function calculateSolarROI() {
var systemCost = parseFloat(document.getElementById('systemCost').value);
var taxCredit = parseFloat(document.getElementById('taxCredit').value);
var systemSize = parseFloat(document.getElementById('systemSize').value);
var utilityRate = parseFloat(document.getElementById('utilityRate').value);
var sunHours = parseFloat(document.getElementById('sunHours').value);
var inflation = parseFloat(document.getElementById('inflation').value) / 100;
if (isNaN(systemCost) || isNaN(systemSize) || isNaN(utilityRate)) {
alert("Please enter valid numeric values.");
return;
}
// 1. Calculate Net Cost
var netCost = systemCost – (systemCost * (taxCredit / 100));
// 2. Annual Energy Production (kW * hours * days * efficiency factor)
// 0.78 is a standard derate factor accounting for inverter loss, wiring, and dirt
var annualProduction = systemSize * sunHours * 365 * 0.78;
// 3. Financial Savings
var year1Savings = annualProduction * utilityRate;
// 4. Cumulative Savings over 25 years with energy inflation
var totalSavings = 0;
var currentYearSavings = year1Savings;
var paybackYear = 0;
var cumulativeSavings = 0;
for (var i = 1; i = netCost && paybackYear === 0) {
// Linear interpolation for more accurate payback month
var prevCumulative = cumulativeSavings – currentYearSavings;
var needed = netCost – prevCumulative;
paybackYear = (i – 1) + (needed / currentYearSavings);
}
totalSavings += currentYearSavings;
currentYearSavings *= (1 + inflation);
}
// 5. ROI Calculation (Simplistic Lifetime Profit / Net Cost)
var lifetimeProfit = totalSavings – netCost;
var roiPercentage = (lifetimeProfit / netCost) * 100;
// Update UI
document.getElementById('resNetCost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resPayback').innerText = paybackYear > 0 ? paybackYear.toFixed(1) + ' Years' : 'Over 25 Years';
document.getElementById('resYear1').innerText = '$' + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotalSavings').innerText = '$' + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resROI').innerText = roiPercentage.toFixed(1) + '%';
document.getElementById('solar-results').style.display = 'block';
}
Understanding Solar Panel ROI: Is Solar Worth It?
Investing in solar panels is more than just an environmental choice; it is a long-term financial strategy. By generating your own electricity, you effectively "pre-pay" for 25 to 30 years of energy at a fixed cost, protecting yourself from the volatility of utility company rate hikes.
Key Factors in the Calculation
Net System Cost: This is the total price of equipment and installation minus incentives like the Federal Investment Tax Credit (ITC), which currently sits at 30% for US homeowners.
Solar Irradiance: Not all sunlight is equal. A 7kW system in Arizona will produce significantly more energy—and thus faster ROI—than the same system in Washington state due to higher peak sun hours.
Utility Rates: Solar is most profitable where electricity is expensive. If you pay $0.25/kWh, your panels "earn" money twice as fast as someone paying $0.12/kWh.
Energy Inflation: On average, utility rates increase by 2-4% annually. Our calculator factors this in to show how your savings grow as grid power becomes more expensive.
Example Scenario
Let's look at a typical residential installation:
Metric
Value
Initial Investment
$22,000
30% Tax Credit
-$6,600
Net Cost
$15,400
Annual Savings (Year 1)
$1,800
Estimated Payback
~7.5 Years
Maximizing Your Investment
To ensure the shortest payback period, consider Net Metering. This is a billing mechanism that allows you to send excess energy back to the grid during the day and receive credits on your bill for when you use energy at night. Additionally, keep your panels clean and ensure no new trees are shading your roof, as even partial shade can disproportionately reduce system output.
Note: This calculator provides an estimate based on industry standards. For an exact quote, a site visit is required to assess roof orientation, tilt, and local permitting fees.