20,000 for a 7kW system.
  • Tax Credit: 30% ($6,000) reduction, making the net cost $14,000.
  • Annual Production: Roughly 9,500 kWh of energy per year.
  • Utility Rate: $0.18 per kWh.
  • Annual Savings: 9,500 * $0.18 = $1,710 saved per year.
  • Payback Period: $14,000 / $1,710 = 8.1 years.

After the 8-year mark, the electricity produced is essentially "free," leading to tens of thousands of dollars in profit over the 25-year lifespan of the panels.

Net Metering and ROI

A major driver of solar ROI is "Net Metering." This is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. If your panels produce more than you use, the meter runs backward. Before installing, check if your local utility offers 1-to-1 net metering or a reduced buy-back rate, as this will impact your annual savings.

Leave a Comment