California, $22k system, 10,500 kWh, $0.32/kWh
Net $15,400. Year-1 savings $3,360 → payback ~5 years; 25-yr savings ≈ $115k.
Solar payback calculator
When will my solar panels pay for themselves?
Apply the 30% federal ITC, model 0.5%/year panel degradation and 3%/year rate inflation, and see year-by-year cumulative savings until the system breaks even.
Solar Payback
Solar payback period & 25-year ROI
Estimated payback7.9 yr
Net system cost$15,400.00
Year 1 savings$1,785.00
25-year savings$60,853.29
25-year ROI295.2%
Results are first-pass estimates. Verify with installers, manufacturers, and utility tariffs before purchase.
How it works
How it works
- Net cost = system cost × (1 − incentive%/100). The US federal ITC is 30% through 2032 per the Inflation Reduction Act.
- Year-n production = year-1 kWh × (1 − degradation)^(n−1). NREL median modern panels: 0.4–0.5%/year.
- Year-n savings = production × rate × (1 + inflation)^(n−1). Payback = first year where Σ savings ≥ net cost.
Worked examples
Worked examples
Texas, $18k system, 12,000 kWh, $0.13/kWh
Net $12,600. Year-1 $1,560 → payback ~9 years; 25-yr savings ≈ $52k.
New York, $24k system, 8,500 kWh, $0.23/kWh
Net $16,800 (after 25% state credit + 30% ITC). Payback ~8 years.
Solar payback FAQ
Solar payback FAQ
Does the calculator include loan interest?
No. For cash purchases the result is accurate. For loans, add interest to system cost or use the loan APR as a discount rate.
What about SRECs?
SREC income (NJ, MA, PA, DC, IL, MD) is not modeled — treat it as a bonus that shortens payback by 1–3 years.
Why 3% inflation?
EIA data shows residential US electricity rose 2.6%/year 2003–2023. California and HI exceeded 5% in recent years.
How accurate is 0.5% degradation?
NREL's 2022 review found median 0.5%/year for modern monocrystalline panels with 25-year linear warranties at 85–87%.
Calculator directory
Choose the right EV, solar, and battery calculator
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