Solar Panel ROI & Savings Calculator
Estimate your payback period and 25-year total savings
Average home uses 5kW to 10kW
National average is ~$2.50 – $3.50
Current federal ITC is 30%
Amount you will save per month
Historical average is 3-5%
Net System Cost
$0
Payback Period
0 Years
25-Year Total Savings
$0
25-Year Net Profit
$0
Understanding Your Solar Return on Investment
Investing in residential solar panels is more than just an environmental choice; it is one of the most stable financial investments a homeowner can make. By converting sunlight into electricity, you effectively lock in your energy rates for the next 25 to 30 years.
Key Factors in the ROI Calculation
- Gross Cost vs. Net Cost: The gross cost is the sticker price. The net cost accounts for the 30% Federal Investment Tax Credit (ITC) and any local state rebates.
- Energy Offset: Most systems are designed to cover 80% to 100% of your monthly usage. If your system produces more than you use, many utilities offer net metering credits.
- Utility Inflation: Electricity prices typically rise 3% to 5% annually. Solar protects you from these increases, making your savings grow every year.
Example Scenario
If you install a 7kW system at $3.00/watt, your gross cost is $21,000. After the 30% federal tax credit ($6,300), your net investment is $14,700. If you currently pay $160/month for electricity, your year-one savings are $1,920. Without accounting for rate hikes, your payback is roughly 7.6 years. However, when factoring in a 4% annual utility rate increase, that payback period often drops to under 7 years.