Residential Solar Panel Payback Calculator
Use this calculator to model how quickly a rooftop solar system pays for itself. It compares your installation cost, incentives, daily sun exposure, and current electricity rate to estimate the kWh production, annual savings, and final payback timeline for a single residential system.
How the calculator interprets your inputs
Solar payback is driven by how much energy your panels can harvest and how much you avoid paying for that electricity. The calculator multiplies the system size, average sun hours, and performance ratio to establish a realistic annual production. Multiplying that production by your current electricity cost returns the first-year savings.
The total installation cost is the system size in watts times the cost per watt. Subtracting incentives gives the net investment, and dividing that by the annual savings yields the payback period. A modest escalation rate shows how future savings grow as utility rates climb.
- System size directly scales production and installation cost.
- Performance ratio reflects losses from shading, temperature, and inverter inefficiencies.
- Incentives come from federal, state, or utility rebates that trim upfront expenses.
- Grid inflation lets you estimate long-term savings as electricity prices rise.
Example scenario
A 6.5 kW array in a sunny metro with 5.8 sun hours, a 75% performance ratio, $2.80 per watt cost, $0.23 per kWh retail rate, $2,500 incentive, and 3% annual grid inflation yields about 10,330 kWh in year one. That produces roughly $2,375 in annual bill savings, covering the $15,700 net investment in about 6.6 years. With 3% escalation, the same system delivers nearly $27,200 in savings over a decade while offsetting about 95,000 kg of CO₂ versus grid power.