Calculate your Return on Investment (ROI) and see how many years it takes for your solar panels to pay for themselves.
Estimated Financial Returns
Net System Cost:
Year 1 Electricity Savings:
Payback Period:
25-Year Total Savings:
25-Year Net Profit:
Understanding Your Solar Panel Payback Period
The solar payback period is the amount of time it takes for the energy savings generated by a solar power system to equal the initial cost of the installation. For most homeowners in the United States, this period typically ranges between 6 and 10 years.
How We Calculate Your ROI
Our calculator uses several key data points to determine your financial forecast:
Net Cost: This is your gross installation price minus the Federal Solar Tax Credit (ITC) and any local utility rebates.
Annual Generation: We estimate your production by multiplying system size by peak sun hours, adjusted for a standard 78% system efficiency factor (accounting for inverter loss and wiring).
Utility Inflation: Electricity prices historically rise. We factor in an annual increase to show how your savings grow over time as grid power becomes more expensive.
Key Factors Influencing Your Results
Realistic expectations are vital when investing in renewable energy. Consider these variables:
Location: A 6kW system in Arizona will produce significantly more energy than the same system in Washington state due to peak sun hour availability.
Incentives: The federal government currently offers a 30% tax credit. Combining this with state-specific SRECs (Solar Renewable Energy Certificates) can slash your payback period by years.
Roof Orientation: South-facing roofs at an optimal tilt yield the highest production. North-facing roofs may extend the payback period by 20-30%.
Example Scenario
Imagine a homeowner installs a 7kW system for $21,000. After the 30% federal tax credit ($6,300), the net cost is $14,700. If that system saves the homeowner $1,800 a year in electricity, the simple payback is 8.1 years. However, when factoring in a 3% annual increase in electricity rates, the actual payback happens even faster—closer to 7.4 years.
function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById("systemCost").value);
var incentives = parseFloat(document.getElementById("incentives").value);
var systemSize = parseFloat(document.getElementById("systemSize").value);
var electricityRate = parseFloat(document.getElementById("electricityRate").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
var annualIncrease = parseFloat(document.getElementById("annualIncrease").value) / 100;
if (isNaN(systemCost) || isNaN(systemSize) || isNaN(electricityRate) || isNaN(sunHours)) {
alert("Please fill in all required fields with valid numbers.");
return;
}
var netCost = systemCost – incentives;
if (netCost < 0) netCost = 0;
// Annual production in kWh: Size * sun hours * days * efficiency (0.78)
var annualKWh = systemSize * sunHours * 365 * 0.78;
var year1Savings = annualKWh * electricityRate;
var totalSavings = 0;
var currentYearSavings = year1Savings;
var paybackYear = 0;
var cumulativeSavings = 0;
var foundPayback = false;
for (var i = 1; i = netCost) {
paybackYear = i – 1 + ((netCost – (cumulativeSavings – currentYearSavings)) / currentYearSavings);
foundPayback = true;
}
// Increase utility rate for next year
currentYearSavings = currentYearSavings * (1 + annualIncrease);
}
var netProfit = totalSavings – netCost;
// Display Results
document.getElementById("resNetCost").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resYear1").innerText = "$" + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (foundPayback) {
document.getElementById("resPayback").innerText = paybackYear.toFixed(1) + " Years";
} else {
document.getElementById("resPayback").innerText = "Over 25 Years";
}
document.getElementById("resTotalSavings").innerText = "$" + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resProfit").innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("solarResult").style.display = "block";
}