Mortgage with Amortization Calculator

Solar Panel ROI & Payback Calculator

Financial Summary

Total Gross Cost:

Net Cost (After Tax Credit):

Estimated Payback Period:

25-Year Net Savings:

function calculateSolarROI() { var bill = parseFloat(document.getElementById('monthlyBill').value); var size = parseFloat(document.getElementById('systemSize').value); var cpw = parseFloat(document.getElementById('costPerWatt').value); var credit = parseFloat(document.getElementById('taxCredit').value); if (isNaN(bill) || isNaN(size) || isNaN(cpw) || isNaN(credit)) { alert('Please enter valid numbers in all fields.'); return; } var grossCost = size * cpw * 1000; var taxSavings = grossCost * (credit / 100); var netCost = grossCost – taxSavings; // Estimation: Solar systems typically offset 90% of a bill if sized correctly // Assuming average 1350 kWh per kW per year production and $0.16/kWh utility rate var annualSavings = bill * 12; var paybackYears = netCost / annualSavings; // 25 Year calculation including 3% utility inflation var totalSavings25 = 0; var currentAnnualSavings = annualSavings; for (var i = 1; i <= 25; i++) { totalSavings25 += currentAnnualSavings; currentAnnualSavings *= 1.03; // Utility rates increase ~3% annually } var netProfit25 = totalSavings25 – netCost; document.getElementById('grossCostDisplay').innerText = '$' + grossCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('netCostDisplay').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('paybackDisplay').innerText = paybackYears.toFixed(1) + ' Years'; document.getElementById('savingsDisplay').innerText = '$' + netProfit25.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('solarResult').style.display = 'block'; }

Understanding Your Solar Return on Investment (ROI)

Investing in solar panels is one of the most effective ways to reduce long-term household expenses while contributing to environmental sustainability. However, determining the financial viability requires more than just looking at the sticker price. This calculator helps you determine the break-even point and the total wealth generated by your system over its 25-year warranted lifespan.

Key Factors in Solar Math

• Gross Cost vs. Net Cost: The gross cost is what you pay the installer. The net cost accounts for the Federal Investment Tax Credit (ITC), which currently allows you to deduct 30% of the installation cost from your federal taxes.
• Payback Period: This is the number of years it takes for your cumulative electricity savings to equal the net cost of the system. In the US, the average solar payback period ranges between 6 to 10 years.
• Utility Inflation: Electricity rates typically rise by 2-4% annually. Solar "locks in" your rate, meaning the more utility prices go up, the more money your solar system saves you.

Example ROI Calculation

Let's look at a realistic scenario for a standard American home:

Metric	Value
System Size	7 kW
Gross Cost ($3.00/watt)	$21,000
30% Federal Tax Credit	-$6,300
Net Investment	$14,700
Annual Savings (at $150/mo)	$1,800
Payback Period	8.1 Years

How to Maximize Your Solar ROI

To ensure the shortest payback period and highest total savings, consider these three factors:

1. Energy Efficiency First: Reduce your baseline consumption by upgrading to LED lighting or improving insulation. A smaller energy need allows for a smaller, cheaper solar system.
2. Roof Orientation: South-facing roofs in the northern hemisphere produce the most energy. If your roof faces East or West, you may need a slightly larger system to achieve the same ROI.
3. SREC Markets: In certain states (like NJ, MA, or PA), you can earn Solar Renewable Energy Certificates for every megawatt-hour your system produces, which can be sold for additional cash flow.