Solar ROI Calculator

Calculating Your Solar Return on Investment

Installing a solar PV system is a long-term investment. The payback period and ROI depend on system cost, electricity tariff, annual generation, feed-in tariffs (if any), and maintenance costs. This calculator helps you decide whether solar makes financial sense for your situation.

Key Metrics

• Simple Payback Period: System Cost / Annual Savings (years)
• ROI (%): (Total Savings over Lifetime − System Cost) / System Cost × 100
• NPV (Net Present Value): Sum of discounted future savings minus upfront cost (accounts for inflation)
• LCOE (Levelised Cost of Energy): Total cost / Total lifetime energy production ($/kWh)

Practical Examples

Example: 10kW system, installation cost $8,000. Annual generation 14,000 kWh. Electricity rate $0.20/kWh. 80% self-consumption, 20% exported at $0.08/kWh.

• Annual savings from self-consumption: 11,200 kWh × $0.20 = $2,240
• Annual export earnings: 2,800 kWh × $0.08 = $224
• Total annual benefit: $2,464
• Simple payback: 8,000 / 2,464 = 3.25 years
• 25-year total savings: 25 × 2,464 − 8,000 = $53,600
• 25-year ROI: 53,600 / 8,000 = 670%

Factors to Consider

• Panel degradation: ~0.5% per year, so year-20 output ≈ 90% of year-1.
• Battery storage adds cost but increases self-consumption rate.
• Government incentives (tax credits, rebates) significantly shorten payback.