Solar Payback Calculator
How long until a rooftop array pays for itself
Work out the net cost of a solar array after incentives, the year-one saving, the simple payback period and the 25-year picture — with utility inflation and panel degradation both accounted for.
Over 25 years
- Total electricity generated
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- Total bill savings
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- Net gain after the system is paid for
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- Return on the money invested
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Show the working
Year by year
| Year | kWh | Rate | Saving | Cumulative |
|---|
How this is calculated
Every assumption is listed so you can disagree with it. If a figure here is wrong, tell us and we will fix it.
The model
Production in year n is the system size multiplied by the specific yield, reduced by compounding panel degradation:
kWh(n) = size_kW × yield × (1 − degradation)^(n−1)
The value of that electricity is split between what you use on site, which offsets your retail rate, and what you export, which earns the export credit. The retail rate compounds at the escalation figure you set:
rate(n) = rate × (1 + escalation)^(n−1) saving(n) = kWh(n) × [ self% × rate(n) + (1 − self%) × export ]
Payback is the point where cumulative saving crosses net cost, interpolated within the year rather than rounded up to it. Cost of solar power is net cost divided by total generation over 25 years — the number to compare against what you currently pay per kWh.
What the defaults mean
- Specific yield is annual kWh per kW installed. The regional figures are typical values for a well-oriented, unshaded array; NREL's PVWatts will give you a far better number for your actual roof pitch, azimuth and shading.
- 0.5% degradation is the median for modern crystalline silicon modules. Most manufacturer warranties guarantee no worse than roughly 0.55% per year.
- 2.5% escalation is a long-run average for US residential electricity. Your utility may be running well above or below that; check your own bills over five years.
- 30% tax credit is the US federal residential clean energy credit. It is non-refundable, so it is only worth the full amount if you have that much tax liability.
What this deliberately leaves out
No inverter replacement (budget for one around year 12–15), no maintenance or cleaning, no financing interest, no discount rate, and no change to your property value or insurance. It also assumes your export arrangement stays as it is for 25 years, which is the assumption most likely to be wrong — net metering rules have been rewritten repeatedly, usually downward.
Treat the result as a screening figure. A quote you are about to sign deserves a model with your actual tariff structure in it.
Sources
The constants and default values above come from these public sources. Every one is free to read and none of them are ours — check the figures against them.
- NREL PVWatts Calculator Model your actual roof pitch, azimuth and shading to replace our regional specific-yield estimate with a figure for your site.
- EIA — Average Price of Electricity to Ultimate Customers Current residential electricity rates by state, for the rate and escalation inputs.
- NREL — Photovoltaic Degradation Rates The meta-study behind the 0.5% per year default degradation rate.
- IRS — Residential Clean Energy Credit Eligibility and the current percentage for the federal tax credit input.
- DSIRE — Database of State Incentives for Renewables & Efficiency State and utility rebates to enter in the "other rebates" field.
Built by Vano Gelashvili
Vano Gelashvili is a software developer who builds the calculators on this site. He is not an HVAC engineer, and says so on every page: what he brings is the arithmetic, worked openly against published data.