Free solar and battery calculators

Solar Payback Calculator

Enter the system cost, size and your electricity price to find the payback time and the savings year by year.

The solar payback calculator estimates how many years your solar panels take to produce enough electricity savings to cover what the system cost. Enter your system cost, your price per kWh, and either your system size with peak sun hours or your yearly production in kWh, and the tool shows your payback time, simple payback, first-year savings, and net gain. It works year by year, so it can include a yearly rise in electricity prices, a yearly loss of panel output, and yearly running costs. It runs in your browser, is free, and needs no sign-up. Nothing is uploaded. Results are estimates for planning.
Solar payback calculator example

How to use the Solar payback calculator

  1. Set Yearly production is to Worked out from system size or Entered in kWh per year.
  2. If you chose Worked out from system size, enter System size in W or kW, then enter Peak sun hours per day (h) for your location. Use a solar resource map such as NREL’s to find this value.
  3. If you chose Entered in kWh per year, type Production in year 1 (kWh) from your installer’s quote or from a tool such as NREL PVWatts.
  4. Enter Value of each kWh (price per kWh) using the price on your utility bill, in your currency.
  5. Enter System cost after incentives: the total you pay, minus any rebate or tax credit you will actually receive.
  6. Open More options and set Electricity price rise per year (%), Panel output loss per year (%), Running cost per year and Years to look at. In the system-size mode, also check System losses (%) (14 % by default) and Inverter efficiency (%) (96 % by default).
  7. Read the results: Payback time, Simple payback, Savings in year 1, Total savings over the period, Net gain and Net gain as % of cost. Then check the year-by-year savings table.

The example buttons above the form load ready-made scenarios, and Reset restores the starting example. Copy link stores every input in the page address, so the same calculation opens again later. Copy result gives the result lines with a link. Print / save as PDF includes your inputs, results, steps and the date.

How do you calculate solar payback period?

Simple payback is the system cost divided by the savings in year one. Year-one savings equal your year-one production in kWh multiplied by your price per kWh.

Year-one production is system size × peak sun hours × (1 − system losses) × inverter efficiency × 365. For the 6 kW example, with 4.5 peak sun hours, 14 % system losses and 96 % inverter efficiency, that gives about 8,136 kWh. At 0.1831 per kWh, the first-year savings are about 1,490, so simple payback is about 10 years (15,000 ÷ 1,490).

How long does it take for solar panels to pay for themselves?

For that same 6 kW example, the calculator reports a payback time of 10 years 4 months. The time depends on the system cost, how much the panels produce, your price per kWh and your running costs. A lower cost, a sunnier site or a higher electricity price all shorten it.

Another worked example from the calculator: a cost of 10,000 with 6,000 kWh a year at 0.1831 per kWh and no output loss gives a payback time of 9 years 1 month.

Does the payback include panel degradation?

Yes, the payback time does, because the calculator works year by year and reduces production by the panel output loss each year. The pre-filled loss is 0.5 % a year, the median of field measurements in the NREL review by Jordan and Kurtz (2013). A newer NREL study of U.S. fleet data found a median of 0.75 % a year, so you can enter a different figure, such as your panel warranty value.

Simple payback does not include it, because it uses only year-one savings. That is why the payback time is a little longer than the simple payback when there is output loss and no price rise.

What is the break-even point for solar panels?

The break-even point is the year when cumulative savings from the panels equal the system cost. The calculator reports this as the payback time. Before that year, you have saved less than you spent; after it, the net gain is positive.

Net gain is total savings over the period minus the system cost. If the savings do not reach the cost within the years you set, the result reads “not within N years”. Running costs can also block break-even: if the yearly running cost is as large as the yearly savings, the system never pays back.

Worked examples

InputResult
cost 15000, 6 kW, 4.5 sun hours, 0.1831 per kWhpayback 10 years 4 months, 8,136 kWh in year 1
cost 10000, 6000 kWh a year, 0.1831 per kWhpayback 9 years 1 month, 6,000 kWh in year 1
cost 18000, 6 kW, 4.5 sun hours, 0.25 per kWhpayback 8 years 1 month, 8,136 kWh in year 1
cost 7500, 3000 W, 5 sun hours, 0.1831 per kWhpayback 9 years 3 months, 4,520 kWh in year 1

Calculated by the tool above with these values.

Frequently asked questions

Should I enter the system cost before or after a rebate?

Enter the cost after any rebate or tax credit you will actually receive. The calculator does not know about incentives and does not calculate them, so it uses the figure you type.

What value should I use for peak sun hours?

Use the daily average of full-sun-equivalent hours for your location, from a solar resource map such as NREL’s. The 4.5 hours shown is only an example. The calculator warns you if the value is below 2 or above 8, because those values are unusual.

Is my data sent to a server?

No. The calculator runs entirely in your browser, nothing is uploaded, and no sign-up is needed.

Why is my payback time longer than the simple payback?

Simple payback uses only year-one savings. The year-by-year calculation includes the yearly loss of panel output, which lowers savings over time, so the payback time can be longer. A yearly electricity price rise works the other way and shortens it. A yearly electricity price rise works the other way and shortens it.

Can I use the results in a quote or proposal?

Yes. Results, charts and printouts can be used freely in commercial work such as quotes, proposals, reports and service records, and no attribution is needed.

Sources