function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById('systemCost').value);
var taxCreditPct = parseFloat(document.getElementById('taxCredit').value) / 100;
var annualKwh = parseFloat(document.getElementById('annualKwh').value);
var elecRate = parseFloat(document.getElementById('elecRate').value);
var inflation = parseFloat(document.getElementById('inflation').value) / 100;
if (isNaN(systemCost) || isNaN(annualKwh) || isNaN(elecRate)) {
alert("Please enter valid numerical values.");
return;
}
var netCost = systemCost – (systemCost * taxCreditPct);
var year1Savings = annualKwh * elecRate;
var totalSavings = 0;
var currentRate = elecRate;
var currentInvestment = netCost;
var yearsToPayback = 0;
var cumulativeSavings = 0;
for (var i = 1; i <= 25; i++) {
var annualSavings = annualKwh * currentRate;
cumulativeSavings += annualSavings;
if (cumulativeSavings < netCost) {
yearsToPayback = i;
} else if (yearsToPayback === (i – 1)) {
// Approximate the fraction of the year for payback
var remainingCost = netCost – (cumulativeSavings – annualSavings);
var fraction = remainingCost / annualSavings;
yearsToPayback = (i – 1) + fraction;
}
currentRate *= (1 + inflation);
}
document.getElementById('netCostDisplay').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('paybackDisplay').innerText = yearsToPayback.toFixed(1) + " Years";
document.getElementById('year1Display').innerText = "$" + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('totalSavingsDisplay').innerText = "$" + (cumulativeSavings – netCost).toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('results-area').style.display = "block";
}
Understanding Your Solar Return on Investment
Switching to solar power is more than an environmental choice; it's a financial strategy. To accurately calculate your Solar ROI, you must consider the initial capital expenditure, government incentives, and the rising cost of traditional electricity.
Key Factors Influencing Your Savings
The Federal Investment Tax Credit (ITC): As of 2024, the federal government offers a 30% tax credit on the total cost of solar panel installation, significantly lowering the "break-even" point.
Annual Solar Yield: This is the amount of energy (measured in kWh) your system generates. It depends on your geographic location, roof orientation, and local weather patterns.
Utility Inflation: Traditionally, utility rates increase by 2-4% annually. Solar locks in your energy costs, making your savings grow every year as grid prices rise.
Example ROI Calculation
Imagine a homeowner in California installs a system for $20,000. After the 30% federal tax credit, the net cost drops to $14,000. If that system produces 10,000 kWh per year and the local electricity rate is $0.20/kWh, the first-year savings would be $2,000. Without factoring in inflation, the payback period would be roughly 7 years. Over 25 years, the total profit could exceed $50,000 as utility rates climb.
How to Use This Solar Calculator
Enter System Cost: This is the total quote from your installer before incentives.
Input Tax Credits: Default is 30% for the US Federal ITC, but add local state rebates if applicable.
Check Your Bill: Look at your last 12 months of utility statements to find your average kWh rate and total consumption.
Inflation Rate: Most experts recommend using 3% as a conservative estimate for utility price hikes.
Note: This calculator provides an estimate based on linear production. Factors like panel degradation (typically 0.5% per year) and maintenance costs are not included but are generally offset by the increasing value of energy.