Residential Solar Payback & ROI Calculator
See how long it takes rooftop solar to pay for itself. Enter the installed cost, incentives, expected energy production, and electric rate outlook to estimate net cost, annual savings, and long-term return on investment.
Examples
- $24,000 install cost, $7,200 incentives, 9,800 kWh usage, 9,200 kWh production, $0.19/kWh rate, 3% annual increase, 20-year horizon ⇒ Net cost after incentives: $16,800.00. Year-one savings: $1,748.00/year. Simple payback: 9.6 years. 20-year ROI: 108.5%.
- $18,500 install cost, $5,000 incentives, 7,500 kWh usage, 6,800 kWh production, $0.15/kWh rate, 2% annual increase, 25-year horizon ⇒ Net cost after incentives: $13,500.00. Year-one savings: $1,020.00/year. Simple payback: 13.2 years. 25-year ROI: 51.8%.
FAQ
What if my system overproduces my annual usage?
The calculator caps savings at your current usage. If your utility offers full net metering, you can increase the usage input to reflect credits you expect to sell back.
How should I handle performance degradation?
To approximate panel degradation, reduce the annual production input or shorten the analysis horizon to match the warranty period.
Can I include loan financing costs?
This tool focuses on cash-on-cash returns. To include financing, add annual loan payments to the net cost or compare with a separate loan payment calculator.
Additional Information
- Usable kWh savings are limited to the smaller of your annual consumption and the solar array's production estimate.
- Payback divides the net system cost by first-year bill savings without financing considerations.
- ROI sums projected savings over the analysis horizon assuming the utility rate grows at the percentage provided.