Calculate your Return on Investment (ROI) and how many years until your solar system pays for itself.
Your Investment Analysis
Net System Cost:$0.00
Estimated Payback Period:0 Years
25-Year Total Savings:$0.00
25-Year Net Profit:$0.00
Return on Investment (ROI):0%
What is the Solar Payback Period?
The solar payback period is the time it takes for the electricity bill savings generated by a solar energy system to equal the initial net cost of installing the system. For most residential installations in the United States, this period typically ranges from 6 to 10 years, depending on local utility rates and available incentives.
How to Calculate Solar ROI
To determine your specific payback period, we use the following formula and variables:
Net Cost: Total installation price minus federal tax credits (ITC), state rebates, and local utility incentives.
Annual Benefit: Your estimated annual electricity savings minus any recurring maintenance costs.
Energy Inflation: The rate at which utility electricity prices rise (historically ~2-3% per year).
System Degradation: Solar panels lose a small amount of efficiency each year (typically 0.5%).
Example Calculation
Imagine you install a system for $25,000. You receive the 30% Federal Solar Tax Credit ($7,500), bringing your net cost to $17,500. If your system saves you $2,100 in the first year and electricity rates rise by 3% annually, your payback period would be roughly 7.6 years. After this point, all electricity produced by the system is essentially "free" for the remainder of its 25 to 30-year lifespan.
Factors That Speed Up Your Payback
Several factors can significantly reduce the time it takes to break even:
High Local Utility Rates: The more you pay for grid power, the more you save by generating your own.
State SRECs: Some states offer Solar Renewable Energy Certificates which provide ongoing income for the power you produce.
Net Metering: Policies that allow you to sell excess energy back to the grid at retail rates maximize your annual savings.
function calculateSolarPayback() {
var grossCost = parseFloat(document.getElementById('solar_cost').value);
var incentives = parseFloat(document.getElementById('solar_incentives').value);
var firstYearSavings = parseFloat(document.getElementById('solar_savings').value);
var energyIncrease = parseFloat(document.getElementById('solar_increase').value) / 100;
var maintenance = parseFloat(document.getElementById('solar_maintenance').value);
var degradation = parseFloat(document.getElementById('solar_degradation').value) / 100;
if (isNaN(grossCost) || isNaN(firstYearSavings)) {
alert("Please enter valid numbers for cost and savings.");
return;
}
var netCost = grossCost – incentives;
var cumulativeSavings = 0;
var year = 0;
var paybackYear = 0;
var total25Savings = 0;
// Simulation for 25 years
for (var i = 1; i = netCost && paybackYear === 0) {
// Linear interpolation for more precise payback year
var prevYearSavings = cumulativeSavings – netYearlyBenefit;
var neededInLastYear = netCost – prevYearSavings;
paybackYear = (i – 1) + (neededInLastYear / netYearlyBenefit);
}
}
var totalProfit = total25Savings – netCost;
var roi = (totalProfit / netCost) * 100;
// Display Results
document.getElementById('res_net_cost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (paybackYear > 0 && paybackYear <= 25) {
document.getElementById('res_payback').innerText = paybackYear.toFixed(1) + " Years";
} else if (paybackYear === 0 && cumulativeSavings 25 Years";
} else {
document.getElementById('res_payback').innerText = "Immediate";
}
document.getElementById('res_total_savings').innerText = "$" + total25Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_profit').innerText = "$" + totalProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_roi').innerText = roi.toFixed(1) + "%";
document.getElementById('solarResult').style.display = 'block';
}