Switching to solar power is one of the most significant financial decisions a homeowner can make. This calculator helps you determine the Payback Period—the time it takes for your energy savings to equal the cost of the system—and the long-term Return on Investment (ROI).
How the Solar Calculation Works
To provide an accurate estimate, the calculator uses several critical data points:
The Federal Solar Tax Credit (ITC): Currently at 30%, this reduces your net system cost significantly.
Solar Irradiance: This is the "Sunlight Hours per Day" input. It represents how much peak sun your panels receive to generate power.
Utility Inflation: Traditionally, electricity prices rise by about 2-4% annually. Factoring this in shows how solar protects you from future rate hikes.
System Efficiency: Our logic applies a standard 0.78 derate factor to account for inverter losses, wiring, and panel soiling.
Example Scenario
If you purchase a 6kW system for $18,000, the 30% Federal Tax Credit reduces your out-of-pocket cost to $12,600. If your local utility charges $0.16 per kWh and you receive 4.5 hours of peak sun daily, your system will produce approximately 7,700 kWh per year, saving you roughly $1,230 in year one. At this rate, your investment pays for itself in about 9-10 years, leaving 15+ years of virtually free electricity.
Key Factors Influencing Your Results
Your actual savings may vary based on your roof orientation (South-facing is optimal in the Northern Hemisphere), shading from trees, and your local utility's Net Metering policy. Net metering allows you to send excess energy back to the grid for credit, effectively using the grid as a battery.
function calculateSolarROI() {
var grossCost = parseFloat(document.getElementById('solarSystemCost').value);
var systemSize = parseFloat(document.getElementById('solarSystemSize').value);
var taxCreditPercent = parseFloat(document.getElementById('solarTaxCredit').value);
var utilityRate = parseFloat(document.getElementById('solarUtilityRate').value);
var sunHours = parseFloat(document.getElementById('solarSunHours').value);
var escalation = parseFloat(document.getElementById('solarRateEscalation').value) / 100;
if (isNaN(grossCost) || isNaN(systemSize) || isNaN(utilityRate)) {
alert("Please enter valid numeric values.");
return;
}
// 1. Calculate Net Cost
var taxCreditAmount = grossCost * (taxCreditPercent / 100);
var netCost = grossCost – taxCreditAmount;
// 2. Calculate Annual Production (kWh)
// Formula: Size (kW) * Sun Hours * 365 days * 0.78 (Efficiency Factor)
var annualProduction = systemSize * sunHours * 365 * 0.78;
// 3. Calculate Payback and Savings over 25 years (typical panel lifespan)
var totalSavings = 0;
var currentRate = utilityRate;
var paybackYear = 0;
var cumulativeSavings = 0;
var foundPayback = false;
for (var year = 1; year = netCost) {
paybackYear = year – 1 + ((netCost – (cumulativeSavings – yearlySavings)) / yearlySavings);
foundPayback = true;
}
// Apply utility rate escalation
currentRate = currentRate * (1 + escalation);
}
// 4. Calculate ROI
var netProfit = totalSavings – netCost;
var roi = (netProfit / netCost) * 100;
// Display Results
document.getElementById('solarResults').style.display = 'block';
document.getElementById('netCostDisplay').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
if (foundPayback) {
document.getElementById('paybackDisplay').innerText = paybackYear.toFixed(1) + ' Years';
} else {
document.getElementById('paybackDisplay').innerText = '> 25 Years';
}
document.getElementById('savingsDisplay').innerText = '$' + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('roiDisplay').innerText = roi.toFixed(1) + '%';
// Smooth scroll to results
document.getElementById('solarResults').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}