Estimate your return on investment and see how many years it takes for your solar system to pay for itself.
Gross price before incentives.
Federal Tax Credit (ITC), state rebates, etc.
Typical residential systems are 5kW to 10kW.
Find this on your monthly electricity bill.
Daily peak sun hours (US avg is 4-5).
Historical average is roughly 2-4%.
Solar Investment Summary
Net System Cost:
Estimated Annual Production: kWh
First Year Savings:
Payback Period: Years
25-Year Total Savings:
25-Year Net Profit:
Understanding Your Solar Payback Period
The solar payback period is the time it takes for your solar energy system to generate enough electricity to pay for its initial net cost. For most homeowners in the United States, the average solar payback period ranges between 6 to 10 years.
Key Factors in the Calculation
Gross Cost vs. Net Cost: The gross cost is what you pay the installer. The net cost subtracts incentives like the federal Investment Tax Credit (ITC), which currently offers a 30% credit on residential solar installations.
Production Efficiency: We apply a 78% "derate factor" to our calculations. This accounts for real-world losses such as inverter efficiency, wiring resistance, and panel soiling.
Utility Rates: The more you pay for electricity now, the faster your solar panels will pay for themselves.
Price Escalation: Utility companies typically raise rates every year. Our calculator includes a customizable escalator to account for future inflation in energy costs.
Calculation Example
If you purchase a system for $20,000 and receive a $6,000 tax credit, your net cost is $14,000. If that system saves you $1,800 in electricity bills per year, your initial payback estimate would be roughly 7.7 years. However, as utility rates rise by 3% annually, that period actually shortens because your savings increase every year.
Is Solar a Good Investment?
Most solar panels are warrantied for 25 years. If your payback period is 8 years, you will enjoy 17 years of essentially free electricity. This makes solar one of the few home improvements that offers a guaranteed financial return while increasing property value.
function calculateSolarPayback() {
// Inputs
var grossCost = parseFloat(document.getElementById("systemCost").value);
var incentives = parseFloat(document.getElementById("incentives").value);
var sizeKw = parseFloat(document.getElementById("systemSize").value);
var rate = parseFloat(document.getElementById("utilityRate").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
var escalator = parseFloat(document.getElementById("priceEscalator").value) / 100;
// Validation
if (isNaN(grossCost) || isNaN(sizeKw) || isNaN(rate) || isNaN(sunHours)) {
alert("Please enter valid numerical values.");
return;
}
// Calculations
var netCost = grossCost – incentives;
// Annual Production: kW * hours/day * 365 * 0.78 (Efficiency factor)
var annualProduction = sizeKw * sunHours * 365 * 0.78;
var year1Savings = annualProduction * rate;
// Payback & 25-Year Projection Logic
var totalSavings = 0;
var currentYearSavings = year1Savings;
var paybackPeriod = 0;
var cumulativeSavings = 0;
var foundPayback = false;
for (var year = 1; year = netCost) {
// Linear interpolation for more accurate payback fraction
var previousYearSavings = cumulativeSavings – currentYearSavings;
var deficit = netCost – previousYearSavings;
paybackPeriod = (year – 1) + (deficit / currentYearSavings);
foundPayback = true;
}
// Increase savings for next year due to utility price escalator
currentYearSavings = currentYearSavings * (1 + escalator);
}
// Results Display
document.getElementById("solar-results").style.display = "block";
document.getElementById("resNetCost").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resProduction").innerText = Math.round(annualProduction).toLocaleString();
document.getElementById("resYear1Savings").innerText = "$" + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (foundPayback) {
document.getElementById("resPayback").innerText = paybackPeriod.toFixed(1);
} else {
document.getElementById("resPayback").innerText = "25+";
}
document.getElementById("resTotalSavings").innerText = "$" + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resProfit").innerText = "$" + (totalSavings – netCost).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Smooth scroll to results
document.getElementById("solar-results").scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}
#solar-payback-calculator-container input:focus {
outline: none;
border-color: #27ae60;
box-shadow: 0 0 5px rgba(39, 174, 96, 0.2);
}
@media (max-width: 600px) {
#solar-payback-calculator-container div[style*="grid-template-columns"] {
grid-template-columns: 1fr !important;
}
}