Considering switching to solar power? Calculate your potential return on investment, net system cost, and the exact year your solar panels pay for themselves. This calculator accounts for the federal Investment Tax Credit (ITC), local rebates, and rising utility costs.
Your Solar Investment Analysis
Net System Cost:$0
Payback Period:0 Years
25-Year Net Savings:$0
Annual ROI:0%
How Solar ROI is Calculated
Determining the true return on investment for a solar panel system involves more than just subtracting your monthly bill. To get an accurate picture, we analyze four primary financial pillars:
1. Net Investment Cost
This is the "out-of-pocket" expense. We take the gross cost of the equipment and installation, then subtract the Federal Investment Tax Credit (ITC)—currently 30%—and any local utility rebates or state-level incentives.
2. Solar Offset & Avoided Costs
If your system is sized to cover 100% of your usage, you effectively eliminate your variable energy charge. We calculate your annual savings based on current rates, but also factor in utility inflation. On average, utility rates increase by 2% to 4% annually in the United States.
3. The Payback Period
The "break-even point" is the moment your cumulative electricity bill savings equal the net cost of the system. Most residential solar installations in the US reach this point between 6 and 10 years.
Example Scenario: Solar ROI in Action
System Cost: $20,000
Federal Tax Credit (30%): -$6,000
Net Cost: $14,000
Monthly Bill Savings: $150 ($1,800/year)
Estimated Payback: Approx. 7.2 years (accounting for 3% annual utility rate hikes).
Factors That Improve Your Solar ROI
Roof Orientation: South-facing roofs in the northern hemisphere generate the most power per square foot.
Local Electricity Rates: The more you pay per kilowatt-hour (kWh) to your utility, the faster your solar panels pay for themselves.
Net Metering Policies: If your state offers 1:1 net metering, you get full credit for the excess energy you send back to the grid during the day.
System Degradation: Quality solar panels only lose about 0.5% efficiency per year, meaning they will still produce roughly 85-90% of their original power after 25 years.
function calculateSolarROI() {
var cost = parseFloat(document.getElementById('sysCost').value);
var fedCreditPercent = parseFloat(document.getElementById('fedCredit').value) / 100;
var rebates = parseFloat(document.getElementById('rebates').value) || 0;
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var annualIncrease = parseFloat(document.getElementById('billIncrease').value) / 100;
var coverage = parseFloat(document.getElementById('coverage').value) / 100;
if (isNaN(cost) || isNaN(monthlyBill)) {
alert("Please enter valid numbers for System Cost and Monthly Bill.");
return;
}
// Calculate Net Cost
var fedCreditAmount = cost * fedCreditPercent;
var netCost = cost – fedCreditAmount – rebates;
// Calculation over 25 years (industry standard life of panels)
var totalSavings = 0;
var currentAnnualSavings = monthlyBill * 12 * coverage;
var paybackYear = 0;
var cumulativeSavings = 0;
var foundPayback = false;
for (var year = 1; year = netCost) {
// Linear interpolation for more accurate payback month within the year
var remainingAtStartOfYear = netCost – (cumulativeSavings – yearlySavings);
paybackYear = (year – 1) + (remainingAtStartOfYear / yearlySavings);
foundPayback = true;
}
totalSavings = cumulativeSavings;
}
// ROI calculation: (Total Profit / Cost) / Years
var netProfit = totalSavings – netCost;
var annualRoi = ((netProfit / netCost) / 25) * 100;
// Display Results
document.getElementById('results-box').style.display = 'block';
document.getElementById('netCostDisplay').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('paybackDisplay').innerText = (foundPayback ? paybackYear.toFixed(1) : "> 25") + ' Years';
document.getElementById('savingsDisplay').innerText = '$' + (totalSavings – netCost).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiDisplay').innerText = annualRoi.toFixed(2) + '%';
// Scroll to results
document.getElementById('results-box').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}