Solar Panel ROI & Savings Calculator
Estimate your Return on Investment (ROI), payback period, and total 20-year savings for a home solar energy system.
About
Installing solar panels is a significant financial decision that involves complex variables: local irradiation levels, electricity inflation rates, and federal tax incentives. This tool provides a pragmatic financial analysis. It determines the system size required to offset your bill and calculates the "Break-even Point" - the exact month when your cumulative savings surpass the initial installation cost. It accounts for the 30% Federal Investment Tax Credit (ITC) where applicable.
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Formulas
The Payback Period is reached when Cumulative Savings equal Net Cost.
Costnet = Costgross − (Costgross × 0.30)
Savingsyear = ProductionkWh × Rateutility × (1 + Inflation)n
Reference Data
| System Size | Approx. Cost (Before Tax Credit) | Annual Production (Avg) |
|---|---|---|
| 4 kW | $12,000 | 5,600 kWh |
| 6 kW | $18,000 | 8,400 kWh |
| 8 kW | $24,000 | 11,200 kWh |
| 10 kW | $30,000 | 14,000 kWh |
Frequently Asked Questions
The US federal government offers a tax credit (ITC) worth 30% of the total system cost (including labor and batteries). This is a direct reduction of your tax liability, not a deduction.
Most manufacturers warranty panels for 25 years. They will continue to produce power after that, though at slightly reduced efficiency (usually 80-85% of original capacity).