Estimate your break-even point and long-term savings from solar energy.
Please enter valid positive numbers for all fields.
Net Investment Cost:$0
Monthly Savings:$0
Annual Savings:$0
Payback Period:0 Years
Estimated 25-Year Net Profit:$0
function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById('system_cost').value);
var incentives = parseFloat(document.getElementById('incentives').value);
var currentBill = parseFloat(document.getElementById('current_bill').value);
var newBill = parseFloat(document.getElementById('new_bill').value);
var errorDiv = document.getElementById('error_msg');
var resultsDiv = document.getElementById('results');
if (isNaN(systemCost) || isNaN(incentives) || isNaN(currentBill) || isNaN(newBill) || systemCost <= 0) {
errorDiv.style.display = 'block';
resultsDiv.style.display = 'none';
return;
}
errorDiv.style.display = 'none';
var netCost = systemCost – incentives;
var monthlySavings = currentBill – newBill;
var annualSavings = monthlySavings * 12;
if (annualSavings <= 0) {
alert("Your savings must be greater than zero to calculate a payback period.");
return;
}
var paybackPeriod = netCost / annualSavings;
var profit25 = (annualSavings * 25) – netCost;
document.getElementById('res_net_cost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_monthly_savings').innerText = '$' + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_annual_savings').innerText = '$' + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_payback').innerText = paybackPeriod.toFixed(1) + ' Years';
document.getElementById('res_profit').innerText = '$' + profit25.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsDiv.style.display = 'block';
}
Understanding the Solar Panel Payback Period
Switching to solar energy is a significant financial decision. The solar panel payback period is the amount of time it takes for the savings on your electricity bill to equal the initial cost of installing the solar power system. For most homeowners in the United States, this period typically ranges between 6 and 10 years.
How to Calculate Your Solar ROI
To determine when your solar panels will pay for themselves, follow these steps:
Determine Gross Cost: The total price of equipment, permits, and labor.
Subtract Incentives: Deduct the Federal Investment Tax Credit (ITC)—currently 30%—and any state-level rebates.
Calculate Annual Savings: Look at your historical electricity usage and subtract your projected new bill.
The Formula: Divide the Net Cost by the Annual Savings to find your payback years.
Example Calculation
Imagine a homeowner installs a system for $25,000. They receive a 30% federal tax credit ($7,500), bringing the net cost to $17,500. If the system eliminates a $150 monthly electric bill, the annual savings are $1,800.
$17,500 (Net Cost) / $1,800 (Annual Savings) = 9.7 Years
Factors That Influence the Payback Period
Several variables can speed up or slow down your return on investment:
Local Electricity Rates: The higher your utility rates, the more money you save with every kilowatt-hour your panels produce.
Sun Exposure: Homes in sun-drenched states like Arizona or California will generate more energy (and savings) than homes in overcast climates.
Incentives: States like Massachusetts or New York offer additional SRECs or rebates that can cut the payback period significantly.
Financing: Paying cash avoids interest, while solar loans include interest costs that extend the break-even point but allow for $0-down installation.
Is Solar Worth It?
Since most tier-one solar panels are warrantied for 25 years, a system with a 8-year payback period provides 17 years of essentially free electricity. This often results in a total net profit of $30,000 to $60,000 over the life of the system, not including the increased property value associated with solar-equipped homes.