Solar
Solar ROI Calculator
Solar ROI compares modeled long-term bill offsets with visible net installed cost. Annual production is calculated first and remains useful even when the separate economics layer is disabled.
Estimate solar production first, then show dated simple ROI, payback, and net savings from visible cost, rate, escalation, and degradation inputs.
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
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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
ROI is a simple undiscounted scenario, not a forecast. Financing, taxes, export compensation, maintenance, and incentives are excluded unless explicitly entered elsewhere.
Formula and variables
The calculation runs entirely in your browser. Static formulas, definitions, examples, and tables remain readable without JavaScript.
Annual production = array kW × adjusted kWh/kW; first-year savings = lesser of production and use × rate; simple ROI = (modeled savings - cost) / cost.
- 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 production is independent of policy. Layer B uses only visible cost, rate, escalation, degradation, and a fixed 25-year comparison period.
Worked example
| Input | Value |
|---|---|
| Solar array size | 8 kW DC |
| Monthly energy use | 900 kWh |
| ZIP Code | 80202 |
| Array orientation | South |
An 8 kW array under the default production assumptions returns annual kWh in Layer A; Layer B then compares up to that energy with the visible $0.18/kWh rate and $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
Is solar ROI the same as payback period?
No. ROI compares modeled value with cost over the fixed scenario period, while payback identifies when accumulated modeled offsets reach cost.
Does the ROI calculation discount future cash flows?
No. It is a simple undiscounted scenario using visible rate-change and degradation assumptions.
Does this include a federal tax credit?
No. Current IRS guidance does not allow Section 25D residential credit expenditures after December 31, 2025, so no credit is assumed.
Assumptions and limitations
- Not tax, financial, or investment advice.
- State average rates differ from actual utility tariffs and export rules.
- Actual production varies with weather, soiling, shading, degradation, and equipment.
- 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 .