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.
Use ROI to compare return, not timing
This page answers how large the modeled return is relative to the entered net cost over the full comparison period. It is most useful when two scenarios have different costs and cumulative benefits.
- Return denominator
- Simple ROI divides modeled net benefit by the visible net installed cost, so changing cost directly changes the percentage.
- Comparison horizon
- The result uses the stated 25-year scenario; it is not an annual yield or a guaranteed investment return.
- Cash-flow boundary
- Financing interest, maintenance, taxes, incentives, export compensation, and discount rates are outside this ROI unless represented in the entered net cost.
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.
- ROI25
- Simple 25-year return: modeled net benefit divided by the entered net installed cost.
- Cnet
- Net installed cost entered for this comparison, after only adjustments the user has independently verified.
- B25
- Cumulative modeled bill offsets across the fixed 25-year scenario.
- N25
- Modeled net benefit after subtracting Cnet from B25.
- Eeligible
- Annual solar production eligible for the simple bill-offset model, capped at entered annual use.
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
| ROI output | What it compares | What it does not answer |
|---|---|---|
| Simple ROI | 25-year modeled net benefit divided by entered net cost | Annualized or risk-adjusted return |
| Net benefit | Modeled bill offsets minus entered net cost | Present value after financing and maintenance |
| Production layer | Annual AC energy before the economics comparison | Guaranteed site production |
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 .