Welcome to the best solar calculator. Use the inputs below to quickly determine the financial viability of a solar system installation, including your simple payback period and projected annual savings.
Best Solar Calculator
Best Solar Calculator Formula
$$ \text{Annual Savings (A)} = \text{Annual Production (E)} \times \text{Electricity Rate (R)} $$
$$ \text{Simple Payback (P)} = \frac{\text{System Cost (I)}}{\text{Annual Savings (A)}} $$
Formula Source: U.S. Energy Information Administration (EIA) | Energy Star Program
Variables
- Total System Cost (I): The net out-of-pocket cost after incentives and tax credits.
- Annual Energy Production (E): The estimated kilowatt-hours (kWh) the system will generate in a year, based on location, panel efficiency, and system size.
- Current Electricity Rate (R): The price you currently pay for one kilowatt-hour of electricity, including all fees.
- Annual Savings (A): The total monetary value of the energy generated per year, replacing your utility bill.
- Simple Payback Period (P): The number of years required for the cumulative Annual Savings (A) to equal the Initial System Cost (I).
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What is the Best Solar Calculator?
The “Best Solar Calculator” focuses on the single most critical metric for homeowners and investors: the simple payback period. This metric provides a clear, digestible measure of when your solar investment transitions from an expense to a revenue-generating asset. By inputting your system’s cost, its expected energy output, and your current utility rate, the calculator cuts through complex financial jargon to give you a reliable timeline.
Solar power is a long-term investment, but its profitability is often determined in the short-to-medium term by the payback period. A shorter payback period—typically under 10 years—indicates a highly efficient and financially advantageous installation. This calculator is essential for comparing quotes from different installers and making an informed decision about the financial performance of your solar array.
How to Calculate Payback Period (Example)
- Determine System Cost (I): A homeowner purchases a solar system for $20,000 (after rebates).
- Estimate Annual Production (E): The system is expected to generate 9,000 kWh per year.
- Find Electricity Rate (R): The homeowner pays $0.20/kWh.
- Calculate Annual Savings (A): $9,000 \text{ kWh} \times \$0.20/\text{kWh} = \$1,800 \text{ per year}$.
- Calculate Simple Payback (P): $\$20,000 / \$1,800 = 11.11 \text{ years}$.
Frequently Asked Questions (FAQ)
What is a good simple payback period for solar?
For residential solar installations, a payback period between 6 and 12 years is generally considered excellent, as most modern solar panels are warranted for 25 years.
Does this calculator include federal tax credits?
The “Total System Cost (I)” input should be the net cost *after* applying all eligible federal, state, and local incentives, including the federal investment tax credit (ITC).
What if my electricity rate changes?
This calculator uses the *Simple* Payback Period, which assumes a constant electricity rate. For an exact calculation, you would need to use a more complex ROI tool that factors in rate escalation (typically 2-4% per year).
How do I estimate Annual Energy Production (E)?
Your solar installer provides a detailed estimate based on your roof’s orientation, local weather data, and system size. This figure is critical for accurate financial planning.