Determine the financial viability of your solar investment in seconds.
Investment Summary
Net System Cost:$0.00
Estimated Payback Period:0 Years
25-Year Cumulative Savings:$0.00
25-Year Total ROI:0%
How to Understand Your Solar ROI
Investing in solar energy is one of the most effective ways to hedge against rising utility costs. To calculate the true Return on Investment (ROI), you must look beyond the initial price tag and consider the long-term cash flow generated by avoided electricity purchases.
Key Factors in the Calculation
Net System Cost: This is your "out-of-pocket" expense after applying the Federal Investment Tax Credit (ITC) and local utility rebates. In the US, the federal credit currently covers 30% of the installation cost.
Payback Period: The number of years it takes for your cumulative energy savings to equal your initial net investment. Most residential systems pay for themselves in 6 to 10 years.
Utility Price Inflation: Electricity rates historically rise by about 2-4% annually. As utility prices go up, your solar energy becomes more valuable.
System Degradation: Solar panels lose a small amount of efficiency each year (typically 0.5%). Our calculator accounts for this to ensure realistic long-term projections.
Example Scenario
If you install a system for $20,000 and receive a $6,000 tax credit, your net investment is $14,000. If that system produces 10,000 kWh per year and your utility charges $0.16/kWh, you save $1,600 in Year 1. With utility rates rising, those savings increase annually, leading to a payback period of roughly 7.5 years and a 25-year profit of over $40,000.
function calculateSolarROI() {
var totalCost = parseFloat(document.getElementById('solar_total_cost').value);
var incentives = parseFloat(document.getElementById('solar_incentives').value);
var annualProd = parseFloat(document.getElementById('solar_production').value);
var utilityRate = parseFloat(document.getElementById('solar_utility_rate').value);
var inflation = parseFloat(document.getElementById('solar_inflation').value) / 100;
var degradation = parseFloat(document.getElementById('solar_degradation').value) / 100;
if (isNaN(totalCost) || isNaN(incentives) || isNaN(annualProd) || isNaN(utilityRate)) {
alert("Please enter valid numerical values.");
return;
}
var netCost = totalCost – incentives;
var cumulativeSavings = 0;
var paybackPeriod = 0;
var foundPayback = false;
var total25YearSavings = 0;
for (var year = 1; year = netCost) {
// Simple linear interpolation for a more accurate payback year
var prevYearSavings = cumulativeSavings – yearSavings;
var remainingAtStartOfYear = netCost – prevYearSavings;
paybackPeriod = (year – 1) + (remainingAtStartOfYear / yearSavings);
foundPayback = true;
}
if (year === 25) {
total25YearSavings = cumulativeSavings;
}
}
var totalROI = ((total25YearSavings – netCost) / netCost) * 100;
// Display Results
document.getElementById('solar_results').style.display = 'block';
document.getElementById('res_net_cost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (foundPayback) {
document.getElementById('res_payback').innerText = paybackPeriod.toFixed(1) + ' Years';
} else {
document.getElementById('res_payback').innerText = '> 25 Years';
}
document.getElementById('res_total_savings').innerText = '$' + total25YearSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_roi').innerText = totalROI.toFixed(1) + '%';
// Smooth scroll to results on mobile
document.getElementById('solar_results').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}