Solar ROI Calculator
Is solar right for you? Calculate your payback period, lifetime savings, and environmental impact based on your location, energy usage, and local electricity rates.
Enter your energy details to see financial returns.
Is Solar Worth It? The Economics Explained
Switching to solar is a significant upfront investment, but for many homeowners, it acts like a high-yield savings account. Instead of paying a utility company forever, you pay for equipment that generates free electricity for 25-30 years. The key metric is the Payback Period: how long it takes for your bill savings to equal the cost of the system.
Key Variables Affecting ROI
- Sunlight Hours: A panel in Arizona produces far more energy than the same panel in Seattle. This calculator adjusts for "Peak Sun Hours"—the equivalent number of hours per day when solar irradiance averages 1,000 watts per square meter.
- Electricity Rates: Higher local utility rates mean faster payback. If you pay $0.30/kWh, every kilowatt you generate saves you double what it would if you paid $0.15/kWh.
- Incentives: Tax credits (like the 30% US Federal ITC) and local rebates can slash the upfront cost by thousands, drastically improving your ROI.
Understanding Net Metering
Most residential systems are grid-tied. During the day, you often produce more power than you use. Under Net Metering, this excess power is sent to the grid, and your utility company credits your account. At night, you draw from the grid using those credits. This financial mechanism is crucial for making solar profitable without expensive battery storage.