☀ Solar Return on Investment Calculator
Adjust inputs to match your situation — results update automatically
Auto-set by state selection — adjust if needed
% of solar used directly (rest exported)
Historical avg: 2–4% per year
Typical: 0.4–0.6% per year
AZ: 6–7 · CA/FL/TX: 5–6 · NE/NW: 3.5–4.5
Assumptions: Production estimated at system size × peak sun hours × 365 × 0.80 system efficiency. Annual savings = (self-consumed kWh × import rate) + (exported kWh × export rate). Rate escalates annually. Panel output degrades by selected rate per year. ITC applied in year 1 as lump-sum cost reduction. Does not include state incentives, SREC income, or battery storage value. This is an estimate — actual results depend on your specific installation, usage patterns, and future utility rates.
How to Use This Calculator
State Selection
Selecting your state auto-fills the export credit rate based on your utility's net metering program. California NEM 3.0 fills 4¢/kWh (avoided cost); Florida and Colorado fill your import rate (retail net metering). Adjust manually if your specific plan differs.
Self-Consumption Rate
This is the percentage of your solar generation that you use directly in your home (vs. exporting to the grid). A typical household uses 60–80% of its solar directly. Higher self-consumption is always better — exported power earns less than imported power costs in most states. If you have a battery, increase this to 85–95%.
Federal ITC
The federal Investment Tax Credit is currently 30% through 2032 under the Inflation Reduction Act. It applies directly to your federal tax liability — not as a refund. If your tax liability is less than 30% of your system cost, you can carry the unused credit forward to future years. Consult a tax professional for your specific situation.
Interpreting Results
The payback period is how many years until your cumulative savings equal your net system cost (after ITC). After the payback period, savings are pure return. The 25-year projection uses historical average rate escalation to estimate long-term value — but utility rates are unpredictable and the actual result will differ.
Once you've estimated your system size and ROI, use our Permit Readiness Wizard to get county-specific permit fees, inspection requirements, and interconnection steps.
Solar ROI Calculator FAQ
California's NEM 3.0 (Net Billing Tariff, effective April 2023) significantly reduced the credit rate for exported solar power — from the full retail rate (~28–35¢/kWh) to the avoided cost rate (~3–5¢/kWh during daytime). If you generate more solar than you use and export the excess, those exports earn very little credit. This is why battery storage paired with solar is now the standard recommendation in California — it shifts solar-generated power from daytime (low export value) to evening (high-value import offset), dramatically improving payback.
No — this calculator reflects only the federal ITC, utility savings from self-consumption, and export credits. State-specific incentives (Arizona state tax credit, New Jersey SREC income, NY-Sun incentive, Colorado Xcel Solar*Rewards, etc.) would further reduce your payback period. Enter your state incentive as a reduction to the system cost in the gross cost field to include it.
A payback period of 6–10 years is generally considered good for residential solar in the U.S., given that solar panels typically carry 25-year performance warranties and often last 30+ years. Under 6 years is excellent (common in Florida, Colorado, and New Jersey with retail NEM). Over 12 years warrants careful evaluation — particularly in California under NEM 3.0 for solar-only systems, where adding battery storage often brings the payback back into a favorable range.
This calculator provides a directionally useful estimate based on your inputs and simplified modeling assumptions. Actual results depend on your roof's orientation and shading (which significantly affect production), your actual usage patterns throughout the day, future utility rate changes (which are unpredictable), inverter and balance-of-system losses, and local weather. For a more precise estimate, get proposals from 2–3 licensed local installers and compare their modeled production and savings using tools like PVWatts or their proprietary software.