Solar Panel ROI & Savings Calculator
Estimate your system size, annual savings, and payback period.
Recommended System Size:
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Estimated Annual Savings:
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Net System Cost:
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Payback Period (ROI):
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25-Year Lifetime Savings:
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Understanding Your Solar Return on Investment
Switching to solar power is one of the most significant financial and environmental decisions a homeowner can make. This calculator helps you determine if the investment makes sense for your specific location and energy consumption habits.
Key Factors in Solar Calculations
To get an accurate estimate, we look at several critical metrics:
- Sun Hours: This isn't just daylight hours, but "peak" sun hours where intensity is high enough to generate maximum power. Most US states average between 3.5 and 6 hours.
- System Size: Calculated based on your monthly kWh usage. We include a 25% buffer to account for inverter efficiency losses and seasonal variations.
- The 30% Tax Credit: Currently, the Federal Solar Tax Credit (ITC) allows you to deduct 30% of your installation costs from your federal taxes.
Example Calculation
If your monthly bill is $150 and your rate is $0.15/kWh, you consume 1,000 kWh per month. In an area with 5 sun hours, you would need roughly an 8.2 kW system. If that system costs $20,000 and you receive $6,000 in incentives, your net cost is $14,000. With annual savings of $1,800, your payback period would be approximately 7.7 years.
Is Solar Worth It?
Most solar panels are warrantied for 25 years. If your payback period is under 10 years, you are looking at 15+ years of virtually free electricity. Furthermore, solar installations typically increase home resale value by an average of 4%.