function calculateSolarROI() {
var cost = parseFloat(document.getElementById('systemCost').value);
var credit = parseFloat(document.getElementById('taxCredit').value) / 100;
var size = parseFloat(document.getElementById('systemSize').value);
var rate = parseFloat(document.getElementById('elecRate').value);
var sun = parseFloat(document.getElementById('sunHours').value);
var inflation = parseFloat(document.getElementById('inflation').value) / 100;
if (isNaN(cost) || isNaN(size) || isNaN(rate) || isNaN(sun)) {
alert("Please enter valid numerical values.");
return;
}
var netCost = cost * (1 – credit);
var annualGeneration = size * sun * 365 * 0.85; // 0.85 assumes 15% system inefficiency
var yearOneSavings = annualGeneration * rate;
var totalSavings = 0;
var currentYearSavings = yearOneSavings;
var paybackYear = 0;
var runningCost = netCost;
for (var i = 1; i = netCost && paybackYear === 0) {
paybackYear = i – 1 + ((netCost – (totalSavings – currentYearSavings)) / currentYearSavings);
}
currentYearSavings *= (1 + inflation);
}
var netProfit = totalSavings – netCost;
var roi = (netProfit / netCost) * 100;
document.getElementById('netCostDisplay').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('yearOneSavings').innerText = "$" + yearOneSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('paybackPeriod').innerText = paybackYear.toFixed(1) + " Years";
document.getElementById('totalSavingsDisplay').innerText = "$" + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('netProfitDisplay').innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiPercentage').innerText = roi.toFixed(2) + "%";
document.getElementById('solarResult').style.display = "block";
}
How to Calculate Solar Panel ROI
Investing in solar energy is one of the most effective ways for homeowners to reduce their carbon footprint while simultaneously securing long-term financial stability. Understanding the Return on Investment (ROI) and the Payback Period is essential before signing an installation contract.
Key Factors in Solar Math
Gross System Cost: The total price of panels, inverter, mounting hardware, and labor before any incentives.
The Investment Tax Credit (ITC): In the United States, the federal government offers a substantial tax credit (currently 30% through 2032) that directly reduces the net cost of your system.
Sunlight Hours: This refers to "peak sun hours," which is the intensity of sunlight that produces 1,000 watts of energy per square meter. This varies significantly by geography (e.g., Arizona vs. Washington state).
Electricity Rates: The more you pay your utility company per kilowatt-hour (kWh), the more money you save by generating your own power.
Example ROI Calculation
Imagine a typical residential scenario:
Example Parameters:
System Cost: $18,000
Tax Credit (30%): $5,400
Net Cost: $12,600
Annual Savings: $1,800 (assuming 10kW system and $0.15/kWh)
Payback Period: $12,600 / $1,800 = 7 Years
After the 7th year, every dollar saved on electricity is pure profit. Given that modern solar panels are warrantied for 25 years, you can expect nearly two decades of free energy after the system has paid for itself.
Optimizing Your Solar Performance
To maximize your ROI, consider the orientation of your roof (south-facing is usually best in the Northern Hemisphere) and ensure there is minimal shading from trees or nearby buildings. Additionally, keep an eye on your local utility's Net Metering policy, which determines how much credit you receive for sending excess power back to the grid.