Tax Calculator by State

Solar Panel ROI Calculator

Financial Breakdown

Net System Cost:

Annual Savings:

Payback Period:

25-Year Net Profit:

function calculateSolarROI() { var cost = parseFloat(document.getElementById('solar_total_cost').value); var credit = parseFloat(document.getElementById('solar_tax_credit').value); var size = parseFloat(document.getElementById('solar_system_size').value); var sunHours = parseFloat(document.getElementById('solar_sun_hours').value); var rate = parseFloat(document.getElementById('solar_elec_rate').value); if (isNaN(cost) || isNaN(credit) || isNaN(size) || isNaN(sunHours) || isNaN(rate)) { alert("Please enter valid numerical values."); return; } var netCost = cost – (cost * (credit / 100)); // Annual Production (kWh) = Size (kW) * Sun Hours * Days * Efficiency Factor (0.78 is standard loss factor) var annualProduction = size * sunHours * 365 * 0.78; var annualSavings = annualProduction * rate; var paybackPeriod = netCost / annualSavings; var lifetimeSavings = (annualSavings * 25) – netCost; document.getElementById('res_net_cost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('res_annual_savings').innerText = '$' + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('res_payback').innerText = paybackPeriod.toFixed(1) + ' Years'; document.getElementById('res_total_profit').innerText = '$' + lifetimeSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('solar_results').style.display = 'block'; }

Understanding Your Solar Return on Investment (ROI)

Investing in solar panels is more than just an environmental choice; it is a significant financial decision. To determine if solar is "worth it" for your specific home, you must calculate the Return on Investment (ROI) and the payback period.

Key Factors in the Calculation

• Gross System Cost: The total price before any incentives or rebates. This usually includes equipment (panels, inverters, racking) and labor.
• Federal Investment Tax Credit (ITC): As of current laws, the federal government offers a substantial tax credit (30% through 2032) for solar installations, drastically reducing the net cost.
• Solar Irradiance: Not all sunlight is equal. A home in Arizona will generate more energy per panel than a home in Washington due to higher peak sun hours.
• Utility Rates: The more you pay for electricity now, the faster your solar panels will pay for themselves. Solar effectively "locks in" your electricity rate for the next 25+ years.

Example Scenario

If you install a 10 kW system at a cost of $30,000:

1. The Tax Credit: You receive a 30% credit ($9,000), bringing your net cost to $21,000.
2. Production: In a sunny area (5 hours/day), your system might produce roughly 14,000 kWh per year.
3. Savings: At an electricity rate of $0.15/kWh, you save $2,100 annually.
4. Payback: Your system pays for itself in 10 years. Over 25 years, you would save over $30,000 in pure profit.

Maintenance and Longevity

Most modern solar panels are warrantied for 25 years. While the efficiency may degrade slightly over time (usually about 0.5% per year), the system requires very little maintenance other than occasional cleaning and potential inverter replacement after 12-15 years. This stability makes solar ROI one of the most predictable home improvement investments available.