Want to know how long it could take for a solar energy system to pay for itself? Use our free Solar Payback Calculator to estimate the approximate payback period based on your solar system cost, incentives, annual electricity savings, and maintenance costs.
Enter your estimated solar system cost, available incentives or rebates, annual electricity savings, and yearly maintenance costs. The calculator will estimate your net system cost, annual net savings, and approximate payback period.
Solar Payback Calculator
Estimate how long it may take for your solar investment to pay for itself.
The estimated payback period is calculated by dividing the net solar system cost by the annual net savings. Actual payback can vary depending on electricity rates, solar production, system performance, financing, incentives, and maintenance costs.
How Does the Solar Payback Calculator Work?
The Solar Payback Calculator estimates how long it could take for a solar energy system to recover its initial cost through electricity savings.
The calculation uses four main inputs:
- Solar system cost: The estimated upfront cost of the solar installation.
- Incentives and rebates: Available incentives, rebates, or other reductions in the initial system cost.
- Annual electricity savings: The estimated amount of money the solar system saves on electricity each year.
- Annual solar maintenance: The estimated yearly cost of maintaining the solar system.
The calculator first subtracts incentives and rebates from the system cost to determine the estimated net system cost. It then subtracts annual maintenance costs from annual electricity savings to determine the estimated annual net savings.
The estimated payback period is calculated by dividing the net system cost by the annual net savings.
Example: How Long Does It Take for Solar to Pay for Itself?
For example, let’s say a solar energy system costs $20,000 and you receive $5,000 in incentives or rebates.
Your estimated annual electricity savings are $1,800, while annual solar maintenance costs are estimated at $200.
With these numbers:
- Net system cost: $15,000
- Annual electricity savings: $1,800
- Annual maintenance: $200
- Annual net savings: $1,600
- Estimated payback period: 9.38 years
This is a simplified estimate. Actual solar payback can vary depending on solar production, electricity rates, system performance, incentives, financing costs, maintenance, and changes in energy prices.