Estimate your potential savings and break-even point for home solar installation.
Net Installation Cost (After Incentives)$0.00
Year 1 Energy Savings$0.00
Estimated Payback Period0 Years
25-Year Total Savings (Inflation Adjusted)$0.00
25-Year ROI (%)0%
How to Calculate Your Solar Return on Investment
Switching to solar energy is one of the few home improvements that actually pays for itself. To understand the financial viability of solar for your home, you must look beyond the initial sticker price and evaluate the long-term energy offset.
Understanding the Core Metrics
Net Installation Cost: This is your gross system cost minus the Federal Investment Tax Credit (ITC)—currently 30%—and any local state rebates. This represents your actual out-of-pocket investment.
Solar Payback Period: This is the time it takes for your cumulative energy savings to equal the net cost of the system. In the United States, most residential systems reach their break-even point between 6 to 10 years.
Key Factors Influencing Your Results
Sunlight Exposure: A 6kW system in Arizona will produce significantly more power than the same system in Washington state due to "peak sun hours."
Utility Rates: The more you currently pay per kilowatt-hour (kWh), the faster your system pays for itself. High-cost states like California or Massachusetts see the highest ROIs.
Net Metering: If your utility company offers 1:1 net metering, they credit you the full retail price for the excess energy your panels send back to the grid.
Degradation: Solar panels typically lose about 0.5% efficiency per year. Our calculator accounts for this slight decrease in production over a 25-year lifespan.
Is Solar a Good Investment?
Typically, if your payback period is under 12 years, solar is an excellent investment. Given that modern panels are warrantied for 25 years, you can enjoy over a decade of essentially "free" electricity after the system has paid for itself. Furthermore, solar installations often increase property value and provide a hedge against rising utility costs, which have historically increased by 2-4% annually.
function calculateSolarROI() {
var cost = parseFloat(document.getElementById('solarCost').value);
var size = parseFloat(document.getElementById('systemSize').value);
var rate = parseFloat(document.getElementById('elecRate').value);
var taxCreditPercent = parseFloat(document.getElementById('taxCredit').value);
var hours = parseFloat(document.getElementById('sunHours').value);
var inflation = parseFloat(document.getElementById('annualIncrease').value) / 100;
if (isNaN(cost) || isNaN(size) || isNaN(rate) || isNaN(taxCreditPercent) || isNaN(hours)) {
alert("Please enter valid numerical values.");
return;
}
// 1. Calculate Net Cost
var netCost = cost * (1 – (taxCreditPercent / 100));
// 2. Calculate Annual Production (kWh)
// Formula: Size (kW) * Daily Sun Hours * 365 days * 0.85 (system loss factor)
var annualKwh = size * hours * 365 * 0.85;
// 3. Year 1 Savings
var year1Savings = annualKwh * rate;
// 4. Calculate Payback and 25-Year Cumulative Savings
var totalSavings = 0;
var currentRate = rate;
var currentProduction = annualKwh;
var paybackYear = 0;
var cumulativeSavings = 0;
var foundPayback = false;
for (var year = 1; year = netCost) {
// Simple linear interpolation for more accuracy within the year
var short = netCost – (cumulativeSavings – savingsThisYear);
paybackYear = (year – 1) + (short / savingsThisYear);
foundPayback = true;
}
// Adjust for next year: Production drops 0.5%, Utility rate increases by inflation
currentProduction *= 0.995;
currentRate *= (1 + inflation);
}
// 5. Calculate ROI
var totalProfit = cumulativeSavings – netCost;
var roi = (totalProfit / netCost) * 100;
// Display Results
document.getElementById('netCostDisplay').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('year1SavingsDisplay').innerText = '$' + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('paybackDisplay').innerText = (foundPayback ? paybackYear.toFixed(1) : "> 25") + ' Years';
document.getElementById('totalSavingsDisplay').innerText = '$' + cumulativeSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiDisplay').innerText = roi.toFixed(1) + '%';
document.getElementById('solarResults').style.display = 'block';
}