Estimate your potential electricity savings and system payback period.
Estimated Monthly Production:0 kWh
Estimated Monthly Savings:$0.00
Annual Savings (Year 1):$0.00
Estimated Payback Period:0 Years
Total 25-Year Savings:$0.00
Understanding Solar Panel ROI
Investing in solar energy is not just an environmental decision; it's a significant financial strategy. The Solar Panel Savings Calculator helps homeowners determine how quickly their investment will pay for itself through reduced utility bills.
How the Calculation Works
To provide an accurate estimate, the calculator uses several key metrics:
Monthly Production: This is calculated by taking your system size (kW) multiplied by your daily peak sun hours, then multiplied by 30 days. We apply a standard 78% efficiency factor to account for energy loss in the inverter and wiring.
Payback Period: This is the time it takes for your cumulative electricity savings to equal the net cost of the system (after the federal solar tax credit and local rebates).
Long-term Savings: Solar panels typically have a 25-year warranty. We calculate the total savings over 25 years, accounting for the fact that utility companies often raise rates annually.
Example Scenario
Let's look at a typical installation:
System Size: 6 kW
Cost: $12,000 (after the 30% Federal Tax Credit)
Sunlight: 5 hours per day
Electricity Rate: $0.15 per kWh
In this case, the system produces roughly 700 kWh per month. If you pay $0.15/kWh, you save $105 per month. The annual savings would be $1,260. Dividing the $12,000 cost by $1,260 in annual savings gives a payback period of approximately 9.5 years. After that point, the electricity produced is essentially free.
Factors That Influence Your Savings
Your actual ROI may vary based on Net Metering policies in your state. Net metering allows you to "sell" excess energy back to the grid at the same rate you buy it. Furthermore, the orientation of your roof (South-facing is best in the Northern Hemisphere) and shading from trees can significantly impact efficiency.
function calculateSolarROI() {
var monthlyBill = parseFloat(document.getElementById("monthlyBill").value);
var electricityRate = parseFloat(document.getElementById("electricityRate").value);
var systemSize = parseFloat(document.getElementById("systemSize").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
var systemCost = parseFloat(document.getElementById("systemCost").value);
var annualIncrease = parseFloat(document.getElementById("annualIncrease").value) / 100;
if (isNaN(monthlyBill) || isNaN(electricityRate) || isNaN(systemSize) || isNaN(sunHours) || isNaN(systemCost)) {
alert("Please enter valid numerical values for all fields.");
return;
}
// Efficiency factor (derating) usually around 0.75 – 0.80
var derateFactor = 0.78;
// Monthly production in kWh
var monthlyProd = systemSize * sunHours * 30 * derateFactor;
// Monthly savings based on production
var monthlySavings = monthlyProd * electricityRate;
// Annual savings Year 1
var annualSavingsY1 = monthlySavings * 12;
// Calculate Payback Period and 25-Year Savings with utility inflation
var cumulativeSavings = 0;
var paybackYear = 0;
var currentYearSavings = annualSavingsY1;
var total25YearSavings = 0;
for (var i = 1; i = systemCost) {
paybackYear = i – 1 + ((systemCost – (cumulativeSavings – currentYearSavings)) / currentYearSavings);
}
// Increase utility rate for next year
currentYearSavings *= (1 + annualIncrease);
}
// Display Results
document.getElementById("res-monthly-prod").innerText = Math.round(monthlyProd) + " kWh";
document.getElementById("res-monthly-save").innerText = "$" + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("res-annual-save").innerText = "$" + annualSavingsY1.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (paybackYear > 0) {
document.getElementById("res-payback").innerText = paybackYear.toFixed(1) + " Years";
} else {
document.getElementById("res-payback").innerText = "> 25 Years";
}
var netProfit = total25YearSavings – systemCost;
document.getElementById("res-longterm").innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById("solar-result-area").style.display = "block";
document.getElementById("solar-result-area").scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}