Estimate your potential savings and return on investment for a home solar energy system.
Net System Cost:$0.00
Year 1 Energy Savings:$0.00
Estimated Payback Period:0 Years
Total 25-Year Savings:$0.00
25-Year ROI:0%
Understanding Solar Return on Investment (ROI)
Switching to solar power is one of the most significant financial and environmental decisions a homeowner can make. Solar ROI measures how much money you will save or earn over the lifetime of your solar panel system compared to what you would have paid to your utility provider.
How the Calculation Works
The financial viability of a solar installation depends on several key metrics:
Net System Cost: This is the gross price of the installation minus the Federal Investment Tax Credit (ITC) and any local utility rebates.
Annual Production: Calculated by multiplying the system size (in kilowatts) by the average annual peak sun hours in your region.
Payback Period: The amount of time it takes for your cumulative energy savings to equal the net cost of the system. Most residential systems pay for themselves within 6 to 10 years.
Utility Inflation: Traditionally, electricity prices rise by about 2% to 4% annually. Factoring this in significantly increases your long-term ROI.
Real-World Example
Imagine a homeowner in a sunny region who installs a 7 kW system for $21,000. With the current 30% federal tax credit, the net cost drops to $14,700. If that system produces 10,000 kWh per year and the utility rate is $0.16/kWh, the first-year savings are $1,600. Without accounting for inflation, the payback period is roughly 9.2 years. Over 25 years, accounting for rising energy costs, that homeowner could save well over $50,000.
Factors That Influence Your ROI
While this calculator provides a robust estimate, your actual return may vary based on:
Roof Orientation: South-facing roofs (in the northern hemisphere) generate the most power.
Shading: Trees or nearby buildings can reduce production efficiency.
Net Metering Policies: How your utility credits you for the excess energy your panels send back to the grid.
Maintenance: Solar panels are low-maintenance, but occasionally cleaning or inverter replacement (usually after 12-15 years) should be considered.
function calculateSolarROI() {
var grossCost = parseFloat(document.getElementById('systemCost').value);
var taxCreditPercent = parseFloat(document.getElementById('taxCredit').value);
var systemSize = parseFloat(document.getElementById('systemSize').value);
var sunHours = parseFloat(document.getElementById('sunHours').value);
var elecRate = parseFloat(document.getElementById('elecRate').value);
var annualIncrease = parseFloat(document.getElementById('annualIncrease').value) / 100;
if (isNaN(grossCost) || isNaN(systemSize) || isNaN(elecRate)) {
alert("Please enter valid numbers for cost, size, and electricity rate.");
return;
}
// 1. Calculate Net Cost
var netCost = grossCost – (grossCost * (taxCreditPercent / 100));
// 2. Year 1 Savings
var annualProduction = systemSize * sunHours;
var year1SavingsVal = annualProduction * elecRate;
// 3. 25 Year Cumulative Savings and Payback Period
var cumulativeSavings = 0;
var currentYearSavings = year1SavingsVal;
var paybackYear = 0;
var foundPayback = false;
for (var year = 1; year = netCost) {
paybackYear = year – 1 + ((netCost – (cumulativeSavings – currentYearSavings)) / currentYearSavings);
foundPayback = true;
}
// Increase savings by inflation rate for next year
currentYearSavings *= (1 + annualIncrease);
}
// 4. ROI Calculation
var totalNetProfit = cumulativeSavings – netCost;
var roiTotal = (totalNetProfit / netCost) * 100;
// Display Results
document.getElementById('solarResults').style.display = 'block';
document.getElementById('netCostDisplay').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('year1Savings').innerText = '$' + year1SavingsVal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (foundPayback) {
document.getElementById('paybackPeriod').innerText = paybackYear.toFixed(1) + ' Years';
} else {
document.getElementById('paybackPeriod').innerText = '> 25 Years';
}
document.getElementById('totalSavings').innerText = '$' + cumulativeSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('roiValue').innerText = roiTotal.toFixed(1) + '%';
// Scroll to results
document.getElementById('solarResults').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}