Estimate your potential savings and calculate how many years until your system pays for itself.
Estimated Projections
Recommended System Size—kW
Annual Savings—
25-Year Savings—
Payback Period—Years
How to Calculate Solar Panel Savings
Switching to solar energy is a significant financial decision. To accurately estimate your Return on Investment (ROI), you must look beyond the initial installation cost and consider your local climate, utility rates, and energy consumption patterns. This calculator helps you break down those numbers effectively.
Understanding the Core Metrics
System Size: Measured in kilowatts (kW), this is the peak power output of your panels. A typical home requires a 5kW to 10kW system.
Daily Sun Hours: This isn't just daylight; it's the number of hours where sunlight intensity is sufficient to produce maximum power (typically 4 to 6 hours in most of the US).
Payback Period: The time it takes for your cumulative energy savings to equal the net cost of the system.
Example Calculation
Imagine a homeowner in Arizona with a $200 monthly bill and an electricity rate of $0.14/kWh. They install a 7kW system for $18,000 (after tax credits). With an average of 6 sun hours per day, the system produces roughly 12,000 kWh annually. At $0.14/kWh, that is $1,680 in annual savings. The payback period would be approximately 10.7 years ($18,000 / $1,680).
Factors That Speed Up Your ROI
Federal Tax Credits (ITC): Currently, the US federal government offers a 30% tax credit on solar installations, which significantly reduces the "Total Installation Cost" input in our calculator.
Net Metering: If your utility company allows net metering, you can sell excess energy back to the grid, further offsetting your monthly bill.
Local SREC Programs: Some states provide Solar Renewable Energy Certificates which can be sold for additional cash flow.
function calculateSolarROI() {
var monthlyBill = parseFloat(document.getElementById("monthlyBill").value);
var elecRate = parseFloat(document.getElementById("elecRate").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
var systemCost = parseFloat(document.getElementById("systemCost").value);
if (isNaN(monthlyBill) || isNaN(elecRate) || isNaN(sunHours) || isNaN(systemCost) || elecRate <= 0) {
alert("Please enter valid positive numbers in all fields.");
return;
}
// 1. Calculate Monthly kWh usage
var monthlyKWh = monthlyBill / elecRate;
// 2. Calculate Daily kWh usage
var dailyKWh = monthlyKWh / 30.42;
// 3. Estimate Required System Size (kW)
// We factor in 80% system efficiency (standard derate factor)
var systemSizeReq = dailyKWh / (sunHours * 0.8);
// 4. Annual Generation (kWh) based on the calculated system size
var annualGen = systemSizeReq * sunHours * 365 * 0.8;
// 5. Annual Savings ($)
var annualSavings = annualGen * elecRate;
// 6. Payback Period (Years)
var paybackYears = systemCost / annualSavings;
// 7. Lifetime Savings (25 years)
var lifetimeSavings = (annualSavings * 25) – systemCost;
// Display Results
document.getElementById("resSystemSize").innerHTML = systemSizeReq.toFixed(2);
document.getElementById("resAnnualSavings").innerHTML = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resLifetimeSavings").innerHTML = "$" + lifetimeSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById("resPayback").innerHTML = paybackYears.toFixed(1);
document.getElementById("solar-results").style.display = "block";
}