Solar Panel ROI Calculator
Calculate your estimated payback period and long-term savings.
Include the 30% Federal ITC and local rebates here.
Calculation Summary
Net Investment
$0.00
Annual Energy Savings
$0.00
Payback Period
0.0 Years
25-Year Total Return
$0.00
Understanding Your Solar ROI
Investing in solar panels is more than an environmental choice; it's a financial strategy. The Return on Investment (ROI) for solar power measures how much money you save on electricity bills relative to the cost of the system. This calculator helps you determine the "break-even" point and your long-term profit.
Key Factors in Solar Payback
- The Federal Investment Tax Credit (ITC): Currently, the US federal government allows you to deduct 30% of your system's cost from your federal taxes.
- Sunlight Exposure: Systems in sunny states like Arizona or California produce more energy per kilowatt than those in cloudy regions, leading to faster ROI.
- Electricity Rates: The higher your utility charges per kilowatt-hour (kWh), the more money you save by producing your own power.
- System Degradation: Most solar panels lose about 0.5% efficiency per year, which is accounted for in long-term estimates.
A Realistic Example
Imagine a homeowner in Florida installs a 7 kW system for $21,000. They qualify for the 30% tax credit ($6,300), making the net cost $14,700. If they pay $0.14 per kWh and get 5 hours of peak sun per day:
- Daily Production: 7kW * 5 hours = 35 kWh
- Annual Production: 35 * 365 = 12,775 kWh
- Annual Savings: 12,775 * $0.14 = $1,788.50
- Payback Period: $14,700 / $1,788.50 = 8.2 Years
Since solar panels typically last 25 to 30 years, the remaining 17+ years of energy production are essentially free profit.