{
  "slug": "solar-payback-itc",
  "title": "Solar Payback Calculator (with ITC)",
  "heading": "Solar Payback Period Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/solar-payback-itc",
  "summary": "Years to break even after the 30% federal solar tax credit.",
  "description": "This calculates simple payback on a solar installation after applying the federal Investment Tax Credit (30% through 2032 under current law, check for changes), plus any state or utility rebate, against your annual electric bill savings. It's a simple-payback model, not an NPV or IRR calculation — it ignores the time value of money and financing costs, but it's the number most homeowners actually want: how many years until the system has paid for itself in avoided bills. It also reports lifetime savings over a 25-year panel warranty period, net of a modest annual production degradation, so you can see the full picture beyond the breakeven point.",
  "formula": "Net cost = gross cost − (gross cost × ITC%) − rebates; payback years = net cost ÷ annual savings.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=solar-payback-itc",
  "inputs": [
    {
      "id": "grossCost",
      "label": "Gross system cost",
      "kind": "number",
      "hint": null,
      "default": 24000,
      "unit": "$",
      "min": 1000,
      "max": null
    },
    {
      "id": "itcPct",
      "label": "Federal tax credit",
      "kind": "number",
      "hint": null,
      "default": 30,
      "unit": "%",
      "min": 0,
      "max": 50
    },
    {
      "id": "rebate",
      "label": "State/utility rebate",
      "kind": "number",
      "hint": null,
      "default": 0,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "annualSavings",
      "label": "Annual electric bill savings",
      "kind": "number",
      "hint": null,
      "default": 1600,
      "unit": "$",
      "min": 50,
      "max": null
    },
    {
      "id": "degradation",
      "label": "Annual panel degradation",
      "kind": "number",
      "hint": null,
      "default": 0.5,
      "unit": "%",
      "min": 0,
      "max": 2
    },
    {
      "id": "years",
      "label": "Analysis horizon",
      "kind": "number",
      "hint": null,
      "default": 25,
      "unit": "yrs",
      "min": 5,
      "max": 30
    }
  ],
  "outputs": [
    {
      "id": "paybackYear",
      "label": "Payback period",
      "format": "number",
      "hint": null,
      "primary": true
    },
    {
      "id": "netCost",
      "label": "Net cost after incentives",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "lifetimeSavings",
      "label": "Total bill savings over horizon",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "netLifetime",
      "label": "Net profit over horizon",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "roi",
      "label": "Return on investment",
      "format": "percent",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Gross system cost: 24000 $",
      "Federal tax credit: 30 %",
      "State/utility rebate: 0 $",
      "Annual electric bill savings: 1600 $",
      "Annual panel degradation: 0.5 %",
      "Analysis horizon: 25 yrs"
    ],
    "outputs": [
      "Payback period: 11",
      "Net cost after incentives: $16,800",
      "Total bill savings over horizon: $37,690",
      "Net profit over horizon: $20,890",
      "Return on investment: 124%"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter gross system cost ($).",
      "Enter federal tax credit (%).",
      "Enter state/utility rebate ($).",
      "Enter annual electric bill savings ($).",
      "Enter annual panel degradation (%).",
      "Enter analysis horizon (yrs).",
      "Read your payback period on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "grossCost": 14500,
        "itcPct": 18,
        "rebate": 0,
        "annualSavings": 950,
        "degradation": 0.3,
        "years": 15
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "grossCost": 24000,
        "itcPct": 30,
        "rebate": 0,
        "annualSavings": 1600,
        "degradation": 0.5,
        "years": 25
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "grossCost": 38500,
        "itcPct": 48,
        "rebate": 0,
        "annualSavings": 2550,
        "degradation": 0.8,
        "years": 30
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Does the ITC apply to the full system cost?",
      "a": "Yes, the federal credit applies to the total cost including panels, inverters, labor, and battery storage if installed with or after the solar system. It's a dollar-for-dollar credit against tax owed, not a deduction, and it rolls forward if you don't have enough tax liability in one year."
    },
    {
      "q": "Is simple payback the right way to evaluate this?",
      "a": "It's the easiest to understand but ignores that a dollar saved in year 10 is worth less than a dollar today, and ignores loan interest if you're financing. If you're financing the system, compare your loan payment to your old electric bill instead — that's the real monthly cash flow test."
    },
    {
      "q": "What happens to savings after the panels degrade?",
      "a": "Most panels are warrantied to 80-85% output at year 25, meaning roughly 0.3-0.5% degradation per year. This calculator compounds that annually so year-25 savings are noticeably lower than year-1 savings, which is more realistic than a flat-savings assumption."
    },
    {
      "q": "Should I include utility rate inflation?",
      "a": "This model holds your electric rate constant, which is conservative — utility rates have risen 2-4% annually on average nationally. If you expect rate increases, your real payback will be faster than this estimate shows."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/solar-array-sizing",
    "https://www.revenuelab.fyi/toolbox/net-metering-vs-buyback",
    "https://www.revenuelab.fyi/toolbox/home-charger-payback"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Solar Payback Calculator (with ITC) (https://www.revenuelab.fyi/toolbox/solar-payback-itc)"
}