Home Loan Interest Rate Calculation Formula

Calculate your solar investment payback period and long-term savings.

Understanding Solar Panel ROI

Investing in solar panels is more than just an environmental choice; it is a long-term financial strategy. To accurately determine your Solar Return on Investment (ROI), you must look beyond the initial sticker price and consider the offset of utility costs over several decades.

Key Factors in the Calculation

• The Solar Investment Tax Credit (ITC): Under current federal law, residential solar installations qualify for a 30% tax credit. This directly reduces the "Net Cost" of your system.
• System Efficiency: Solar panels typically operate at 75-80% efficiency due to inverter losses, wiring, and dust. Our calculator applies a standard 0.78 derate factor for realism.
• Sun Hours: This refers to "peak" sun hours. While a day has 12 hours of light, only a portion is strong enough for peak production.
• Utility Escalation: Electricity prices historically rise by 2.5% to 3.5% annually. Solar locks in your energy rate, making it a hedge against inflation.

Example ROI Analysis

Imagine a typical homeowner in a sunny region like Arizona:

Metric	Value
System Size	8 kW
Gross Cost	$24,000
Federal Credit (30%)	-$7,200
Net Cost	$16,800

In this scenario, if the annual electricity savings are $2,100, the payback period would be roughly 8 years. Over a 25-year lifespan, the homeowner would save over $50,000 after accounting for rising energy costs.

function calculateSolarROI() { // Get inputs var systemSize = parseFloat(document.getElementById('systemSize').value); var totalCost = parseFloat(document.getElementById('totalCost').value); var elecRate = parseFloat(document.getElementById('elecRate').value); var sunHours = parseFloat(document.getElementById('sunHours').value); var taxCredit = parseFloat(document.getElementById('taxCredit').value); var utilityIncrease = parseFloat(document.getElementById('utilityIncrease').value) / 100; // Validate inputs if (isNaN(systemSize) || isNaN(totalCost) || isNaN(elecRate) || isNaN(sunHours) || isNaN(taxCredit)) { alert("Please fill in all fields with valid numbers."); return; } // Calculation Logic // 1. Net Cost after incentives var netCost = totalCost – (totalCost * (taxCredit / 100)); // 2. Annual Energy Generation (kWh) // 0.78 is a standard derate factor (system efficiency losses) var annualGen = systemSize * sunHours * 365 * 0.78; // 3. First Year Savings var yearOneSavings = annualGen * elecRate; // 4. Payback Period calculation (accounting for electricity inflation) var cumulativeSavings = 0; var yearsToPayback = 0; var currentYearSavings = yearOneSavings; for (var i = 1; i = netCost) { yearsToPayback = i – 1 + (netCost – (cumulativeSavings – currentYearSavings)) / currentYearSavings; } currentYearSavings *= (1 + utilityIncrease); } // 5. 25-Year Net Profit var total25YearSavings = 0; var runningSavings = yearOneSavings; for (var j = 1; j 0 ? yearsToPayback.toFixed(1) + ' Years' : 'N/A'; document.getElementById('profitDisplay').innerText = '$' + Math.round(netProfit).toLocaleString(); // Smooth scroll to results document.getElementById('results').scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }