Judgment Interest Rate Calculator

Solar Panel Payback & ROI Calculator

Net System Cost

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Annual Savings

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Payback Period

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20-Year Net Profit

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function calculateSolarROI() { var cost = parseFloat(document.getElementById('solar_cost').value); var credit = parseFloat(document.getElementById('solar_tax_credit').value); var size = parseFloat(document.getElementById('solar_size').value); var rate = parseFloat(document.getElementById('solar_rate').value); var sunHours = parseFloat(document.getElementById('solar_sun_hours').value); var bill = parseFloat(document.getElementById('solar_bill').value); if (isNaN(cost) || isNaN(credit) || isNaN(size) || isNaN(rate) || isNaN(sunHours)) { alert('Please enter valid numeric values for all fields.'); return; } // Logic var netCost = cost * (1 – (credit / 100)); // Annual production in kWh (System Size * Daily Sun Hours * Days * Efficiency Factor 0.75) var annualProduction = size * sunHours * 365 * 0.78; var annualSavingsFromProduction = annualProduction * rate; // Cap savings at current bill amount (assuming no net metering surplus payout) var annualBill = bill * 12; var actualAnnualSavings = Math.min(annualSavingsFromProduction, annualBill); var paybackPeriod = netCost / actualAnnualSavings; var twentyYearProfit = (actualAnnualSavings * 20) – netCost; // Display document.getElementById('solar_results').style.display = 'block'; document.getElementById('res_net_cost').innerHTML = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('res_annual_savings').innerHTML = '$' + actualAnnualSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('res_payback').innerHTML = paybackPeriod.toFixed(1) + ' Years'; document.getElementById('res_20yr_profit').innerHTML = '$' + twentyYearProfit.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); }

How to Calculate Solar Panel Payback Period

Switching to solar energy is a significant investment. Understanding your solar payback period—the time it takes for your energy savings to cover the initial cost of the system—is crucial for determining if solar is right for your home.

The Formula for Solar ROI

To calculate your payback period, we use the following methodology:

• Gross Cost – Incentives = Net Cost: We take the total installation price and subtract the Federal Investment Tax Credit (ITC), which is currently 30% in many regions.
• Annual Energy Production: We estimate how many kilowatt-hours (kWh) your system produces based on its size and local peak sun hours.
• Annual Savings: This is the amount of electricity your system generates multiplied by your utility's current electricity rate.
• Payback Period: We divide the Net Cost by the Annual Savings to find the break-even year.

Key Factors Influencing Your Results

While this calculator provides a robust estimate, several factors can shift your actual return on investment:

1. Local Utility Rates: As electricity prices rise (historically 2-3% per year), your solar savings actually increase, shortening your payback period.
2. Net Metering Policies: Some states allow you to sell excess energy back to the grid at retail rates, while others offer lower wholesale rates.
3. Roof Orientation: South-facing roofs in the northern hemisphere typically see the fastest ROI due to maximum sun exposure.
4. Degradation: Solar panels slightly lose efficiency (about 0.5% per year), which we account for in long-term profit projections.

Example Calculation

Suppose you install a 7kW system costing $21,000. After the 30% federal tax credit, your net cost is $14,700. If your system saves you $1,800 per year on electricity, your payback period would be roughly 8.1 years. Over a 25-year panel lifespan, you would net over $30,000 in pure profit.