Wells Fargo House Loan Calculator

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Solar Panel ROI & Payback Calculator

Average US home: 6-10 kW
Total before tax credits
Check your utility bill
Peak sun hours (4.0 – 5.5 is typical)
Current ITC is 30%
State/utility specific cash back

Your Solar Analysis

Net System Cost:

$0.00

Annual Electricity Savings:

$0.00

Payback Period:

0.0 Years

25-Year Net Profit:

$0.00

function calculateSolarROI() { var systemSize = parseFloat(document.getElementById('systemSize').value); var grossCost = parseFloat(document.getElementById('grossCost').value); var elecRate = parseFloat(document.getElementById('elecRate').value); var sunHours = parseFloat(document.getElementById('sunHours').value); var taxCreditPerc = parseFloat(document.getElementById('taxCreditPerc').value); var rebates = parseFloat(document.getElementById('rebates').value); if (isNaN(systemSize) || isNaN(grossCost) || isNaN(elecRate) || isNaN(sunHours)) { alert("Please fill in all required fields with valid numbers."); return; } // 1. Calculate Net Cost var taxCreditValue = grossCost * (taxCreditPerc / 100); var netCost = grossCost – taxCreditValue – rebates; // 2. Calculate Energy Production // Efficiency factor (de-rate) usually around 0.75 – 0.85 for real-world losses (wiring, inverter, dust) var annualKwh = systemSize * sunHours * 365 * 0.80; // 3. Calculate Annual Savings var annualSavings = annualKwh * elecRate; // 4. Calculate Payback Period var paybackYears = netCost / annualSavings; // 5. Calculate 25-Year ROI (accounting for 0.5% annual degradation) var total25YearProduction = 0; var currentProd = annualKwh; for (var i = 0; i < 25; i++) { total25YearProduction += currentProd; currentProd *= 0.995; // 0.5% degradation } var totalLifeSavings = total25YearProduction * elecRate; var netProfit = totalLifeSavings – netCost; // Display Results document.getElementById('resNetCost').innerText = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resAnnualSavings').innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resPayback').innerText = paybackYears.toFixed(1) + " Years"; document.getElementById('resTotalProfit').innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('results-area').style.display = 'block'; }

Understanding Your Solar ROI

Investing in solar energy is one of the most effective ways to reduce your carbon footprint while locking in long-term financial savings. However, understanding the Solar Return on Investment (ROI) and the payback period is crucial before signing a contract.

Key Factors in the Calculation

  • System Size: Measured in kilowatts (kW), this is the power capacity of your panels. A larger system costs more but generates more electricity.
  • The Federal Investment Tax Credit (ITC): As of 2024, the federal government offers a 30% tax credit on the total cost of your solar system installation. This significantly reduces the "Net Cost."
  • Peak Sun Hours: This isn't just daylight; it's the intensity of the sun. Even in cloudy areas, solar works, but higher sun hours lead to a faster ROI.
  • Electricity Rates: The more your utility company charges per kWh, the more money you save by producing your own power.

Example Scenario

If you install a 7 kW system at a gross cost of $21,000:

  1. Apply the 30% Federal Tax Credit: $21,000 – $6,300 = $14,700 (Net Cost).
  2. If your system produces 10,000 kWh per year and your rate is $0.15/kWh, you save $1,500 annually.
  3. Your payback period would be approximately 9.8 years ($14,700 / $1,500).

Long-term Value

Most solar panels are warrantied for 25 years. After the payback period, the electricity generated is essentially free. With utility rates historically rising by 2-3% annually, your real-world savings are often even higher than the initial estimates provided by this calculator.

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