Solar Panel Payback Calculator — 25-Year ROI
Quick answer: Enter your system cost, size, sun hours, and electricity rate. Get payback year, 25-year savings, and ROI percentage.
Calculate when your solar panel system pays for itself and your total 25-year savings. Factors the 30% federal tax credit (IRA), state rebates, electricity inflation, panel efficiency degradation, and your local sun hours. Honest numbers without solar installer markup.
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Last reviewed: April 2026Report an error
US average 4-6. AZ/NV ~6-7, PNW ~3-4.
Payback in 7 years
$79,638
Net cost after credits: $17,500. Year-1 savings: $2,336. 25-year savings: $79,638. ROI: 355%.
Net Cost
$17,500
Annual kWh
14,600
25-yr ROI
355%
Net Position Over 25 Years
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How to Use This Solar Payback Calculator
- 1Enter system cost (gross, before incentives) and system size in kW.
- 2Enter peak sun hours per day for your location (US average: 4-6).
- 3Enter your current electricity price per kWh.
- 4Enter the federal tax credit % (currently 30%) and any state rebates.
- 5Read your payback year and 25-year savings.
Frequently Asked Questions
- The Investment Tax Credit (ITC) under the Inflation Reduction Act provides a 30% federal tax credit on solar installations through 2032. It then steps down to 26% in 2033 and 22% in 2034.
- Most panels are warranted for 25 years and continue to produce at 80-85% of original capacity beyond that. Inverters typically need replacement around year 10-15.
- Peak sun hours = the equivalent number of hours per day your panels receive 1,000 watts/m² (full strength sun). Sunny states like Arizona average 6+; cloudy regions like the Pacific Northwest average 3-4.
- No — most homes use net metering, sending excess solar back to the grid for credit. Batteries add backup during outages and time-shift usage but typically extend payback by 3-5 years.
- Yes — loans, leases, and PPAs are common. Financed systems still earn the tax credit (loan) but lease/PPA users typically don't. Cash purchase has the fastest payback; loan-financed systems still net positive but take 1-2 years longer.
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