Switching to solar energy is a significant financial decision. This Solar Panel Cost & Payback Calculator helps homeowners estimate the size of the system they need, the upfront costs, and how long it will take to break even on the investment through electricity savings.
How to Calculate System Size
To determine the correct solar array size, we first analyze your energy consumption. By dividing your average monthly electric bill by your utility rate (cost per kWh), we determine your monthly usage in kilowatt-hours. We then adjust for your local "peak sun hours"—the specific number of hours per day your panels will produce at maximum capacity based on your geography.
Formula: (Daily kWh Usage / Peak Sun Hours) × 1.20 (Efficiency Buffer) = Recommended System Size (kW)
The Federal Solar Tax Credit (ITC)
One of the biggest incentives for going solar in the United States is the Federal Investment Tax Credit (ITC). Currently set at 30% until 2032, this credit allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. This significantly lowers the "Net Cost" of your system and accelerates your payback period.
Understanding Payback Period
Your "Payback Period" is the amount of time it takes for your electricity savings to equal the net cost of the solar system. After this period, the electricity generated by your panels is essentially free profit. With rising utility rates, most homeowners see a payback period between 6 to 10 years, while the panels are typically warrantied for 25 years.
Factors Affecting Your Solar Costs
Panel Wattage: Higher wattage panels (e.g., 400W vs 300W) are more efficient but may cost more per unit. However, you need fewer of them.
Installation Complexity: Roof pitch, shading, and electrical panel upgrades can influence the "Cost per Watt" of installation.
Local Incentives: Some states and utilities offer additional rebates on top of the federal credit, which this calculator does not include but should be investigated.
function calculateSolar() {
// 1. Get Input Values
var bill = parseFloat(document.getElementById('monthlyBill').value);
var costPerKwh = parseFloat(document.getElementById('costPerKwh').value);
var sunHours = parseFloat(document.getElementById('sunHours').value);
var panelWatts = parseFloat(document.getElementById('panelWattage').value);
var installRate = parseFloat(document.getElementById('installCostPerWatt').value);
// 2. Validation
if (isNaN(bill) || bill <= 0) {
alert("Please enter a valid monthly electric bill.");
return;
}
if (isNaN(costPerKwh) || costPerKwh <= 0) {
alert("Please enter a valid electricity rate.");
return;
}
if (isNaN(sunHours) || sunHours <= 0) {
alert("Please enter valid peak sun hours.");
return;
}
// 3. Logic & Calculations
// Step A: Calculate Monthly Usage in kWh
var monthlyKwhUsage = bill / costPerKwh;
// Step B: Calculate Daily Usage
var dailyKwhUsage = monthlyKwhUsage / 30;
// Step C: Calculate Required System Size (kW)
// We divide by sun hours and multiply by 1.25 to account for system inefficiency (wiring, inverter loss, etc)
var requiredKw = (dailyKwhUsage / sunHours) * 1.25;
// Step D: Calculate Number of Panels
// (kW * 1000) / Watts per panel. round up.
var numPanels = Math.ceil((requiredKw * 1000) / panelWatts);
// Step E: Actual System Size based on integer panel count
var actualSystemKw = (numPanels * panelWatts) / 1000;
// Step F: Costs
var grossCost = actualSystemKw * 1000 * installRate;
var taxCredit = grossCost * 0.30;
var netCost = grossCost – taxCredit;
// Step G: Savings & ROI
var annualSavings = bill * 12;
// Assume electricity inflation? For simple ROI, we usually keep it static or use a simple division
var paybackYears = netCost / annualSavings;
// 4. Output Results
document.getElementById('resSystemSize').innerHTML = actualSystemKw.toFixed(2) + " kW";
document.getElementById('resPanels').innerHTML = numPanels;
document.getElementById('resGrossCost').innerHTML = "$" + grossCost.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resTaxCredit').innerHTML = "-$" + taxCredit.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resNetCost').innerHTML = "$" + netCost.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resAnnualSavings').innerHTML = "$" + annualSavings.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resPayback').innerHTML = paybackYears.toFixed(1) + " Years";
// Show results
document.getElementById('results').style.display = "block";
}