Please enter valid numbers for System Cost and Monthly Bill.
Net System Cost (After Tax Credit):–
Est. First Year Savings:–
Payback Period:–
25-Year Total Savings:–
Return on Investment (ROI):–
Is Solar Worth It? Calculating Your Solar ROI
Switching to solar energy is one of the most significant home improvement investments a homeowner can make. Unlike a kitchen renovation which is purely cosmetic, a solar panel system generates a direct financial return. Use the Solar Panel Payback Calculator above to determine how long it will take for your system to pay for itself through electricity savings.
Understanding the Inputs
Total System Cost: This is the gross price quoted by your installer before any incentives. The average cost for a residential system in the US typically ranges between $15,000 and $25,000 depending on system size (kW).
Federal Tax Credit: The Investment Tax Credit (ITC) currently allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. This significantly lowers your net investment.
Current Monthly Bill: Your average electricity expenditure determines your potential savings. Higher bills usually result in shorter payback periods.
Energy Inflation: Electricity rates historically rise over time. A conservative estimate is 2-3% per year, but some regions see spikes of 4-5%.
What is a Good Solar Payback Period?
The "payback period" is the time it takes for your cumulative electricity savings to equal the net cost of the solar system. Once you pass this break-even point, all electricity generated is essentially free profit.
Generally, a payback period of 6 to 9 years is considered excellent. With the lifespan of modern solar panels extending to 25 or 30 years, this leaves decades of pure savings. Factors like local utility rates and sun exposure (peak sun hours) play a massive role in this equation.
How is Solar ROI Calculated?
Return on Investment (ROI) for solar is calculated by taking your total lifetime savings, subtracting the initial net cost, and dividing by that cost. An ROI of over 10% beats the historical average of the stock market, making solar a competitive financial vehicle in addition to an environmental choice.
function calculateSolarROI() {
// Get Input Values
var rawCost = document.getElementById('solarCost').value;
var rawCredit = document.getElementById('taxCredit').value;
var rawBill = document.getElementById('monthlyBill').value;
var rawInflation = document.getElementById('energyInflation').value;
// Variables for calculation
var systemCost = parseFloat(rawCost);
var taxCreditPercent = parseFloat(rawCredit);
var monthlyBill = parseFloat(rawBill);
var inflationRate = parseFloat(rawInflation) / 100;
// Element references
var resultBox = document.getElementById('resultsArea');
var errorBox = document.getElementById('errorBox');
// Validation
if (isNaN(systemCost) || isNaN(monthlyBill) || systemCost <= 0 || monthlyBill <= 0) {
errorBox.style.display = 'block';
resultBox.style.display = 'none';
return;
} else {
errorBox.style.display = 'none';
}
// 1. Calculate Net Cost
var taxCreditAmount = systemCost * (taxCreditPercent / 100);
var netCost = systemCost – taxCreditAmount;
// 2. Calculate First Year Savings
var annualSavingsStart = monthlyBill * 12;
// 3. Calculate Payback Period and Long Term Savings
var cumulativeSavings = 0;
var paybackYears = 0;
var foundPayback = false;
var totalSavings25Years = 0;
var currentYearSavings = annualSavingsStart;
// Loop through 25 years (standard warranty period)
for (var year = 1; year = netCost) {
// Logic to get fractional year for precision
var previousBalance = cumulativeSavings – currentYearSavings;
var remainingNeeded = netCost – previousBalance;
var fraction = remainingNeeded / currentYearSavings;
paybackYears = (year – 1) + fraction;
foundPayback = true;
}
// Add to total
totalSavings25Years += currentYearSavings;
// Increase electricity cost for next year due to inflation
currentYearSavings = currentYearSavings * (1 + inflationRate);
}
// 4. Calculate ROI
// ROI = (Total Gain – Cost) / Cost
var roiPercent = ((totalSavings25Years – netCost) / netCost) * 100;
// Formatting Output
var displayPayback = foundPayback ? paybackYears.toFixed(1) + " Years" : "25+ Years";
// Display Results
document.getElementById('resNetCost').innerHTML = "$" + netCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resAnnualSavings').innerHTML = "$" + annualSavingsStart.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resPayback').innerHTML = displayPayback;
document.getElementById('resTotalSavings').innerHTML = "$" + (totalSavings25Years – netCost).toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); // Showing NET savings usually looks better, or raw total? Label says "Total Savings", usually implies gross. Let's do Gross Savings. Actually, let's stick to "Life Time Savings" meaning accumulation.
// Re-eval: "25-Year Total Savings" usually implies the accumulated cash kept.
document.getElementById('resTotalSavings').innerHTML = "$" + totalSavings25Years.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resROI').innerHTML = roiPercent.toFixed(1) + "%";
// Show Box
resultBox.style.display = 'block';
}