Solar Payback Calculator
Solar payback period and 25-year savings with price inflation.
Quick answer
- Formula: Net cost = Cost − incentives; Annual savings = Bill × offset%; Payback = Net cost ÷ annual savings
- Worked example — Net cost after incentives: $14,000 (full example below).
Solar Payback Calculator
| Net cost after incentives | $14,000 |
| Annual savings (year 1) | $1,920.00 |
| Simple payback period | 7.3 years |
| Total savings over 25 years | $70,002 |
| Net savings over 25 years (after net cost) | $56,002 |
A $20,000 system with $6,000 of incentives nets $14,000; offsetting 80% of a $2,400 bill saves $1,920 a year, paying back in about 7.3 years and saving about $70,002 over 25 years at 3% price inflation.
Enter the installed cost of a solar system, any incentives or rebates, your annual electricity bill and the share of that bill the system will offset. The calculator returns the net cost, first-year savings and the simple payback period.
The 25-year figure grows your annual savings each year by the electricity price inflation you enter, since every kilowatt-hour you generate avoids buying power at future prices. It is a simple-payback estimate: it excludes maintenance, financing costs, panel degradation and any export payments, so treat it as a planning guide.
The formula
Worked example
A $20,000 system with $6,000 of incentives nets $14,000; offsetting 80% of a $2,400 bill saves $1,920 a year, paying back in about 7.3 years and saving about $70,002 over 25 years at 3% price inflation.
The example is pre-loaded in the result panel — press Calculate with your own numbers to replace it.
Frequently asked questions
What payback period is typical?
US residential systems commonly pay back in roughly 6–12 years depending on local electricity prices, sun exposure and incentives, then generate mostly free power for the rest of a 25-year-plus panel life.
Why does electricity price inflation change the result so much?
Savings compound: at 3% yearly inflation the bill you avoid in year 25 is about double today's. Over 25 years that growth adds tens of thousands of dollars compared with flat prices.
Category: Everyday Life calculators
Sources & methodology
This calculator applies the formula shown on this page exactly as written, using the standard definitions for its inputs. Results are computed from the values you enter — no data is stored — and are rounded only for display.
Content last reviewed by CalcHub Editorial.
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