Calculate your payback period and long-term savings from solar energy.
Results Summary
Net Cost (After Tax Credit):
Annual Solar Production:
Estimated Annual Savings:
Payback Period:
25-Year Net Profit:
ROI Percentage:
Understanding Your Solar Investment Return (ROI)
Deciding to switch to solar power is as much a financial decision as it is an environmental one. To determine if solar is "worth it," you must look at the Return on Investment (ROI) and the payback period—the amount of time it takes for your energy savings to cover the initial installation cost.
Key Factors in the Calculation
Gross System Cost: The total price of panels, inverters, labor, and permitting before any incentives.
Federal Investment Tax Credit (ITC): Currently, the U.S. federal government offers a 30% tax credit on residential solar installations, significantly reducing the "Net Cost."
Production Efficiency: Not all sun is equal. We use an efficiency derate factor of 0.78 to 0.82 to account for dust, wiring losses, and inverter conversion.
Electricity Rates: The more your utility provider charges per kWh, the faster your solar panels pay for themselves.
Example ROI Scenario
If you install a 6kW system at a gross cost of $18,000, your 30% tax credit reduces the cost by $5,400, leaving a net cost of $12,600. If that system produces 8,500 kWh per year and your local electricity rate is $0.18/kWh, you save $1,530 annually. Your payback period would be roughly 8.2 years ($12,600 / $1,530). Since modern panels are warrantied for 25 years, you would enjoy over 16 years of "free" electricity.
How to Increase Your Solar ROI
To maximize your returns, consider energy-efficient upgrades like LED lighting and smart thermostats alongside your solar installation. This reduces your overall load, potentially allowing for a smaller, more affordable solar array. Additionally, check for local state rebates or SREC (Solar Renewable Energy Certificate) programs that can add additional revenue streams to your investment.
function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById('solar_systemCost').value);
var taxCreditPct = parseFloat(document.getElementById('solar_taxCredit').value);
var systemSize = parseFloat(document.getElementById('solar_systemSize').value);
var sunHours = parseFloat(document.getElementById('solar_sunHours').value);
var kwhRate = parseFloat(document.getElementById('solar_kwhRate').value);
if (isNaN(systemCost) || isNaN(systemSize) || isNaN(sunHours) || isNaN(kwhRate)) {
alert("Please enter valid numerical values.");
return;
}
// 1. Calculate Net Cost
var netCost = systemCost – (systemCost * (taxCreditPct / 100));
// 2. Calculate Annual Production (kWh)
// Formula: Size (kW) * Daily Sun Hours * 365 days * efficiency (derate factor 0.8)
var annualProduction = systemSize * sunHours * 365 * 0.8;
// 3. Calculate Annual Savings ($)
var annualSavings = annualProduction * kwhRate;
// 4. Payback Period (Years)
var paybackYears = netCost / annualSavings;
// 5. 25-Year Lifetime Metrics
var lifetimeSavings = annualSavings * 25;
var totalProfit = lifetimeSavings – netCost;
var roiPercent = (totalProfit / netCost) * 100;
// Display results
document.getElementById('solar_results').style.display = 'block';
document.getElementById('res_netCost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_annualProduction').innerText = Math.round(annualProduction).toLocaleString() + ' kWh';
document.getElementById('res_annualSavings').innerText = '$' + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_payback').innerText = paybackYears.toFixed(1) + ' Years';
document.getElementById('res_profit').innerText = '$' + totalProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_roiPercent').innerText = roiPercent.toFixed(1) + '%';
// Smooth scroll to results
document.getElementById('solar_results').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}