Estimate your savings and payback period for a residential solar installation.
Net Installation Cost (After Credits)$0.00
Year 1 Energy Production (kWh)0 kWh
Year 1 Savings$0.00
Estimated Payback Period0 Years
Total 25-Year Savings$0.00
25-Year Net Profit (ROI)$0.00
How to Calculate Your Solar Return on Investment
Understanding the financial viability of solar panels requires looking beyond the initial sticker price. To accurately calculate your ROI, you must consider the "Net Cost," which is the gross cost minus the Federal Investment Tax Credit (ITC), currently set at 30% through 2032.
Key Factors Influencing Your Payback Period
Sunlight Exposure: Your geographic location determines "peak sun hours." A system in Arizona will produce more energy (and pay for itself faster) than the same system in Washington state.
Utility Rates: The more you pay your utility company per kWh, the more you save by generating your own power.
System Degradation: Solar panels typically lose about 0.5% efficiency per year. Our calculator factors this into the 25-year long-term savings.
Utility Inflation: Traditionally, electricity prices rise by 2-4% annually. This makes solar energy more valuable over time.
Example Scenario
If you install an 8kW system for $25,000, your 30% federal tax credit reduces the effective cost to $17,500. If that system produces 12,000 kWh annually and your rate is $0.16/kWh, you save $1,920 in the first year. Even without considering rising energy costs, your payback period would be approximately 9.1 years. However, with energy inflation, that period often drops to 7 or 8 years.
function calculateSolarROI() {
var grossCost = parseFloat(document.getElementById("systemCost").value);
var taxCreditPercent = parseFloat(document.getElementById("taxCredit").value);
var kwSize = parseFloat(document.getElementById("systemSize").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
var currentRate = parseFloat(document.getElementById("elecRate").value);
var utilityInflation = parseFloat(document.getElementById("priceIncrease").value) / 100;
if (isNaN(grossCost) || isNaN(kwSize) || isNaN(sunHours) || isNaN(currentRate)) {
alert("Please enter valid numeric values in all fields.");
return;
}
// Logic 1: Net Cost
var netCost = grossCost – (grossCost * (taxCreditPercent / 100));
// Logic 2: Annual Production (Accounting for 15% system loss/efficiency factor)
var annualKwh = kwSize * sunHours * 365 * 0.85;
// Logic 3: Year 1 Savings
var yearOneSavings = annualKwh * currentRate;
// Logic 4: Payback and 25-Year Projection
var cumulativeSavings = 0;
var paybackYear = 0;
var foundPayback = false;
var degradation = 0.005; // 0.5% per year
for (var year = 1; year = netCost) {
paybackYear = year – 1 + ((netCost – (cumulativeSavings – yearlySavings)) / yearlySavings);
foundPayback = true;
}
}
var totalNetProfit = cumulativeSavings – netCost;
// Update UI
document.getElementById("netCostDisplay").innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("yearOneKwh").innerText = Math.round(annualKwh).toLocaleString() + " kWh";
document.getElementById("yearOneSavings").innerText = "$" + yearOneSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("paybackPeriod").innerText = foundPayback ? paybackYear.toFixed(1) + " Years" : "Over 25 Years";
document.getElementById("totalSavings").innerText = "$" + cumulativeSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("netProfit").innerText = "$" + totalNetProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("solarResults").style.display = "block";
}