Estimate your break-even point and 25-year financial gains from switching to solar.
Your Investment Outlook
Net System Cost:$0
Payback Period:0 Years
25-Year Net Savings:$0
25-Year ROI:0%
Understanding Your Solar Return on Investment
Investing in residential solar panels is more than an environmental choice; it is a long-term financial strategy. The Solar Payback Period is the time it takes for the electricity bill savings to cover the initial out-of-pocket cost of the solar installation.
Key Factors in the Calculation
Federal Investment Tax Credit (ITC): As of current laws, homeowners can deduct a significant percentage (typically 30%) of their solar installation costs from their federal taxes.
Energy Offset: This represents how much of your current electricity usage the new solar system will cover. A 100% offset means you produce as much energy as you consume annually.
Utility Inflation: Electricity rates typically rise between 2% and 5% annually. Solar locks in your energy costs, making it more valuable as grid power becomes more expensive.
Example Scenario
If you spend $20,000 on a solar system and receive a 30% tax credit ($6,000), your net cost is $14,000. If your monthly bill was $150 ($1,800/year) and you offset 100% of it, your payback period would be roughly 7 to 8 years, assuming moderate electricity rate hikes. Over 25 years, that same system could save you over $60,000 in avoided utility payments.
Is Solar Worth It for You?
Solar ROI is highest in states with high electricity rates and strong net metering policies. Net metering allows you to "sell" excess energy back to the grid during the day and use those credits at night. Even without perfect conditions, the increase in home property value often offsets the initial installation cost immediately.
function calculateSolarROI() {
var grossCost = parseFloat(document.getElementById('solar_systemCost').value);
var taxCreditPerc = parseFloat(document.getElementById('solar_taxCredit').value);
var rebates = parseFloat(document.getElementById('solar_rebates').value);
var monthlyBill = parseFloat(document.getElementById('solar_monthlyBill').value);
var offset = parseFloat(document.getElementById('solar_offset').value);
var rateIncrease = parseFloat(document.getElementById('solar_utilityIncrease').value);
if (isNaN(grossCost) || isNaN(monthlyBill) || grossCost <= 0) {
alert("Please enter valid positive numbers for system cost and monthly bill.");
return;
}
var netCost = grossCost – (grossCost * (taxCreditPerc / 100)) – rebates;
if (netCost < 0) netCost = 0;
var annualSavingsInit = monthlyBill * 12 * (offset / 100);
var cumulativeSavings = 0;
var paybackYears = 0;
var foundPayback = false;
var currentAnnualSavings = annualSavingsInit;
for (var year = 1; year = netCost) {
var fraction = (netCost – prevSavings) / currentAnnualSavings;
paybackYears = (year – 1) + fraction;
foundPayback = true;
}
// Prep for next year with utility inflation
currentAnnualSavings *= (1 + (rateIncrease / 100));
}
var totalProfit = cumulativeSavings – netCost;
var roi = (totalProfit / netCost) * 100;
document.getElementById('res_netCost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (foundPayback) {
document.getElementById('res_payback').innerText = paybackYears.toFixed(1) + " Years";
} else {
document.getElementById('res_payback').innerText = "Over 25 Years";
}
document.getElementById('res_totalSavings').innerText = "$" + cumulativeSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (netCost > 0) {
document.getElementById('res_roi').innerText = roi.toFixed(1) + "%";
} else {
document.getElementById('res_roi').innerText = "N/A (Zero Net Cost)";
}
document.getElementById('solar_results').style.display = 'block';
}