Estimate your payback period and 25-year financial savings.
Net Installation Cost:$0.00
Estimated Monthly Savings:$0.00
Payback Period:0.0 Years
25-Year Net Profit:$0.00
Understanding Solar Panel ROI
Investing in solar panels is more than just an environmental choice; it is a long-term financial strategy. This Solar Panel ROI Calculator helps you determine how quickly your energy savings will cover the initial installation costs and how much profit you stand to make over the life of the system.
How the Calculation Works
To calculate your return on investment, we analyze several key metrics:
Net System Cost: This is your total out-of-pocket expense after applying the Federal Solar Tax Credit (currently 30% in the US) and any local utility rebates.
Solar Energy Production: We calculate this by multiplying your system size (kW) by your local peak sun hours. A typical 6kW system in a sunny area generates approximately 700-900 kWh per month.
Payback Period: This is the number of years it takes for your cumulative energy bill savings to equal the net cost of the solar system. Most residential systems see a payback period between 6 and 10 years.
Typical Solar ROI Scenario
Component
Example Value
Initial System Cost
$18,000
Federal Tax Credit (30%)
-$5,400
Annual Savings
$1,600
Estimated Payback
7.8 Years
Key Factors Influencing Your Savings
Your actual savings may vary based on your roof orientation (south-facing is best in the northern hemisphere), local electricity rates, and the degradation of panels over time. Most modern tier-1 solar panels come with a 25-year performance warranty, ensuring your investment remains productive for decades.
function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById("systemCost").value);
var taxCredit = parseFloat(document.getElementById("taxCredit").value);
var systemSize = parseFloat(document.getElementById("systemSize").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
var elecRate = parseFloat(document.getElementById("elecRate").value);
var monthlyBill = parseFloat(document.getElementById("monthlyBill").value);
if (isNaN(systemCost) || isNaN(taxCredit) || isNaN(systemSize) || isNaN(sunHours) || isNaN(elecRate)) {
alert("Please enter valid numbers in all fields.");
return;
}
// Logic 1: Net Cost
var netCost = systemCost – (systemCost * (taxCredit / 100));
// Logic 2: Production (systemSize * sunHours * 30 days * 0.77 efficiency derate)
var monthlyProductionKwh = systemSize * sunHours * 30 * 0.77;
// Logic 3: Savings
// We assume you use all power or net metering covers the cost
var monthlySavings = monthlyProductionKwh * elecRate;
// Cap savings at the actual bill amount to be realistic
if (monthlySavings > monthlyBill) {
monthlySavings = monthlyBill;
}
// Logic 4: Payback Period
var annualSavings = monthlySavings * 12;
var paybackYears = netCost / annualSavings;
// Logic 5: 25 Year Profit (Assuming 0.5% degradation per year, ignored for simplicity in standard calc)
var total25YearSavings = annualSavings * 25;
var netProfit = total25YearSavings – netCost;
// Display Results
document.getElementById("resNetCost").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resMonthlySavings").innerText = "$" + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resPayback").innerText = paybackYears.toFixed(1) + " Years";
document.getElementById("resTotalProfit").innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("solarResult").style.display = "block";
}