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Solar Panel Savings & ROI Calculator

Results Overview

Monthly Generation:

Monthly Savings:

Payback Period:

25-Year Total Savings:

function calculateSolarROI() { var bill = parseFloat(document.getElementById('monthlyBill').value); var rate = parseFloat(document.getElementById('elecRate').value); var size = parseFloat(document.getElementById('systemSize').value); var sun = parseFloat(document.getElementById('sunHours').value); var cost = parseFloat(document.getElementById('netCost').value); if (isNaN(bill) || isNaN(rate) || isNaN(size) || isNaN(sun) || isNaN(cost)) { alert("Please fill in all fields with valid numbers."); return; } // Monthly generation in kWh = Size(kW) * Daily Sun Hours * 30 days var monthlyKWh = size * sun * 30.42; // Current monthly consumption in kWh var currentKWh = bill / rate; // Monthly savings calculation (Assuming net metering or 100% self-consumption) var monthlySavings = monthlyKWh * rate; // Cap savings at current bill if system overproduces without export credits var actualMonthlySavings = monthlySavings > bill ? bill : monthlySavings; // Payback period in years var paybackYears = cost / (actualMonthlySavings * 12); // 25-year lifetime savings (taking 0.5% degradation into account) var totalSavings = 0; var currentYearSavings = actualMonthlySavings * 12; for (var i = 0; i < 25; i++) { totalSavings += currentYearSavings; currentYearSavings *= 0.995; // 0.5% annual degradation } var netProfit = totalSavings – cost; document.getElementById('resGen').innerText = monthlyKWh.toFixed(0) + " kWh"; document.getElementById('resSavings').innerText = "$" + actualMonthlySavings.toFixed(2); document.getElementById('resPayback').innerText = paybackYears.toFixed(1) + " Years"; document.getElementById('resTotal').innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); var offset = (monthlyKWh / currentKWh) * 100; document.getElementById('resOffset').innerText = "This system covers approximately " + offset.toFixed(0) + "% of your electricity needs."; document.getElementById('solar-results').style.display = 'block'; }

How to Calculate Solar Panel ROI

Deciding to switch to solar power is a significant financial decision. To accurately estimate your Return on Investment (ROI), you must look beyond the initial installation cost and consider the long-term energy generation potential of your specific location.

Key Variables Explained

  • System Size (kW): The DC power rating of your solar array. Most residential systems range between 5kW and 10kW.
  • Peak Sun Hours: This is not just daylight hours, but the intensity of sunlight. Areas like Arizona have high peak sun hours (approx. 6), while Seattle has lower (approx. 3.5).
  • Electricity Rate: Your utility cost per kWh determines how much each solar-generated unit is "worth" to you in savings.
  • Net Cost: The price of the system after subtracting the Federal Investment Tax Credit (ITC) and any local rebates.

The Financial Formula

The math behind solar savings follows this basic logic:

Yearly Production (kWh) = System Size * Daily Sun Hours * 365 Days
Yearly Savings = Yearly Production * Utility Rate
Payback Period = Net System Cost / Yearly Savings

Solar Savings Example

Imagine a homeowner in California with a 6kW system. They receive 5.5 peak sun hours per day. Their electricity rate is $0.22/kWh, and the net cost of the system after incentives is $13,000.

  1. Generation: 6kW * 5.5 hours * 365 = 12,045 kWh per year.
  2. Savings: 12,045 kWh * $0.22 = $2,649.90 saved annually.
  3. Payback: $13,000 / $2,649.90 = 4.9 Years.

After the 5th year, the electricity generated is essentially free for the remainder of the panels' 25 to 30-year lifespan.

Factors That Influence Your Results

While the calculator provides a strong estimate, real-world factors can shift the numbers:

  • Roof Orientation: South-facing roofs in the northern hemisphere produce the most energy. North-facing roofs may produce up to 30% less.
  • Panel Degradation: Solar panels lose about 0.5% efficiency every year. Our calculator accounts for this in the 25-year total.
  • Net Metering Policies: Some utility companies buy back excess energy at the full retail rate, while others pay a lower "wholesale" rate.
  • Maintenance: Solar is generally low maintenance, but you may need to replace the inverter once every 10-15 years.

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