Solar Payback Calculator
Calculate how many years it will take for your rooftop solar system to pay for itself through avoided utility bills, and project 25-year net savings.
How to use the Solar Payback Calculator
- 1Enter net turnkey solar installation cost (after federal/state tax credits and incentives).
- 2Enter average monthly electric bill before installing solar.
- 3Enter solar offset percentage (default 80%).
- 4Optionally adjust annual utility rate inflation (default 3.5%).
How Solar Payback is Calculated
Simulates annual cash flows over 25 years factoring in annual utility rate inflation and subtle 0.5%/yr solar panel degradation.
Accounts for utility inflation increasing the value of generated solar energy over time.
- 1Year 1 Savings = ($180 × 12) × 0.85 = $1,836.00
- 2Factoring 3.5% utility inflation and 0.5% panel degradation:
- 3Cumulative savings reaches $14,000 breakeven at 6.8 years.
- 4Total 25-Year Cumulative Net Savings = $43,780.00
What affects Solar Payback results
- Local net metering policy (1:1 retail credit vs wholesale/avoided cost compensation).
- Federal and local solar tax credits (ITC).
Frequently Asked Questions
What is a typical solar payback period?
In areas with moderate-to-high electricity rates and good sun hours, most residential solar systems achieve complete financial payback in 6 to 9 years.
How do net metering credits accelerate solar payback?
Net metering credits homeowners at retail electricity rates for excess solar power fed back into the electrical grid during daylight peaks.
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