Solar
Solar Payback Calculator
Simple solar payback is reached when accumulated modeled bill offsets equal visible net installed cost. The production estimate remains independent of rates and policy data.
Estimate solar production independently, then calculate simple payback from visible installed cost, energy use, rate, escalation, and degradation.
Calculated result
Solar production estimate
Calculating…
Calculated locally in your browser
Planning math only. Verify equipment specifications and installation requirements separately.
Layer B · economics
Economics estimate
Loading dated rate configuration…
State averages are editable prefills, not utility tariffs. This section is not tax, financial, or investment advice.
Data provenance: NLR PVWatts v8 grid awaiting its first private-key refresh; the visible peak-sun-hours fallback is active. EIA residential state averages updated 2026-08-13. ZIP centroids use the 2025 Census Gazetteer. No ZIP or calculator input is sent to those sources. Read the solar data provenance and limitations.
What this calculator returns
Simple payback is not discounted cash flow and does not predict resale value, financing, taxes, maintenance, or tariff changes.
Formula and variables
The calculation runs entirely in your browser. Static formulas, definitions, examples, and tables remain readable without JavaScript.
Simple payback is the point when accumulated modeled bill offsets equal the visible net installed cost; annual offsets use adjusted production, usage, and rate.
- Eannual
- Annual electrical energy use or production, in kilowatt-hours.
- Parray
- Required or installed solar array nameplate power, in kilowatts DC.
- Y
- Estimated annual AC energy produced per installed kilowatt DC.
- PSH
- Peak sun hours per day from dated static data or the visible fallback input.
- f
- Visible orientation, shading, loss, reserve, or efficiency factor used by the selected tool.
Layer A annual kWh is always calculated first. Layer B can be disabled without changing that production result.
Worked example
| Input | Value |
|---|---|
| Solar array size | 8 kW DC |
| Monthly energy use | 900 kWh |
| ZIP Code | 80202 |
| Peak sun hours fallback | 4.5 h/day |
For an 8 kW array, the page first reports annual production, then accumulates the visible annual bill-offset scenario until it equals the entered $18,000 cost.
Reference table
| Factor | Default | Effect | Preferred replacement |
|---|---|---|---|
| Other system losses | 14% | Reduces annual AC production | Installer or equipment-specific model |
| Annual shading | 10% | Reduces annual production | On-site shade study |
| Rate increase | 2% | Raises modeled future bill offset | User-selected scenario |
| Annual degradation | 0.5% | Reduces modeled future production | Module warranty/model data |
Frequently asked questions
What does a payback beyond 25 years mean?
The modeled annual offsets did not recover the entered net cost within the calculator's 25-year comparison period.
Does simple payback include financing interest?
No. Use the Solar Loan Calculator for an amortization comparison and enter the appropriate net cost here.
Are incentives included?
No incentive is automatically applied. The visible net installed cost should already reflect only amounts you have independently verified.
Assumptions and limitations
- Not tax, financial, or investment advice.
- EIA values are state averages, not utility tariffs.
- A result beyond 25 years is reported without extrapolating indefinitely.
- Obtain a licensed installer site assessment.
Method and sources
Review the solar data sources, calculation methodology, and electrical formulas for the references most relevant to this calculation. The broader technical sources index records source scope and verification. Last reviewed .