Solar ROI Calculator
Solar quotes love to show gross savings and skip the real cost. This works out the net cost after incentives, how many years until it pays for itself, and the return (IRR) — then compares it against simply keeping that money invested.
Is this solar quote worth it?
Five questions. Everything else we assume for you, and show you what we assumed.
$
$
Before any incentive — the headline number on the proposal.
Solar pays back slowly. Moving early is the main way it loses.
Educational, not financial advice.
Assumptions used
Last updated May 24, 2026- Utility rate inflation2.50%EIA electricity price history
- Panel degradation / year0.25%NREL degradation studies
These are starting defaults you can edit in the tool. They're reviewed and sourced — not personalized advice. Confirm anything that affects a real decision.
Who this is for
- You've got a solar quote and want to sanity-check the payback.
- You want to compare solar against investing the same cash instead.
- You're a homeowner planning to stay long enough for it to matter.
How it works
- 1Tell us your electric bill, the quoted price, and how long you'll stay.
- 2We model production decline, utility-rate inflation, and the time value of money.
- 3You get net cost, payback year, IRR, and a cash-vs-invested comparison.
Methodology
We project annual savings as production × your electric rate, growing each year by utility-rate inflation and shrinking slightly as panels degrade. Net cost subtracts any incentives you qualify for. Payback is the year cumulative savings exceed net cost; IRR is the annualized return on the up-front spend over the system life. The comparison line asks what the same money would have done in a low-cost index fund. The federal residential credit (IRC §25D) ended for systems placed in service after 2025, so it is not part of this model at all — only state, local or utility incentives you confirm yourself come off the price.
Example
A $30k system with a $5k incentive nets to $25k. If it saves ~$1,800 in year one and utility rates climb a few percent a year, payback often lands around years 11–14 — a solid but not spectacular return. Whether that beats investing the $25k depends on your rate and how long you stay, which the tool spells out.
FAQ
- Does the 30% federal tax credit still apply?
- The residential clean-energy credit (IRC §25D) ended in 2025, so most 2026 installs don't qualify. We default the credit off and let you toggle it on only if your situation qualifies — confirm current law.
- Is solar a good investment?
- Sometimes. It's strongest with high electric rates, good sun, a long stay, and a fair price. The tool compares it head-to-head with keeping the cash invested so you can see which wins for you.
- What if I'm financing it?
- Enter the financing cost — paying interest on the system lengthens payback and lowers the effective return, which the model reflects.
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