Estimate your savings and find out when your solar investment pays for itself.
Your Solar Investment Summary
Net System Cost:$0.00
Estimated Annual Savings:$0.00
Payback Period:0.0 Years
25-Year Total Savings:$0.00
25-Year ROI:0%
How to Calculate Your Solar Panel Return on Investment
Deciding to switch to solar is a significant financial decision. Understanding the Solar Panel ROI (Return on Investment) involves looking beyond the initial sticker price and analyzing long-term energy savings against the upfront net cost.
Key Factors in the Calculation
Net Cost: This is the gross price of the installation minus the 30% Federal Investment Tax Credit (ITC) and any local utility rebates. For example, a $20,000 system with the 30% credit actually costs $14,000.
Solar Yield: Not all locations get the same amount of sun. A 6kW system in Arizona will produce significantly more electricity (kWh) than the same system in Washington state.
Electricity Rates: The more you pay your utility company per kWh, the more money you save by producing your own power. High-rate states often see the fastest payback periods.
What is a Good Payback Period?
In the United States, the average solar payback period is typically between 6 to 10 years. Since most solar panels are warrantied for 25 years, you can expect 15 to 19 years of essentially "free" electricity after the system has paid for itself.
Example ROI Scenario
Imagine a homeowner installs an 8kW system for $24,000. After the 30% federal tax credit ($7,200), the net cost is $16,800. If the system produces 11,000 kWh per year and the local electricity rate is $0.16/kWh, the annual savings is $1,760. The payback period would be roughly 9.5 years ($16,800 / $1,760).
function calculateSolarROI() {
var size = parseFloat(document.getElementById("systemSize").value);
var cost = parseFloat(document.getElementById("totalCost").value);
var credit = parseFloat(document.getElementById("federalCredit").value);
var rebates = parseFloat(document.getElementById("rebates").value);
var rate = parseFloat(document.getElementById("elecRate").value);
var yieldPerKW = parseFloat(document.getElementById("annualProduction").value);
if (isNaN(size) || isNaN(cost) || isNaN(credit) || isNaN(rebates) || isNaN(rate) || isNaN(yieldPerKW)) {
alert("Please enter valid numeric values in all fields.");
return;
}
// Calculations
var taxCreditAmount = cost * (credit / 100);
var netCost = cost – taxCreditAmount – rebates;
if (netCost 0 ? (netCost / annualSavings) : 0;
// 25 Year Analysis (assuming 0.5% annual degradation but also 2% energy price inflation for simplicity balance)
var totalSavings25 = (annualSavings * 25) – netCost;
var roiPercentage = netCost > 0 ? (totalSavings25 / netCost) * 100 : 0;
// Display results
document.getElementById("resNetCost").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resAnnualSavings").innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resPayback").innerText = paybackPeriod.toFixed(1) + " Years";
document.getElementById("resTotalSavings").innerText = "$" + totalSavings25.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resROI").innerText = roiPercentage.toFixed(1) + "%";
document.getElementById("solarResults").style.display = "block";
}