Pool Loan Rate Calculator

Solar Panel Payback & Savings Calculator

Your Estimated Results

Net Investment

$0

Payback Period

0 Years

Annual Savings

$0

25-Year Net Profit

$0

function calculateSolarROI() { var cost = parseFloat(document.getElementById('systemCost').value); var credit = parseFloat(document.getElementById('taxCredit').value); var monthlyBill = parseFloat(document.getElementById('monthlyBill').value); var offset = parseFloat(document.getElementById('offset').value); if (isNaN(cost) || isNaN(credit) || isNaN(monthlyBill) || isNaN(offset)) { alert("Please enter valid numbers in all fields."); return; } // Calculation Logic var netInvestment = cost – (cost * (credit / 100)); var annualBillSavings = (monthlyBill * 12) * (offset / 100); var paybackYears = netInvestment / annualBillSavings; // 25 year lifetime assumption (standard for solar panels) // Including a conservative 2% annual increase in electricity costs var lifetimeSavings = 0; var currentYearSavings = annualBillSavings; for (var i = 0; i < 25; i++) { lifetimeSavings += currentYearSavings; currentYearSavings *= 1.02; // electricity inflation } var netProfit = lifetimeSavings – netInvestment; // Display Results document.getElementById('netCostDisplay').innerHTML = '$' + netInvestment.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('paybackDisplay').innerHTML = paybackYears.toFixed(1) + ' Years'; document.getElementById('annualSavingsDisplay').innerHTML = '$' + annualBillSavings.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('lifetimeDisplay').innerHTML = '$' + netProfit.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('solar-results').style.display = 'block'; }

---

How to Calculate Your Solar Panel Return on Investment (ROI)

Switching to solar energy is one of the most significant financial decisions a homeowner can make. Understanding the Solar Payback Period—the amount of time it takes for the savings on your energy bill to cover the initial cost of the system—is crucial for evaluating the investment.

Key Factors in the Calculation

• Gross System Cost: This is the total price paid to the installer before any incentives.
• Federal Solar Tax Credit (ITC): As of current laws, homeowners can deduct a significant percentage (typically 30%) of the installation cost from their federal taxes.
• Monthly Bill Offset: Most systems are designed to cover 70% to 100% of your energy usage. If your system covers 100%, your monthly utility bill essentially becomes $0 (excluding connection fees).
• Electricity Inflation: Utility rates typically rise by 2-3% annually. Solar "freezes" your rate, meaning your savings actually increase every year as utility power becomes more expensive.

Example Calculation

Imagine you install a system for $20,000. With a 30% Federal Tax Credit, your net cost drops to $14,000. If your current monthly bill is $150 and solar eliminates it, you save $1,800 per year.

$14,000 (Net Cost) / $1,800 (Annual Savings) = 7.7 Year Payback Period

After those 7.7 years, every dollar saved on your electric bill is pure profit. Since most modern solar panels are warrantied for 25 years, you could see over 17 years of free electricity.

Is Solar Worth It in 2024?

Beyond the direct financial savings, solar panels often increase property value. Studies by Zillow have shown that homes with solar panels sell for approximately 4.1% more than similar homes without them. When you combine the monthly savings, the tax incentives, and the equity boost, the Internal Rate of Return (IRR) for solar often outperforms the stock market over a 25-year horizon.