Solar Panel Payback Calculator
Work out how many years it takes for a home solar system to pay for itself, what it costs after incentives, and what it returns over 25 years. Everything runs in your browser — nothing is sent anywhere and no email is required.
Assumes a 0.5% per year panel output decline and a 77% system derate (inverter, wiring, heat, soiling), which is the standard NREL PVWatts default. Payback uses rising utility rates.
How the math works
Annual production is the standard industry estimate:
kWh/year = system kW × peak sun hours × 365 × 0.77
First-year savings are that production multiplied by your electricity rate. Each following year, production drops 0.5% as panels degrade while the utility rate rises by your escalation figure. Payback is the year in which cumulative savings pass net system cost.
Frequently asked questions
What is a good solar payback period?
Most US residential solar systems pay for themselves in 7 to 12 years. Under 8 years is strong, and is usually driven by high electricity rates, good sun hours, or generous state incentives. Over 15 years, the economics depend heavily on how long you plan to stay in the home.
Does this calculator include the federal tax credit?
Yes, in the incentives field. Enter the total percentage you expect to receive back from federal, state, and utility incentives combined. The calculator subtracts that from gross system cost before computing payback.
What are sun hours and where do I find mine?
Peak sun hours are the number of hours per day that sunlight hits 1,000 W per square meter. It is not daylight hours. The US ranges roughly from 3.5 (Pacific Northwest, Northeast) to 6.5 (Southwest desert). NREL publishes a free solar resource map by ZIP code.
Why does my utility rate matter so much?
Solar savings are the electricity you no longer buy. At 12 cents per kWh the same system saves half as much as it does at 24 cents. Utility rate is usually the single largest driver of payback period, more than panel price.
Related guides
Get weekly eco swaps in your inbox.
Plastic-free picks, low-tox swaps, and sustainable finds — curated every week. No greenwashing. Unsubscribe anytime.
No spam. We hate it too.