Mortgage Calculator Maryland

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Solar Panel Payback & ROI Calculator

Financial Summary

Net System Cost:

Year 1 Savings:

Payback Period:

25-Year Total ROI:

*Estimates include a 0.5% annual panel degradation and projected utility rate hikes.

function calculateSolarROI() { var cost = parseFloat(document.getElementById('systemCost').value); var taxCreditPct = parseFloat(document.getElementById('taxCredit').value) / 100; var size = parseFloat(document.getElementById('systemSize').value); var rate = parseFloat(document.getElementById('elecRate').value); var hours = parseFloat(document.getElementById('sunHours').value); var escalation = parseFloat(document.getElementById('priceIncrease').value) / 100; if (isNaN(cost) || isNaN(size) || isNaN(rate) || isNaN(hours)) { alert("Please enter valid numbers in all fields."); return; } var netCost = cost – (cost * taxCreditPct); // Annual Production (kWh) = Size (kW) * Sun Hours * 365 * system efficiency (approx 0.78 for losses) var annualProduction = size * hours * 365 * 0.78; var year1Savings = annualProduction * rate; var totalSavings = 0; var currentRate = rate; var currentProduction = annualProduction; var paybackYear = 0; var runningTotal = 0; var foundPayback = false; for (var year = 1; year = netCost) { paybackYear = year – 1 + ((netCost – (runningTotal – yearlySavings)) / yearlySavings); foundPayback = true; } currentRate *= (1 + escalation); currentProduction *= 0.995; // 0.5% degradation } var totalROI = ((totalSavings – netCost) / netCost) * 100; document.getElementById('netCostDisplay').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('year1SavingsDisplay').innerText = "$" + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('paybackDisplay').innerText = (foundPayback ? paybackYear.toFixed(1) : ">25″) + " Years"; document.getElementById('roiDisplay').innerText = totalROI.toFixed(1) + "%"; document.getElementById('solar-results').style.display = 'block'; }

How Does the Solar Payback Calculator Work?

Switching to solar energy is a significant financial decision. This Solar Panel Payback Calculator helps you estimate how long it will take for your electricity savings to cover the initial cost of your installation. To get an accurate result, we factor in incentives, local sun exposure, and the rising cost of utility power.

Key Variables Explained

  • Total System Cost: The "sticker price" of your solar installation including equipment, labor, and permits.
  • Federal Tax Credit: Currently, the Investment Tax Credit (ITC) allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes.
  • System Size (kW): Most residential systems range from 5kW to 15kW. A larger system costs more but generates more electricity.
  • Sun Hours: This isn't just daylight; it's "peak sun hours." Areas like Arizona have higher peak hours than regions like the Pacific Northwest.

The Math Behind the ROI

Our calculator uses a sophisticated formula to determine your Return on Investment. We don't just divide cost by current savings; we account for:

  1. Energy Degradation: Solar panels lose about 0.5% efficiency every year.
  2. Utility Inflation: Electricity prices historically rise by 2-4% annually. As utility prices go up, your solar savings become more valuable.
  3. Net Cost: We calculate the actual out-of-pocket cost after the 30% federal incentive is applied.

Example Calculation

User Scenario: A homeowner in Florida installs an 8kW system for $20,000.

  • After the 30% Tax Credit, the cost drops to $14,000.
  • At 5 peak sun hours per day, the system generates roughly 11,388 kWh per year.
  • At $0.15/kWh, the Year 1 savings are $1,708.
  • Factoring in a 3% utility hike annually, the payback period is approximately 7.2 years.
  • Over 25 years, the total profit (savings minus cost) exceeds $45,000.

Is Solar a Good Investment for You?

Generally, if your solar payback period is under 10 years, it is considered an excellent financial investment. Given that most solar panels carry a 25-year warranty, you will enjoy at least 15 years of essentially "free" electricity after the system has paid for itself. Additionally, solar installations can increase property value, which is not factored into this calculation but provides an additional financial cushion.

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