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Solar Payback Period Calculator

Work out solar payback period instantly with clear inputs, formula shown and shareable results.

About Solar Payback Period Calculator

Payback is installed cost divided by annual saving, but the saving depends heavily on how much generation is self-consumed: exported units usually earn far less than the retail tariff avoided by self-use. Levelised cost of energy divides the capital cost by lifetime generation, allowing comparison with the grid tariff directly.

Formula

Solar payback

saving = self-used kWh x tariff + exported kWh x export rate; payback = cost / saving

Worked example

With the default values below, Solar Payback Period Calculator returns Payback period of 6.79. Change any input above and every figure here is recalculated in your browser.

Inputs used

Installed system cost
8,500
Annual generation
5,400 kWh
Electricity tariff
0.29
Share exported at half price
40 %

Results

Payback period
6.79 years
Annual saving
$1,252.80
25-year saving
$20,940.80
Levelised cost of energy
$0.0670

Step by step

  1. 1Values used
  2. 2Solar payback
  3. 3Payback period= 6.79 years
  4. 4Annual saving= 1,252.80
  5. 525-year saving= 20,940.80
  6. 6Levelised cost of energy= 0.0670 per kWh

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 4 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

Why does self-consumption matter so much?

Avoiding a 29 cent purchase is worth far more than earning a 5-15 cent export rate, so shifting loads into daylight hours shortens payback substantially.

Should degradation be included?

Yes. Panels lose roughly 0.5% of output per year, so lifetime generation is about 94% of the naive 25-year figure.

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