Solar ROI Calculator

Going solar is a major financial commitment — the Solar ROI Calculator shows you whether the investment pays off and how quickly. Enter your solar system cost, monthly electric bill, electricity rate, and annual kWh generation, then set your incentives (including the 30% federal tax credit) and expected annual electricity rate increase. You'll get your payback period, annual savings, net system cost after incentives, and 20-year ROI.

Total cost of solar system before incentives

Average monthly electricity bill

/kWh

Current cost per kilowatt-hour

kWh

Expected yearly solar energy production

Federal Tax Credit *

Additional state or local solar incentives

%

Expected yearly increase in electricity rates

Results

Payback Period

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20-Year Total Savings

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Annual Savings

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Net System Cost (After Incentives)

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20-Year ROI

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Frequently Asked Questions

How do I calculate the solar payback period?

The solar payback period is calculated by dividing the net cost of your solar system (after incentives) by your annual electricity savings. For example, if your system costs $20,000 after incentives and saves you $2,000 per year, your payback period would be 10 years.

What factors affect solar ROI?

Key factors include system cost, local electricity rates, available incentives, solar panel efficiency, roof orientation, shading, and local sun exposure. Higher electricity rates and better incentives typically improve ROI.

How do I calculate solar panel return on investment?

Solar ROI is calculated by dividing your total savings over the system's lifetime by the initial investment, then multiplying by 100. Most solar systems provide 15-25% annual returns over their 25+ year lifespan.

Are solar panels worth it financially?

Solar panels are typically worth it if you have high electricity bills, good sun exposure, and available incentives. Most systems pay for themselves within 6-10 years and provide decades of free electricity afterward.

What is the current federal solar tax credit?

The federal solar Investment Tax Credit (ITC) allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. This credit is available through 2032, then steps down to 26% in 2033 and 22% in 2034.

How long do solar panels last?

Most solar panels come with 25-year warranties and can last 25-30 years or longer. Panel efficiency typically degrades by about 0.5% per year, meaning they'll still produce about 85-90% of their original output after 25 years.