function calculateSolarROI() {
var cost = parseFloat(document.getElementById('solar_cost').value) || 0;
var incentives = parseFloat(document.getElementById('solar_incentives').value) || 0;
var monthlyBill = parseFloat(document.getElementById('solar_bill').value) || 0;
var offset = (parseFloat(document.getElementById('solar_offset').value) || 0) / 100;
var increase = (parseFloat(document.getElementById('solar_increase').value) || 0) / 100;
var maintenance = parseFloat(document.getElementById('solar_maintenance').value) || 0;
var netCost = cost – incentives;
var annualBill = monthlyBill * 12;
var currentYearSavings = annualBill * offset;
var firstYearSavings = currentYearSavings – maintenance;
var cumulativeSavings = 0;
var paybackYears = 0;
var foundPayback = false;
var total25YearSavings = 0;
for (var year = 1; year = netCost && !foundPayback) {
paybackYears = year;
foundPayback = true;
}
}
document.getElementById('res_net_cost').innerText = '$' + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_y1_savings').innerText = '$' + firstYearSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_total_savings').innerText = '$' + total25YearSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (foundPayback) {
document.getElementById('res_payback').innerText = 'Estimated Payback Period: ' + paybackYears + ' Years';
} else {
document.getElementById('res_payback').innerText = 'Payback Period: Over 25 Years';
}
document.getElementById('solar-result').style.display = 'block';
}
Understanding Your Solar Payback Period
The solar payback period is the amount of time it takes for the energy savings generated by a solar power system to equal the initial cost of the installation. For most homeowners, this is the most critical metric when deciding if solar is a viable financial investment.
How the Calculation Works
To determine your ROI, we look at several moving parts:
Net Investment: This is your gross system cost minus any upfront incentives, such as the Federal Solar Tax Credit (ITC) or local utility rebates.
Energy Offset: Not every system covers 100% of a home's electricity needs. If your system is sized to cover 80% of your usage, your savings are calculated based on that 80%.
Utility Inflation: Electricity prices typically rise by 2% to 5% annually. Your solar savings actually increase every year because you are avoiding more expensive grid power.
Maintenance: While solar panels have no moving parts, small costs like occasional cleaning or inverter servicing should be factored in.
What is a Good Payback Period?
In the United States, the average solar payback period is typically between 6 and 10 years. If your payback period is under 8 years, your investment is considered excellent. If it is over 12 years, you may want to investigate if your state offers additional SRECs (Solar Renewable Energy Credits) or if your utility has favorable net metering policies.
Example Calculation
Imagine a scenario where a homeowner installs a system with the following details:
Gross Cost: $20,000
Federal Tax Credit (30%): -$6,000
Net Cost: $14,000
Monthly Savings: $150 ($1,800/year)
Calculated Payback: Approximately 7.7 years (assuming no electricity price hikes).
After the 7.7-year mark, every kilowatt-hour produced by the panels is essentially "free" energy for the remainder of the system's 25 to 30-year lifespan.
Factors That Speed Up Payback
Your payback period can be shortened significantly by:
State Incentives: States like Massachusetts or New Jersey offer performance-based incentives that pay you for the energy you produce.
High Electricity Rates: The more expensive your utility power is, the more money you save by switching to solar.
Net Metering: This allows you to "bank" excess energy produced during the day and use it at night, credited at the full retail rate.