Car Refinance Calculator

Solar Panel ROI & Payback Calculator

Advanced Factors

Net Investment

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Payback Period

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Year 1 Savings

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25-Year Total Profit

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function calculateSolarROI() { var size = parseFloat(document.getElementById('sysSize').value); var cost = parseFloat(document.getElementById('totalCost').value); var credit = parseFloat(document.getElementById('taxCredit').value); var rate = parseFloat(document.getElementById('elecRate').value); var sun = parseFloat(document.getElementById('sunHours').value); var deg = parseFloat(document.getElementById('degradation').value) / 100; if (isNaN(size) || isNaN(cost) || isNaN(rate)) { alert("Please fill in all primary fields with valid numbers."); return; } // Calculation Logic var netInvestment = cost * (1 – (credit / 100)); // Annual production (Size * Sun Hours * 365 days * 0.8 efficiency factor) var annualProduction = size * sun * 365 * 0.8; var year1Savings = annualProduction * rate; var totalSavings25Years = 0; var currentProduction = annualProduction; for (var i = 0; i < 25; i++) { totalSavings25Years += currentProduction * rate; currentProduction = currentProduction * (1 – deg); } var paybackYears = netInvestment / year1Savings; var totalProfit = totalSavings25Years – netInvestment; // Update UI document.getElementById('roiResult').style.display = 'block'; document.getElementById('netCostDisplay').innerText = '$' + netInvestment.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('paybackDisplay').innerText = paybackYears.toFixed(1) + ' Years'; document.getElementById('year1Display').innerText = '$' + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('totalProfitDisplay').innerText = '$' + totalProfit.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); }

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Understanding Your Solar Investment Return (ROI)

Switching to solar power is one of the most significant financial decisions a homeowner can make. Beyond the environmental benefits, the financial "Return on Investment" (ROI) is the primary driver for residential solar adoption. To accurately calculate your ROI, you must look beyond the sticker price and consider the net cost, energy offsets, and long-term utility savings.

Key Components of the Calculation

• Net Investment: This is your total out-of-pocket expense after applying the Federal Investment Tax Credit (ITC). Currently set at 30%, this credit significantly reduces the "break-even" point for most homeowners.
• Solar Payback Period: This represents the number of years it takes for the cumulative electricity bill savings to equal the initial net cost of the system. In the US, the average payback period typically ranges between 6 and 10 years.
• Production vs. Degradation: Solar panels are usually warrantied for 25 years. However, they lose a tiny bit of efficiency each year (standardly 0.5%). Our calculator accounts for this degradation to give you a realistic 25-year profit forecast.

Real-World Example

Imagine a homeowner in a sunny state with a 7 kW system costing $21,000. After the 30% tax credit, the net cost drops to $14,700. If that system generates $1,800 worth of electricity in the first year, the payback period is roughly 8.1 years. Over 25 years, even accounting for degradation, that homeowner could see over $35,000 in pure profit—savings that would otherwise have gone to the utility company.

Factors That Influence Your ROI

Your local electricity rates are the biggest variable; the more expensive your utility power is, the faster your panels pay for themselves. Additionally, "Net Metering" policies in your state—which allow you to sell excess power back to the grid—can dramatically improve your financial outcome. Location also matters; a house in Arizona will naturally see a higher ROI than one in a lower-sunlight region like the Pacific Northwest, though solar remains viable in nearly all climates due to falling hardware costs.