Solar Panel Payback
Estimate the payback period of a home solar installation.
About Solar Panel Payback
Year-one savings are the monthly bill times the offset, repeated with a small annual escalation for rising utility rates. Payback is the cost divided by that savings. Solar pays itself off through avoided utility bills and then produces free power, so the payback horizon tells you how quickly the investment turns profitable.
Formula
Solar Panel Payback
Payback = cost / (monthly bill x offset%); 10-yr net = summed savings - cost
- offset
- Share of the bill the panels replace
Worked example
With the default values below, Solar Panel Payback returns Year 1 Savings of $1,728.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- System cost (after credits)minimum 0
- 15,000
- Current monthly billminimum 0
- 160
- % bill offsetaccepts 0–100 %
- 90 %
- Annual savings increaseaccepts 0–20 %
- 3 %
Results
- Year 1 Savings
- $1,728.00
- Payback Period
- 8.7 yr
- Break-Even Point
- $15,000.00
- 10-Year Savings
- $4,809.58
Step by step
- 1Values used
- 2Solar Panel Payback
- 3Year 1 Savings= 1,728.00
- 4Payback Period= 8.7 yr
- 5Break-Even Point= 15,000.00
- 610-Year Savings= 4,809.58
Assumptions and limits
- The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation or tax into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Solar Panel Payback calculated?
Payback = cost / (monthly bill x offset%); 10-yr net = summed savings - cost Year-one savings are the monthly bill times the offset, repeated with a small annual escalation for rising utility rates. Payback is the cost divided by that savings.
Why does Solar Panel Payback matter?
Solar pays itself off through avoided utility bills and then produces free power, so the payback horizon tells you how quickly the investment turns profitable.
What values do I need to enter?
This calculator takes 4 inputs: System cost (after credits), Current monthly bill, % bill offset, Annual savings increase. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.