Please enter valid positive numbers for all fields.
Estimated Payback Period
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Net System Cost (After Incentives)
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20-Year Total Savings
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Return on Investment (ROI)
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function calculateSolarPayback() {
// Get Inputs
var systemCost = parseFloat(document.getElementById('systemCost').value);
var taxCredit = parseFloat(document.getElementById('taxCredit').value);
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var offset = parseFloat(document.getElementById('offset').value);
var inflation = parseFloat(document.getElementById('inflation').value);
// Validation
var errorDiv = document.getElementById('error-message');
var resultsDiv = document.getElementById('results');
if (isNaN(systemCost) || isNaN(taxCredit) || isNaN(monthlyBill) || isNaN(offset) || isNaN(inflation) || systemCost <= 0 || monthlyBill <= 0) {
errorDiv.style.display = 'block';
resultsDiv.style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// Calculations
var creditAmount = systemCost * (taxCredit / 100);
var netCost = systemCost – creditAmount;
var currentAnnualBill = monthlyBill * 12;
var firstYearSavings = currentAnnualBill * (offset / 100);
var cumulativeSavings = 0;
var paybackYears = 0;
var paidBack = false;
var totalSavings20Years = 0;
var yearSavings = firstYearSavings;
// Loop for 25 years (typical panel warranty)
for (var year = 1; year = netCost) {
// Calculate fractional year for precision
var previousBalance = netCost – (cumulativeSavings – yearSavings);
var fraction = previousBalance / yearSavings;
paybackYears = (year – 1) + fraction;
paidBack = true;
}
if (year 0) {
timeString += " " + months + " Months";
}
paybackDisplay.innerHTML = timeString;
} else {
paybackDisplay.innerHTML = "25+ Years";
}
resultsDiv.style.display = 'block';
}
Is Solar Worth It? Understanding Your Payback Period
Installing solar panels is a significant financial investment, much like buying a car or renovating a home. However, unlike most home improvements, solar panels generate direct financial returns by reducing or eliminating your electricity bill. The Solar Payback Period is the amount of time it takes for these savings to equal the initial cost of the system.
How to Use This Calculator
To get the most accurate estimate of your solar return on investment (ROI), you'll need a few key details:
Total System Cost: The gross price quoted by your installer before any rebates or incentives.
Federal Tax Credit: Currently, the US Federal Investment Tax Credit (ITC) allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes.
Monthly Electric Bill: Your average bill helps determine how much money you are currently spending on energy that could be replaced by solar.
Solar Offset: This represents how much of your energy usage the solar panels will cover. A 100% offset means the system produces enough power to cover your entire annual electricity usage.
What is a Good Solar Payback Period?
While this varies by location due to sunlight availability and local electricity rates, a "break-even" point between 6 to 10 years is generally considered excellent. Since most solar panels come with 25-year performance warranties, a payback period of 8 years means you will enjoy roughly 17 years of essentially free electricity.
Factors That Influence Your Savings
Several variables can speed up or slow down your ROI:
Electricity Rates: Higher local utility rates mean higher savings for every kWh you generate yourself.
Energy Inflation: Electricity prices historically rise by about 2-4% per year. As utility prices go up, the value of the energy your panels produce increases, shortening your payback period.
SREC Markets: Some states have Solar Renewable Energy Credit (SREC) markets where you can sell certificates for the energy you produce, providing an additional income stream not calculated here.
Net Cost vs. Gross Cost
It is crucial to differentiate between the sticker price (Gross Cost) and what you actually pay (Net Cost). The 30% Federal Tax Credit significantly lowers the barrier to entry. For example, a $20,000 system has a net cost of only $14,000 after the tax credit is applied, which is the figure used to calculate your break-even point.