Dti Ratio Mortgage Calculator

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Solar Panel Payback Period Calculator

Gross price before incentives.
Current US ITC is 30%.
Total kWh consumed per year.
Avg. cost from utility provider.
% of energy covered by solar.
Expected annual rate hike.

Estimated Results

Net System Cost

Payback Period

25-Year Savings

function calculateSolarPayback() { var cost = parseFloat(document.getElementById('systemCost').value); var credit = parseFloat(document.getElementById('taxCredit').value); var kwh = parseFloat(document.getElementById('annualKwh').value); var rate = parseFloat(document.getElementById('elecRate').value); var coverage = parseFloat(document.getElementById('coverage').value) / 100; var inflation = parseFloat(document.getElementById('inflation').value) / 100; if (isNaN(cost) || isNaN(credit) || isNaN(kwh) || isNaN(rate)) { alert("Please enter valid numbers in all fields."); return; } var netCost = cost * (1 – (credit / 100)); var yearOneSavings = (kwh * coverage) * rate; var cumulativeSavings = 0; var years = 0; var currentRate = rate; var total25YearSavings = 0; for (var i = 1; i = netCost) { years = i; } if (i 100) break; } document.getElementById('netCostDisplay').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('paybackDisplay').innerText = years + " Years"; document.getElementById('savingsDisplay').innerText = "$" + (total25YearSavings – netCost).toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('solarResult').style.display = "block"; }

Understanding Your Solar Payback Period

The solar payback period is the amount of time it takes for the energy savings generated by a solar panel system to equal the initial cost of the installation. For most homeowners in the United States, this period typically ranges between 6 to 10 years.

Key Factors Influencing ROI

  • Initial System Cost: This includes hardware, labor, permitting, and taxes. While higher quality panels cost more, they often have better efficiency and longer lifespans.
  • Incentives and Rebates: The Federal Investment Tax Credit (ITC) currently allows you to deduct 30% of your installation cost from your federal taxes, significantly shortening the payback period.
  • Local Electricity Rates: The more your utility provider charges per kWh, the more money you save by producing your own power.
  • Sunlight Exposure: Geography matters. A system in Arizona will produce more energy and pay for itself faster than the same system in Washington state.

Example Calculation

Imagine a homeowner installs a 7kW system for $21,000. After applying the 30% Federal Tax Credit, the net cost drops to $14,700. If that system produces $2,100 worth of electricity in its first year, the simple payback (without accounting for utility inflation) would be:

$14,700 (Net Cost) / $2,100 (Annual Savings) = 7 Years

Is Solar a Good Investment?

Most solar panels are warrantied for 25 years. If your payback period is 8 years, you are essentially receiving 17 years of free electricity. Furthermore, solar installations often increase property value and provide a hedge against rising utility costs, which have historically increased by roughly 2-3% annually.

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