Estimate when a solar installation may pay for itself
Solar payback compares the net cash paid for a system with the energy savings it may produce over time. This calculator also adds panel degradation, electricity-price changes, and a discount rate so the result is more informative than dividing cost by one year's savings.
How to use this calculator
Use the installed cash price before financing interest, then subtract incentives you reasonably expect to receive. Enter system size, local peak sun hours, electricity price, degradation, price escalation, discount rate, and analysis period. Use the utility value of self-consumed and exported energy rather than assuming every kilowatt-hour offsets the retail rate.
How to interpret the result
Simple payback is the point when undiscounted cumulative savings match net installed cost. Lifetime ROI compares total savings with net cost, while net present value discounts future savings; positive NPV means the entered savings exceed the entered discount-rate hurdle.
Decision checks
Review roof orientation, shading, inverter replacement, maintenance, insurance, interconnection charges, export tariffs, time-of-use rates, and whether incentives are taxable or capped. Compare cash purchase and financing separately because interest and dealer fees can materially change payback.
Compare realistic scenarios
Run conservative, expected, and optimistic production cases. Also test lower export compensation, no electricity-price increase, an inverter replacement, and a higher discount rate to see whether the project remains attractive under less favorable assumptions.
Limitations and important context
The production formula uses system size and average peak sun hours; it is not an engineering simulation. It does not model hourly load matching, clipping, temperature, snow, shading, batteries, demand charges, financing, taxes, or incentive eligibility.
For location-specific production modeling, use the US National Renewable Energy Laboratory's PVWatts calculator. The US Department of Energy also explains residential solar decisions, while Natural Resources Canada publishes solar photovoltaic guidance.