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.

USD covering panels, inverters, racking, labor, permits, and interconnection fees.
Federal tax credits, state rebates, utility upfront payments, or renewable energy certificates.
Look at 12 months of utility bills or smart meter exports for accuracy.
Year 1 output from your installer proposal or PVWatts simulation before degradation.
Blended rate including energy, delivery, and riders—convert cents to dollars per kWh.
Historical average utility escalation or your energy consultant's forecast.
Match panel warranty (often 25 years) or financing term for apples-to-apples ROI.

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.
  • Simple payback divides net system cost by first-year bill savings and ignores loan interest or operations and maintenance.
  • ROI compounds savings by escalating the utility rate each year; adjust the growth assumption if your utility has tiered or time-of-use pricing.
  • To incorporate panel degradation, reduce the annual production input by 0.5%–0.8% per year or shorten the analysis horizon.

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