Calculate your potential savings and break-even point for home solar installation.
Net Installation Cost (after credits):$0.00
Estimated Payback Period:0 Years
First Year Savings:$0.00
Total 25-Year Savings:$0.00
Understanding Your Solar Return on Investment (ROI)
Investing in residential solar panels is more than just an environmental choice; it's a financial strategy to hedge against rising utility costs. To accurately determine your solar payback period, you must account for the gross system cost minus the federal Solar Investment Tax Credit (ITC) and any local rebates.
Key Factors in the Calculation
Gross System Cost: This includes equipment (panels, inverters, racking), labor, permitting, and grid connection fees.
Federal Tax Credit (ITC): As of current legislation, homeowners can deduct a significant percentage of their solar installation costs from their federal taxes.
Utility Inflation: Historically, utility companies increase rates by 3-5% annually. Solar locks in your energy rate, making your savings grow every year as grid power becomes more expensive.
Payback Period: This is the time it takes for your cumulative energy savings to equal the initial net cost of the system. Most US homeowners see a break-even point between 6 to 10 years.
Is Solar Worth It in 2024?
With the cost of photovoltaic (PV) hardware dropping and the efficiency of modern N-type cells increasing, the ROI for solar has never been stronger. Beyond the direct monthly savings, solar installations often increase property value. Studies by Zillow have shown that homes with solar panels sell for approximately 4.1% more than comparable homes without them.
Example Calculation
If you install a system for $20,000 and receive a 30% Federal Tax Credit, your net cost is $14,000. If your solar panels offset a $150/month electric bill, you save $1,800 in the first year. Even without accounting for rising electricity rates, your payback period would be roughly 7.7 years. When you factor in a 4% annual utility price hike, that payback period often drops by 12-18 months.
function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById('solar_systemCost').value);
var taxCredit = parseFloat(document.getElementById('solar_taxCredit').value);
var monthlyBill = parseFloat(document.getElementById('solar_monthlyBill').value);
var annualIncrease = parseFloat(document.getElementById('solar_energyIncrease').value) / 100;
if (isNaN(systemCost) || isNaN(taxCredit) || isNaN(monthlyBill) || isNaN(annualIncrease)) {
alert("Please enter valid numerical values.");
return;
}
// 1. Calculate Net Cost
var netCost = systemCost * (1 – (taxCredit / 100));
// 2. Calculate Annual Savings and Payback
var annualSavingsYear1 = monthlyBill * 12;
var cumulativeSavings = 0;
var years = 0;
var foundPayback = false;
var paybackPeriod = 0;
var totalSavings25 = 0;
var currentYearSavings = annualSavingsYear1;
for (var i = 1; i = netCost) {
// Linear interpolation for more accurate month/year payback
var extraNeeded = netCost – (cumulativeSavings – currentYearSavings);
paybackPeriod = (i – 1) + (extraNeeded / currentYearSavings);
foundPayback = true;
}
// Increase savings for next year based on utility inflation
currentYearSavings *= (1 + annualIncrease);
}
// 3. Display Results
document.getElementById('res_netCost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_yearOne').innerText = "$" + annualSavingsYear1.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (foundPayback) {
document.getElementById('res_payback').innerText = paybackPeriod.toFixed(1) + " Years";
} else {
document.getElementById('res_payback').innerText = "Over 25 Years";
}
document.getElementById('res_totalSavings').innerText = "$" + totalSavings25.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('solar_results').style.display = 'block';
}