function calculateSolarPayback() {
var systemCost = parseFloat(document.getElementById('systemCost').value) || 0;
var taxCreditPercent = parseFloat(document.getElementById('taxCreditPercent').value) || 0;
var otherRebates = parseFloat(document.getElementById('otherRebates').value) || 0;
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value) || 0;
var newBill = parseFloat(document.getElementById('newBill').value) || 0;
var rateIncrease = (parseFloat(document.getElementById('rateIncrease').value) || 0) / 100;
var federalCredit = systemCost * (taxCreditPercent / 100);
var netCost = systemCost – federalCredit – otherRebates;
var monthlySavings = monthlyBill – newBill;
var annualSavings = monthlySavings * 12;
if (netCost <= 0) {
alert("Please check your input values. Incentives cannot exceed system cost for this calculation.");
return;
}
if (annualSavings 0 && years < 50) {
remainingCost -= currentAnnualSavings;
currentAnnualSavings *= (1 + rateIncrease);
years++;
}
// Refine the decimal for the final year
if (remainingCost < 0) {
var overshot = Math.abs(remainingCost);
var lastYearSavings = currentAnnualSavings / (1 + rateIncrease);
years = (years – 1) + ((lastYearSavings – overshot) / lastYearSavings);
}
// Calculate 25-year Lifetime Savings
var tempSavings = annualSavings;
for (var i = 0; i < 25; i++) {
lifetimeSavings += tempSavings;
tempSavings *= (1 + rateIncrease);
}
var net25YearProfit = lifetimeSavings – netCost;
document.getElementById('netCostDisplay').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('yearOneSavings').innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('paybackYears').innerText = years.toFixed(1);
document.getElementById('totalLifetimeSavings').innerText = "$" + net25YearProfit.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('solarResult').style.display = 'block';
}
How to Use the Solar Payback Period Calculator
Investing in solar panels is a major financial decision. Understanding your solar ROI (Return on Investment) is crucial to determining if renewable energy makes sense for your home. Our calculator takes into account the gross system cost, federal tax incentives, and rising utility costs to give you an accurate estimate of when your system will pay for itself.
Key Variables in Solar ROI
Gross System Cost: The total price of equipment, labor, permitting, and installation before any credits are applied.
Federal Solar Tax Credit (ITC): As of 2024, the federal government offers a 30% tax credit on the total cost of solar installation. This is a dollar-for-dollar reduction in your federal income tax liability.
Monthly Savings: This is the difference between what you used to pay your utility company and your new, reduced bill (often just a small connection fee).
Utility Rate Inflation: Electricity prices typically rise by 2% to 4% annually. Our calculator accounts for this, as every year your solar panels save you more money as grid power becomes more expensive.
Example Calculation
If you purchase a solar system for $25,000:
Federal Tax Credit (30%): You receive a $7,500 credit, bringing the net cost to $17,500.
Monthly Savings: If your bill drops from $200 to $20, you save $180 per month ($2,160 per year).
Payback: Without considering rate increases, $17,500 / $2,160 = 8.1 years. When factoring in a 3% annual utility price hike, the payback period often drops to 7.2 years.
What is a Good Solar Payback Period?
Most residential solar installations in the United States see a payback period between 6 and 10 years. Since solar panels are typically warrantied for 25 years, a 7-year payback period results in 18 years of "free" electricity. Factors like high local electricity rates and state-specific SREC (Solar Renewable Energy Certificate) programs can accelerate this timeline significantly.