Deciding to go solar is a significant financial decision. This calculator helps you determine the "Break-Even Point" (payback period) and the long-term return on investment (ROI) for a residential solar photovoltaic (PV) system.
Key Variables Explained
Total System Cost: The gross price of the solar installation, including hardware, labor, and permitting.
Federal Tax Credit (ITC): Currently, the federal solar tax credit allows you to deduct 30% of your solar installation costs from your federal taxes.
Daily Sunlight Hours: This isn't just daylight; it refers to "peak sun hours" where the sun's intensity reaches 1,000 watts per square meter.
Electricity Rate: The amount your utility company charges you per kilowatt-hour (kWh). Solar panels become more valuable as utility rates rise.
Example Calculation
Suppose you live in a sunny state with the following profile:
Monthly Bill: $200
Installation Cost: $25,000
Federal Credit: 30% ($7,500)
Net Cost: $17,500
If your annual electricity savings are $2,400, your payback period would be 7.2 years ($17,500 / $2,400). Considering most solar panels are warrantied for 25 years, you would enjoy over 17 years of essentially free electricity.
Factors That Influence Your ROI
While this calculator provides a solid estimate, several local factors can influence your actual savings:
Roof Orientation: South-facing roofs in the northern hemisphere typically produce the most energy.
Net Metering Policies: Some states allow you to sell excess energy back to the grid at retail rates, while others use "avoided cost" rates which are lower.
Local Incentives: Many states offer additional SRECs (Solar Renewable Energy Certificates) or local rebates that further reduce the net cost.
Degradation: Solar panels lose about 0.5% efficiency per year, though modern Tier-1 panels maintain over 85% efficiency after 25 years.
function calculateSolar() {
var monthlyBill = parseFloat(document.getElementById("monthlyBill").value);
var elecRate = parseFloat(document.getElementById("elecRate").value);
var systemCost = parseFloat(document.getElementById("systemCost").value);
var taxCredit = parseFloat(document.getElementById("taxCredit").value);
var sunHours = parseFloat(document.getElementById("sunHours").value);
if (isNaN(monthlyBill) || isNaN(elecRate) || isNaN(systemCost) || isNaN(taxCredit) || isNaN(sunHours) || elecRate <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Calculation Logic
var annualBill = monthlyBill * 12;
var annualKwhUsed = annualBill / elecRate;
// Net Cost after Tax Credit
var netInvestment = systemCost * (1 – (taxCredit / 100));
// Annual Savings (assuming solar covers 100% of the bill)
// In reality, this depends on system sizing, but for a payback calculator,
// we assume the user is sizing to their needs.
var annualSavings = annualBill;
// Payback Period
var paybackYears = netInvestment / annualSavings;
// 25 Year Total Profit (25 years of savings – original net cost)
// Factoring in a 2% annual increase in electricity prices (conservative)
var totalSavings25 = 0;
var currentYearSavings = annualSavings;
for (var i = 1; i <= 25; i++) {
totalSavings25 += currentYearSavings;
currentYearSavings *= 1.02; // 2% utility inflation
}
var netProfit = totalSavings25 – netInvestment;
// Format results
document.getElementById("netCostDisplay").innerText = "$" + netInvestment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("annualSavingsDisplay").innerText = "$" + annualSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("paybackDisplay").innerText = paybackYears.toFixed(1) + " Years";
document.getElementById("totalProfitDisplay").innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show the results section
document.getElementById("results").style.display = "block";
// Smooth scroll to results
document.getElementById("results").scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}