Calculate your solar panel return on investment, payback period, and 25-year savings including federal tax credits and local incentives.
Including installation
Average home: 6-10 kW
Check your utility bill
Rebates, SRECs, etc.
Free electricity after
273.0% return on investment
100% of usage covered
| Gross System Cost | $25,000 |
| Federal Tax Credit (30%) | −$7,500 |
| State/Local Incentives | −$0 |
| Net Cost After Incentives | $17,500 |
| Year 1 Production | 13,140 kWh |
| Year 1 Savings | $1,800 |
| 25-Year Total Savings | $65,274 |
| Net Profit (Savings − Cost) | $47,774 |
| Return on Investment | 273.0% |
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Net Cost = System Cost − Federal ITC − State Incentives
Annual Production = System kW × Sun Hours/Day × 365 × (1 − Degradation)^Year
Payback = Year when Cumulative Savings ≥ Net Cost
ROI = (25-Year Savings − Net Cost) / Net Cost × 100
The average payback period is 6-10 years depending on location, electricity rates, and incentives. After payback, solar generates free electricity for 15-20+ more years.
The federal Investment Tax Credit (ITC) is 30% of the total solar installation cost through 2032. It steps down to 26% in 2033 and 22% in 2034.
Studies show solar panels increase home value by approximately $20 per $1 saved on annual energy bills, or roughly 4% of home value on average.
Most solar panels are warrantied for 25 years and can produce electricity for 30-40 years. Degradation is about 0.5% per year, meaning panels produce ~87% of original output at year 25.
Average US home uses 10,500 kWh/year. A 7kW system in a sunny area covers this. Divide your annual kWh by 1,400-1,600 (depending on sun hours) for system size in kW.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.