Scss Interest Rate Calculator

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Solar Panel ROI & Payback Period Calculator

Gross price before incentives.
Includes 30% Federal ITC.
Estimated bill reduction.
Avg. annual electricity inflation.

Financial Summary

Net Investment

$0

Payback Period

0 Years

25-Year Net Savings

$0

25-Year ROI (%)

0%

function calculateSolarROI() { var systemCost = parseFloat(document.getElementById('solar_systemCost').value) || 0; var incentives = parseFloat(document.getElementById('solar_incentives').value) || 0; var monthlySavings = parseFloat(document.getElementById('solar_monthlySavings').value) || 0; var annualIncrease = (parseFloat(document.getElementById('solar_annualIncrease').value) || 0) / 100; var netCost = systemCost – incentives; var currentAnnualSavings = monthlySavings * 12; var cumulativeSavings = 0; var paybackYear = 0; var foundPayback = false; var total25YearSavings = 0; for (var year = 1; year = netCost && !foundPayback) { paybackYear = year – 1 + ((netCost – (cumulativeSavings – currentAnnualSavings)) / currentAnnualSavings); foundPayback = true; } if (year === 25) { total25YearSavings = cumulativeSavings; } currentAnnualSavings *= (1 + annualIncrease); } var netProfit = total25YearSavings – netCost; var roiPercent = (netProfit / netCost) * 100; document.getElementById('solar_netCost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('solar_payback').innerText = foundPayback ? paybackYear.toFixed(1) + ' Years' : 'Over 25 Years'; document.getElementById('solar_totalSavings').innerText = '$' + netProfit.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('solar_roiPercent').innerText = roiPercent.toFixed(1) + '%'; document.getElementById('solar_results').style.display = 'block'; }

Understanding Your Solar Panel ROI

Investing in residential solar photovoltaic (PV) systems is one of the few home improvements that offers a guaranteed financial return. Unlike a kitchen remodel, solar panels pay for themselves by reducing or eliminating your monthly utility liabilities.

How the Solar Payback Period is Calculated

The solar payback period represents the time it takes for the cumulative electricity savings to equal the net cost of the system. Our calculator uses a sophisticated model that accounts for:

  • Net Investment: The sticker price of the system minus the 30% Federal Investment Tax Credit (ITC) and local utility rebates.
  • Utility Inflation: Traditionally, electricity prices rise by 2-4% annually. This makes solar more valuable every year you own it.
  • System Lifespan: Most Tier-1 solar panels are warrantied for 25 years, meaning the "Net Savings" shown above represents pure profit after the system has paid for itself.

Key Factors Influencing Your Returns

While the calculator provides a high-level estimate, several variables can accelerate your ROI:

  1. SRECs (Solar Renewable Energy Certificates): In certain states, you earn tradable certificates for every megawatt-hour your system produces, which can be sold for additional cash flow.
  2. Net Metering Policies: If your utility offers 1-to-1 net metering, you are credited at the full retail rate for excess energy sent back to the grid.
  3. Property Value Increase: Studies by Zillow and Lawrence Berkeley National Laboratory show that solar installations can increase home resale value by an average of 4.1%.

Realistic Example

Consider a standard 8kW system in a sunny climate. If the gross cost is $25,000, the 30% Federal Tax Credit immediately drops the cost to $17,500. If that system saves the homeowner $150 per month ($1,800/year), and electricity rates rise by 3.5% annually, the system will typically reach its break-even point in year 8 or 9. Over 25 years, that same system could generate over $60,000 in total electricity savings, representing a massive return on the initial investment.

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