function calculateSolarROI() {
var systemSize = parseFloat(document.getElementById('systemSize').value);
var grossCost = parseFloat(document.getElementById('grossCost').value);
var elecRate = parseFloat(document.getElementById('elecRate').value);
var sunHours = parseFloat(document.getElementById('sunHours').value);
var taxCreditPct = parseFloat(document.getElementById('taxCredit').value) / 100;
var rebates = parseFloat(document.getElementById('rebates').value);
if (isNaN(systemSize) || isNaN(grossCost) || isNaN(elecRate) || isNaN(sunHours)) {
alert("Please enter valid numbers in all fields.");
return;
}
var federalCreditValue = grossCost * taxCreditPct;
var netCost = grossCost – federalCreditValue – rebates;
// annual production (kWh) = size * annual sun hours * efficiency factor (roughly 0.82 for real world losses)
var annualProduction = systemSize * sunHours * 0.82;
var annualSavings = annualProduction * elecRate;
var paybackYears = netCost / annualSavings;
// Lifetime savings (25 years) accounting for 2.5% annual utility rate increase and 0.5% annual panel degradation
var totalLifetimeSavings = 0;
var currentYearSavings = annualSavings;
for (var i = 1; i <= 25; i++) {
totalLifetimeSavings += currentYearSavings;
currentYearSavings = currentYearSavings * 1.025 * 0.995;
}
var netProfit = totalLifetimeSavings – netCost;
document.getElementById('resNetCost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resAnnualSavings').innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "/yr";
document.getElementById('resPayback').innerText = paybackYears.toFixed(1) + " Years";
document.getElementById('resLifetime').innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resultsArea').style.display = 'block';
}
Understanding Your Solar Payback Period
The solar payback period is the time it takes for the energy savings generated by a solar photovoltaic (PV) system to cover the initial out-of-pocket cost of the installation. For most American homeowners, this period typically ranges between 6 to 10 years, though regional incentives can significantly shorten this timeframe.
How the Calculation Works
To determine your Return on Investment (ROI), we use several critical variables:
Net Cost: This is the total installation price minus the Federal Investment Tax Credit (ITC)—currently 30%—and any state-specific rebates.
Energy Production: We calculate this by multiplying your system size (in kW) by your local annual peak sun hours. We apply a standard 0.82 derate factor to account for real-world variables like wiring loss and inverter efficiency.
Electricity Displacement: We multiply your annual kWh production by your current utility rate to see how much "avoided cost" the system generates.
Example: An 8kW System in a Sunny Climate
Imagine a homeowner in Arizona installing an 8kW system:
Gross Cost: $24,000
Federal Tax Credit (30%): -$7,200
Net Investment: $16,800
Annual Production: 11,600 kWh
Annual Savings (at $0.16/kWh): $1,856
Payback Period: 9.0 Years
Factors That Accelerate Your ROI
Your actual payback may be faster if utility rates continue to rise. Most utility companies increase rates by 2-4% annually. Our calculator factors in a 25-year lifetime projection, which accounts for both rising energy costs and the slight natural degradation (efficiency loss) of the solar panels over time. By year 25, most systems have paid for themselves three times over.