Switching to solar energy is one of the most significant financial and environmental decisions a homeowner can make. This calculator helps you determine the "Break-Even Point" (Payback Period) and the long-term financial benefits based on your specific energy usage and local solar conditions.
Key Factors Influencing Solar ROI
Peak Sun Hours: This isn't just daylight hours, but the intensity of the sun. In the US, this ranges from 3.5 to 6.0 hours per day depending on geography.
System Size: Measured in kilowatts (kW), this determines how much electricity you can generate. A standard residential system is typically 5kW to 10kW.
Federal Solar Tax Credit (ITC): As of 2024, the Investment Tax Credit allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes.
Utility Rates: The more expensive your local grid power is, the faster your solar panels will pay for themselves.
How We Calculate the Math
Our calculator uses a multi-step logic to determine your savings:
Net Investment: We calculate the total installation cost (System Size × 1000 × Cost per Watt) and subtract the Federal Tax Credit.
Annual Generation: We multiply the System Size by Peak Sun Hours and 365 days, accounting for a 0.5% annual degradation of panel efficiency.
Financial Offset: We determine how many kWh you produce vs. what you would have paid the utility company.
Example: A Typical 6kW Installation
If you install a 6kW system at $3.00/watt, your gross cost is $18,000. After the 30% federal tax credit ($5,400), your net investment is $12,600. If you live in an area with 4.5 sun hours and pay $0.15/kWh, you could save roughly $1,478 in your first year. This results in a payback period of approximately 8.5 years, with pure profit for the remaining 15-20 years of the system's life.
function calculateSolarROI() {
var monthlyBill = parseFloat(document.getElementById("monthlyBill").value);
var utilityRate = parseFloat(document.getElementById("utilityRate").value);
var systemSize = parseFloat(document.getElementById("systemSize").value);
var costPerWatt = parseFloat(document.getElementById("costPerWatt").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
var taxCreditPercent = parseFloat(document.getElementById("taxCredit").value);
if (isNaN(monthlyBill) || isNaN(utilityRate) || isNaN(systemSize) || isNaN(costPerWatt) || isNaN(sunHours)) {
alert("Please enter valid numeric values for all fields.");
return;
}
// Calculations
var grossCost = systemSize * 1000 * costPerWatt;
var taxCreditAmount = grossCost * (taxCreditPercent / 100);
var netCost = grossCost – taxCreditAmount;
// Annual Energy Production (kWh) = Size * sunHours * 365
var annualProduction = systemSize * sunHours * 365;
// First Year Savings
var annualSavings = annualProduction * utilityRate;
// Payback Period
var paybackYears = netCost / annualSavings;
// Lifetime Savings (25 Years) – Simplified with 3% utility inflation and 0.5% panel degradation
var totalLifetimeSavings = 0;
var currentYearSavings = annualSavings;
for (var i = 0; i < 25; i++) {
totalLifetimeSavings += currentYearSavings;
currentYearSavings = currentYearSavings * 1.025; // 2.5% avg energy price increase – 0.5% degradation
}
// Update UI
document.getElementById("grossCost").innerText = "$" + grossCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("netCost").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("annualSavings").innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("lifetimeSavings").innerText = "$" + totalLifetimeSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById("paybackPeriod").innerText = paybackYears.toFixed(1) + " Years";
document.getElementById("solarResult").style.display = "block";
}