Estimate your potential savings and break-even point for a residential solar system.
Net Installation Cost (After Credits):$0.00
Estimated Annual Production:0 kWh
Year 1 Savings:$0.00
Estimated Payback Period:0 Years
Total 25-Year Savings (ROI):$0.00
How to Calculate Your Solar Return on Investment (ROI)
Investing in solar panels is not just an environmental decision; it's a significant financial strategy. To understand the true value, you must look beyond the initial price tag and calculate the Solar Payback Period—the time it takes for the energy savings to cover the installation costs.
Key Factors in the Calculation
Gross System Cost: The total price before any rebates. Currently, the average residential system costs between $2.50 and $3.50 per watt.
Federal Tax Credit (ITC): In the United States, the Residential Clean Energy Credit allows you to deduct 30% of your solar installation costs from your federal taxes.
Peak Sun Hours: This isn't just daylight. It refers to the intensity of sunlight equivalent to 1,000 watts per square meter. Most US states average between 3.5 and 6 hours daily.
Utility Rate Inflation: Traditionally, electricity prices rise by 2-4% annually. This makes solar more valuable every year.
Example Scenario
If you install a 6kW system at $18,000:
Apply the 30% Tax Credit ($5,400 reduction), bringing the net cost to $12,600.
If you live in a region with 4.5 peak sun hours, your system will produce roughly 8,300 kWh per year (factoring in system efficiency losses).
At an electricity rate of $0.16/kWh, you save $1,328 in the first year.
Your payback period would be approximately 8.8 years, after which all electricity produced is essentially free profit for the remaining 15-20 years of the panel life.
Is Solar Worth It for Your Home?
Solar ROI is highest in areas with high electricity rates and strong state-level incentives. Even if your payback period is 10 years, a solar system typically adds 4% to your home's resale value, often covering the investment cost immediately in home equity.
function calculateSolarROI() {
// Get Inputs
var systemCost = parseFloat(document.getElementById("systemCost").value);
var systemSize = parseFloat(document.getElementById("systemSize").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
var elecRate = parseFloat(document.getElementById("elecRate").value);
var taxCredit = parseFloat(document.getElementById("taxCredit").value);
var annualIncrease = parseFloat(document.getElementById("annualIncrease").value) / 100;
// Validate
if (isNaN(systemCost) || isNaN(systemSize) || isNaN(sunHours) || isNaN(elecRate)) {
alert("Please enter valid numeric values for all fields.");
return;
}
// Calculations
var netCost = systemCost – (systemCost * (taxCredit / 100));
// Annual Production: Size * Sun Hours * 365 * 0.78 (Standard Efficiency/Derate Factor)
var annualProduction = systemSize * sunHours * 365 * 0.78;
var yearOneSavings = annualProduction * elecRate;
// Calculate Payback Period with utility inflation
var cumulativeSavings = 0;
var paybackYears = 0;
var currentYearSavings = yearOneSavings;
var total25YearSavings = 0;
for (var i = 1; i <= 25; i++) {
cumulativeSavings += currentYearSavings;
total25YearSavings += currentYearSavings;
if (cumulativeSavings = netCost) {
var prevYearSavings = 0;
var tempSavings = 0;
var yr = 0;
var currS = yearOneSavings;
while(tempSavings < netCost && yr < 25) {
prevYearSavings = tempSavings;
tempSavings += currS;
currS *= (1 + annualIncrease);
yr++;
}
var fraction = (netCost – prevYearSavings) / (tempSavings – prevYearSavings);
paybackYears = (yr – 1) + fraction;
} else {
paybackYears = "25+";
}
// Display Results
document.getElementById("solarResults").style.display = "block";
document.getElementById("netCostText").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("annualProdText").innerText = Math.round(annualProduction).toLocaleString() + " kWh";
document.getElementById("yearOneSavingsText").innerText = "$" + yearOneSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if(typeof paybackYears === 'number') {
document.getElementById("paybackPeriodText").innerText = paybackYears.toFixed(1) + " Years";
} else {
document.getElementById("paybackPeriodText").innerText = "25+ Years";
}
var netROI = total25YearSavings – netCost;
document.getElementById("totalSavingsText").innerText = "$" + netROI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}