Solar payback calculator
Enter what the system costs after any incentives, how many kWh it makes a year and what your electricity costs. The calculator finds the year your savings catch up with the cost.
Enter your measurements
More options: Price change · Decline · Years
- Savings in year one
- $1,700.00
- Net cost after incentives
- $20,000.00
- Savings over the period
- $42,500.00
- Savings minus net cost
- $22,500.00
$20,000.00 − $0.00 incentives = $20,000.00
10,000 kWh × $0.17 = $1,700.00 saved in year one
$20,000.00 ÷ yearly savings = 11.8 years
Payback at other electricity prices
| Price per kWh | Payback | Savings in year one | Savings over the period |
|---|---|---|---|
| $0.10 | 20 years | $1,000.00 | $25,000.00 |
| $0.13 | 15.4 years | $1,300.00 | $32,500.00 |
| $0.17 | 11.8 years | $1,700.00 | $42,500.00 |
| $0.22 | 9.1 years | $2,200.00 | $55,000.00 |
| $0.30 | 6.7 years | $3,000.00 | $75,000.00 |
| $0.40 | 5 years | $4,000.00 | $100,000.00 |
How payback is worked out
net cost = installed cost − incentives savings each year = kWh made × price per kWh (adjusted for price change and output decline) payback = the point where cumulative savings reach the net cost
Simple payback assumes every kWh the system makes is worth what you pay for a kWh. That is close to true when you use the power yourself or your utility credits exports at the retail rate. Where exports earn less, use a lower “blended” price — and the payback gets longer.
What moves the answer most
- Your electricity price. The same system pays back twice as fast at 30¢ per kWh as at 15¢. The table below shows the range.
- Sunshine. PVWatts gives a south-facing kW of panels about 1,787 kWh a year in Phoenix and 1,071 in Seattle — a 67% difference in savings for the same cost.
- Incentives. The IRS’s Residential Clean Energy Credit (30%) does not apply to systems placed in service after December 31, 2025. State and utility programs vary — check what applies where you live.
- Financing. Interest on a loan adds to the cost; this calculator assumes cash.
What it leaves out
Inverter replacement, maintenance, insurance, a roof replacement during the system’s life, time-of-use rates and fixed monthly charges are all real but vary too much to default. Add one-off costs to the system cost if you know them. Off-grid systems are a different calculation — you are comparing against the cost of bringing in a power line or running a generator.
CalculatorSolar System Size Calculator →Need the yearly kWh for your bill and location first?What you’ll need
- Plug-in electricity usage monitorBudget price
Plugs in between the wall and a 120 V appliance and shows real watts and kWh over a day — the honest way to fill in a load list, especially for fridges that cycle on and off.
See options on Amazon (opens in a new tab) - 400 W residential-size solar panelPremium price
Fewer, larger panels for a cabin, shed or ground mount. Their higher voltage usually means an MPPT controller.
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As an Amazon Associate we earn from qualifying purchases. Links to products are affiliate links — they cost you nothing extra and help keep these calculators free.
Frequently asked questions
How long do solar panels take to pay for themselves?
It depends on cost, sun and your electricity price. As an example, a system costing $20,000 that makes 10,000 kWh a year saves $1,700 a year at 17¢ per kWh — about 11.8 years to pay back.
Is there still a federal solar tax credit?
The IRS says the Residential Clean Energy Credit (30%) covers property installed from 2022 through December 31, 2025, and is not available for property placed in service after that date. Check the IRS page and your state for current programs.
Should I include rising electricity prices?
You can, under More options — but it is a guess. Leaving it at 0% gives a conservative payback based on today’s price.
Does payback include batteries?
Only if you add their cost. Batteries for backup usually lengthen the payback because they add cost without making more kWh; their value is keeping the lights on.
Sources
- National Laboratory of the Rockies (formerly NREL) — PVWatts® Calculator (opens in a new tab) — Look up the solar resource (peak sun hours) and yearly output for your own address; default system losses 14%.
- IRS — Residential Clean Energy Credit (opens in a new tab) — 30% credit for property installed 2022 through December 31, 2025; not available for property placed in service after December 31, 2025.
- U.S. Energy Information Administration — Electric Sales, Revenue, and Average Price, Table 5A (2024 data, released October 2025) (opens in a new tab) — 2024 average residential customer: 863 kWh a month (about 10,359 kWh a year, 28.4 kWh a day); Louisiana 1,202 kWh a month, Hawaii 495.