Solar Panel Savings & ROI Calculator
Estimate your potential energy savings and system payback period.
Estimated Results
Net System Cost (After Incentives):
$0.00
Estimated Annual Generation:
0 kWh
Estimated Annual Savings:
$0.00
Payback Period:
0 Years
25-Year Total Savings:
$0.00
Understanding Your Solar ROI
Switching to solar energy is a significant investment that provides both environmental benefits and long-term financial returns. To accurately estimate your savings, you must look at several key metrics including the system's generation capacity and the local cost of electricity.
How the Calculation Works
Our calculator uses the following logic to determine your potential ROI:
- Net System Cost: This is your gross installation cost minus federal tax credits (like the ITC) and local rebates.
- Annual Generation: We calculate this by multiplying your System Size (kW) by your Daily Sun Hours and an efficiency factor (typically 85% to account for inverter loss and wiring).
- Annual Savings: This is the amount of electricity your panels produce multiplied by your current utility rate per kWh. This assumes you have access to Net Metering.
- Payback Period: The amount of time it takes for your annual energy savings to equal the net cost of the system.
Example Scenario
Suppose you install a 6kW system at a cost of $15,000. With a 30% federal tax credit, your net cost is $10,500. If you live in an area with 5 sun hours per day, your system generates roughly 9,300 kWh per year. At an electricity rate of $0.15/kWh, you save $1,395 annually. In this case, your payback period would be approximately 7.5 years.
Maximizing Your Savings
To get the most out of your solar panels, ensure your roof is free of shade and panels are angled toward the south (in the northern hemisphere). Additionally, keep an eye on utility rate hikes; as electricity prices rise, your solar panels actually become more valuable, shortening your payback period and increasing your 25-year lifetime savings.