Estimate how long it will take for your solar investment to pay for itself through energy savings.
Net System Cost:
Estimated Annual Production:
Estimated Annual Savings:
Payback Period:
Understanding Solar Payback Period
The solar payback period is the time it takes for the savings on your electricity bills to equal the initial cost of installing a solar power system. For most homeowners in the United States, the average payback period ranges between 6 to 10 years.
How to Calculate Solar Payback
To calculate the payback period manually, follow these steps:
Determine Combined System Cost: Subtract your federal tax credits and local rebates from the gross cost of the solar installation.
Calculate Annual Benefits: Multiply your annual solar energy production (in kWh) by your local electricity rate ($/kWh).
Divide Cost by Benefits: Divide the net cost by the annual savings to get the number of years.
Example Calculation
Imagine a 7kW system costing $20,000. With a 30% Federal Tax Credit ($6,000), the net cost is $14,000. If the system produces 10,000 kWh per year and your electricity rate is $0.16/kWh, you save $1,600 annually.
$14,000 / $1,600 = 8.75 years payback period.
Factors That Influence Your Results
Electricity Rates: Higher utility rates mean faster payback periods because every kWh you produce is worth more.
Incentives: The Federal Investment Tax Credit (ITC) currently allows you to deduct 30% of your installation costs from your federal taxes.
Sunlight Exposure: Houses in Arizona or California will generally see faster returns than those in cloudy regions like the Pacific Northwest.
Financing: Paying cash leads to the fastest payback. If you use a solar loan, the interest will extend the payback duration.
function calculateSolarPayback() {
var totalCost = parseFloat(document.getElementById("solar_totalCost").value);
var taxCreditPercent = parseFloat(document.getElementById("solar_taxCredit").value);
var otherIncentives = parseFloat(document.getElementById("solar_otherIncentives").value);
var systemSize = parseFloat(document.getElementById("solar_systemSize").value);
var elecRate = parseFloat(document.getElementById("solar_elecRate").value);
var annualSun = parseFloat(document.getElementById("solar_annualSun").value);
if (isNaN(totalCost) || isNaN(systemSize) || isNaN(elecRate)) {
alert("Please enter valid numbers for cost, size, and electricity rate.");
return;
}
// Logic for Net Cost
var taxCreditAmount = totalCost * (taxCreditPercent / 100);
var netCost = totalCost – taxCreditAmount – otherIncentives;
if (netCost 0) {
paybackPeriod = netCost / annualSavings;
}
// Display Results
document.getElementById("res_netCost").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("res_annualProd").innerText = annualProduction.toLocaleString() + " kWh";
document.getElementById("res_annualSavings").innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (annualSavings <= 0) {
document.getElementById("res_payback").innerText = "Never (No Savings)";
} else {
document.getElementById("res_payback").innerText = paybackPeriod.toFixed(1) + " Years";
}
document.getElementById("solar_results").style.display = "block";
}