Estimate how many years it will take for your solar energy system to pay for itself through energy savings.
Your Estimated Solar ROI
Net System Cost:
Annual Electricity Savings:
Estimated Payback Period:
Years
*Calculation assumes a 3% annual increase in utility electricity rates.
Understanding Your Solar Payback Period
The solar payback period is the time it takes for the savings on your electricity bills to equal the total cost of installing your solar power system. In the United States, the average payback period ranges from 6 to 10 years, though this varies significantly based on your location and local utility rates.
Key Factors Influencing Your ROI
Federal Solar Tax Credit (ITC): Currently, homeowners can deduct 30% of the cost of installing a solar energy system from their federal taxes. This is the single biggest factor in reducing your net cost.
Electricity Rates: The more you pay for power from the grid, the more you save by generating your own. In states like California or Massachusetts with high rates, the payback period is much shorter.
Solar Incentives: Some states offer SRECs (Solar Renewable Energy Certificates) or local rebates that further lower the upfront investment.
System Performance: The amount of direct sunlight your roof receives and the efficiency of your panels dictate your annual generation.
Typical Payback Examples
Scenario
Net Cost
Monthly Savings
Payback Period
Small System (Florida)
$10,500
$110
~7.9 Years
Average System (Texas)
$14,000
$145
~8.1 Years
Large System (NY)
$21,000
$280
~6.3 Years
How to Calculate Manually
To find your basic payback period, use this formula:
However, a professional calculation (like the one above) also accounts for utility rate inflation. Because electricity prices typically rise by 2-4% every year, your solar savings actually increase over time, making your payback happen faster than a simple static calculation would suggest.
function calculateSolarROI() {
var grossCost = parseFloat(document.getElementById('systemCost').value);
var credits = parseFloat(document.getElementById('taxCredit').value);
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var offsetPerc = parseFloat(document.getElementById('billOffset').value);
// Validation
if (isNaN(grossCost) || isNaN(credits) || isNaN(monthlyBill) || isNaN(offsetPerc)) {
alert("Please enter valid numeric values in all fields.");
return;
}
var netCost = grossCost – credits;
if (netCost <= 0) {
alert("Credits cannot exceed the system cost for this calculation.");
return;
}
var monthlySavings = monthlyBill * (offsetPerc / 100);
var annualSavingsBase = monthlySavings * 12;
if (annualSavingsBase <= 0) {
alert("Savings must be greater than 0.");
return;
}
// Iterative calculation to account for 3% electricity price inflation
var accumulatedSavings = 0;
var year = 0;
var currentAnnualSavings = annualSavingsBase;
var inflationRate = 0.03;
while (accumulatedSavings < netCost && year 0 && year < 50) {
var overage = accumulatedSavings – netCost;
var lastYearContribution = currentAnnualSavings / (1 + inflationRate);
var fraction = 1 – (overage / lastYearContribution);
var finalPayback = (year – 1) + fraction;
} else {
var finalPayback = year;
}
// Display Results
document.getElementById('netCostDisplay').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('annualSavingsDisplay').innerText = "$" + annualSavingsBase.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('yearsResult').innerText = finalPayback.toFixed(1);
document.getElementById('solarResult').style.display = 'block';
// Smooth scroll to result
document.getElementById('solarResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}