Solar Panel ROI Calculator
Calculate your solar panel return on investment, payback period, and 25-year savings.
Factor in system cost, monthly savings, and incentives.
Solar ROI
Solar panel ROI measures how quickly your solar investment pays for itself and total savings over the system lifetime.
Payback period:
Payback = Net System Cost / Annual Savings
Net Cost = Total Cost − Federal Tax Credit − State/Local Incentives
25-year savings:
Total Savings = (Annual Savings × 25) − Net Cost
Federal Solar Tax Credit (ITC):
- 30% of system cost through 2032
- 26% in 2033
- 22% in 2034
Average system costs (2024):
- Residential: $2.50–$3.50 per watt before incentives
- 6 kW system: $15,000–$21,000 before credits
- After 30% ITC: $10,500–$14,700
Key factors affecting ROI:
- Local electricity rates (higher = faster payback)
- Sun hours per day (4–6 hours average)
- System size vs consumption
- Net metering policies
- Electricity rate increases (avg 2.5%/year)
- Panel degradation (~0.5%/year)
Typical payback periods:
- Sunny states (CA, AZ, TX): 5–8 years
- Average states: 8–12 years
- Cloudy/cheap electricity: 12–16 years