Switching to solar power is one of the few home improvements that actually pays for itself. However, calculating the true return on investment (ROI) requires looking at several variables, including your local energy rates, the physical capacity of your roof, and regional sun exposure.
How to Use the Solar Savings Calculator
To get an accurate estimate, you'll need a few pieces of data:
Average Monthly Bill: Look at your utility statements from the last 12 months to find your average spend.
Cost per kWh: This is the rate your utility company charges. In the US, the average is roughly $0.15 – $0.20, but it can be much higher in states like California or Massachusetts.
System Size: Most residential systems range from 5kW to 10kW.
Sunlight Hours: This refers to "peak" sun hours, which is typically between 3 and 6 hours depending on your latitude and local weather.
The "Payback Period" Explained
The payback period is the amount of time it takes for your cumulative energy savings to equal the initial cost of the solar installation. Once you pass this "break-even" point, every dollar saved on your electricity bill is pure profit. Most modern solar systems have a payback period of 6 to 10 years, while the panels themselves are warranted to last 25 years or more.
Example Calculation
Imagine a homeowner in Arizona with a 6kW system. They receive 5.5 peak sun hours per day. Their annual production would be approximately 9,000 kWh (accounting for system losses). At $0.14 per kWh, they save $1,260 annually. If the system cost $10,000 after tax credits, their payback period would be just 7.9 years.
Maximizing Your Savings
To ensure your calculator results reflect reality, consider the Federal Investment Tax Credit (ITC). Currently, homeowners can deduct 30% of the cost of installing a solar energy system from their federal taxes. Our calculator uses the "post-incentive" cost, so be sure to subtract that 30% credit from your total quote before entering the installation cost.
function calculateSolarROI() {
var monthlyBill = parseFloat(document.getElementById('monthlyBill').value);
var kwhRate = parseFloat(document.getElementById('kwhRate').value);
var systemSize = parseFloat(document.getElementById('systemSize').value);
var sunHours = parseFloat(document.getElementById('sunHours').value);
var installCost = parseFloat(document.getElementById('installCost').value);
if (isNaN(monthlyBill) || isNaN(kwhRate) || isNaN(systemSize) || isNaN(sunHours) || isNaN(installCost)) {
alert("Please enter valid numerical values in all fields.");
return;
}
// Efficiency Factor: Typically 0.75 to 0.80 due to inverter losses, wiring, and dirt
var efficiency = 0.78;
// Annual Production in kWh
var annualProduction = systemSize * sunHours * 365 * efficiency;
// Annual Savings in Dollars
var annualSavings = annualProduction * kwhRate;
// Monthly utility needs
var annualUtilityNeeds = (monthlyBill / kwhRate) * 12;
// We cannot save more than we actually use (assuming no SREC or net metering profit)
// Most homeowners aim to offset 100%, but for simplicity, we cap savings at the bill amount
var actualSavings = Math.min(annualSavings, (monthlyBill * 12));
// Payback Period
var paybackYears = installCost / actualSavings;
// 25-Year Net Profit (Panels usually last 25 years)
var totalSavings25 = actualSavings * 25;
var netProfit = totalSavings25 – installCost;
// Display Results
document.getElementById('resProduction').innerText = Math.round(annualProduction).toLocaleString() + " kWh";
document.getElementById('resAnnualSavings').innerText = "$" + Math.round(actualSavings).toLocaleString();
if (paybackYears > 25) {
document.getElementById('resPayback').innerText = "25+ Years";
document.getElementById('resPayback').style.color = "#c0392b";
} else {
document.getElementById('resPayback').innerText = paybackYears.toFixed(1) + " Years";
document.getElementById('resPayback').style.color = "#e67e22";
}
document.getElementById('resNetProfit').innerText = "$" + Math.round(netProfit).toLocaleString();
document.getElementById('solar-results').style.display = 'block';
// Smooth scroll to results
document.getElementById('solar-results').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}