Online Amortization Calculator Mortgage

Solar Panel ROI & Savings Calculator

Calculation Summary

Net System Cost:

$0

Payback Period:

0 Years

Year 1 Savings:

$0

25-Year Total Profit:

$0

function calculateSolarROI() { var cost = parseFloat(document.getElementById('systemCost').value) || 0; var taxCreditPerc = parseFloat(document.getElementById('taxCreditPerc').value) || 0; var monthlyBill = parseFloat(document.getElementById('monthlyBill').value) || 0; var coverage = (parseFloat(document.getElementById('solarCoverage').value) || 0) / 100; var annualIncrease = (parseFloat(document.getElementById('utilityIncrease').value) || 0) / 100; var localRebate = parseFloat(document.getElementById('localRebate').value) || 0; // Step 1: Net Cost Calculation var taxCreditValue = cost * (taxCreditPerc / 100); var netCost = cost – taxCreditValue – localRebate; // Step 2: Annual Savings and Payback var yearOneSavingsValue = monthlyBill * 12 * coverage; var currentYearSavings = yearOneSavingsValue; var cumulativeSavings = 0; var yearsToPayback = 0; var total25YearSavings = 0; for (var i = 1; i = netCost && yearsToPayback === 0) { yearsToPayback = i – 1 + ((netCost – (cumulativeSavings – currentYearSavings)) / currentYearSavings); } currentYearSavings *= (1 + annualIncrease); } var totalProfitValue = total25YearSavings – netCost; // Display Results document.getElementById('netCostDisplay').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('yearOneSavings').innerText = '$' + yearOneSavingsValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('paybackDisplay').innerText = (yearsToPayback > 0 ? yearsToPayback.toFixed(1) : '> 25') + ' Years'; document.getElementById('totalProfit').innerText = '$' + totalProfitValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('solar-results').style.display = 'block'; }

How to Calculate Your Solar Panel Return on Investment (ROI)

Investing in solar panels is not just an environmental decision; it is a significant financial strategy. To understand if solar is right for your home, you must calculate the Return on Investment (ROI) by comparing the upfront costs against long-term utility savings.

Key Components of Solar ROI

• Gross System Cost: This is the total price for equipment, labor, and permitting before any incentives.
• The Federal Solar Tax Credit (ITC): Currently, the Investment Tax Credit allows you to deduct 30% of your solar installation costs from your federal taxes.
• Annual Utility Inflation: Electricity rates typically rise by 2% to 5% annually. Solar locks in your energy costs, making it more valuable as grid prices rise.
• Solar Coverage: This is the percentage of your electricity bill that the solar system covers. A 100% coverage means you produce as much as you consume annually.

Example ROI Calculation

Suppose you purchase a solar system for $20,000. After applying the 30% Federal Tax Credit ($6,000), your net cost is $14,000. If your monthly electricity bill is $150 and your system covers 100% of your usage, you save $1,800 in the first year.

Without accounting for rising energy costs, your payback period would be roughly 7.7 years ($14,000 / $1,800). However, when you factor in a 4% annual increase in electricity rates, your payback period usually drops to 6–7 years, and your total savings over a 25-year panel lifespan can exceed $60,000.

Why the Payback Period Matters

The "Payback Period" is the point in time where your cumulative energy savings equal the net cost of the system. Once you hit this "break-even" point, every dollar saved on your utility bill is pure profit. Most modern Tier-1 solar panels are warrantied for 25 years, meaning you can enjoy 15 to 19 years of free electricity after the system has paid for itself.