function calculateSolarROI() {
var cost = parseFloat(document.getElementById('systemCost').value);
var tax = parseFloat(document.getElementById('taxCredits').value);
var bill = parseFloat(document.getElementById('monthlyBill').value);
var offset = parseFloat(document.getElementById('billOffset').value) / 100;
var inflation = parseFloat(document.getElementById('energyInflation').value) / 100;
var years = parseInt(document.getElementById('lifespan').value);
if (isNaN(cost) || isNaN(tax) || isNaN(bill) || isNaN(offset)) {
alert("Please enter valid numerical values.");
return;
}
var netCost = cost – tax;
var monthlySavings = bill * offset;
var annualSavings = monthlySavings * 12;
var cumulativeSavings = 0;
var paybackYear = -1;
var currentYearlySavings = annualSavings;
var totalSavingsAtEnd = 0;
for (var i = 1; i = netCost) {
// Linear interpolation for more accurate payback year
var remainingBeforeYear = netCost – (cumulativeSavings – currentYearlySavings);
var fraction = remainingBeforeYear / currentYearlySavings;
paybackYear = (i – 1) + fraction;
}
if (i === years) {
totalSavingsAtEnd = cumulativeSavings;
}
currentYearlySavings *= (1 + inflation);
}
var roi = ((totalSavingsAtEnd – netCost) / netCost) * 100;
document.getElementById('netCostDisplay').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('paybackDisplay').innerText = (paybackYear === -1 ? "Over " + years : paybackYear.toFixed(1)) + " Years";
document.getElementById('savingsDisplay').innerText = "$" + totalSavingsAtEnd.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiDisplay').innerText = roi.toFixed(1) + "%";
document.getElementById('solarResult').style.display = 'block';
}
Understanding Your Solar Panel ROI
Switching to solar energy is not just an environmental decision; it is a significant financial investment. To determine if solar is right for your home, you must understand the Solar Payback Period. This is the amount of time it takes for the electricity bill savings to cover the initial out-of-pocket cost of the system.
Key Factors in the Calculation
Gross System Cost: The total price including hardware, labor, and permitting.
Incentives: In the United States, the Federal Investment Tax Credit (ITC) currently allows homeowners to deduct 30% of the system cost from their federal taxes.
Monthly Savings: Most homeowners don't eliminate their bill entirely due to "grid connection fees," but a well-sized system can offset 90-100% of the energy consumption.
Energy Inflation: Utility companies typically raise rates by 2-5% annually. Solar "locks in" your rate, making it more valuable as grid power becomes more expensive.
Example Calculation
If you purchase a solar array for $20,000 and receive a $6,000 tax credit, your net cost is $14,000. If that system saves you $150 per month ($1,800/year), your simple payback would be approximately 7.7 years. However, when you factor in a 3% annual increase in electricity prices, that payback period often drops to 6.5 to 7 years.
Is Solar a Good Investment?
Most solar systems are warrantied for 25 years. If your payback period is 8 years, you essentially receive 17 years of "free" electricity. In many regions, the Internal Rate of Return (IRR) for solar exceeds 10%, which often outperforms traditional stock market investments while increasing your property value.