Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Payback period
11
Net cost after incentives
$16,800
Total bill savings over horizon
$37,690
Net profit over horizon
$20,890
Return on investment
124%
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How to use this
- 1Enter gross system cost ($).
- 2Enter federal tax credit (%).
- 3Enter state/utility rebate ($).
- 4Enter annual electric bill savings ($).
- 5Enter annual panel degradation (%).
- 6Enter analysis horizon (yrs).
- 7Read your payback period on the right — it updates as you type.
- 8Hit Share to keep the scenario or send it to someone.
About this calculator
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.
Worked example
Using the values the calculator loads with:
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
Results
- Payback period: 11
- Net cost after incentives: $16,800
- Total bill savings over horizon: $37,690
- Net profit over horizon: $20,890
- Return on investment: 124%
What each field means
Inputs
- Gross system cost ($)
- The gross system cost used in the calculation, measured in $. Starts at 24000 $ so you have a working example on load.
- Federal tax credit (%)
- The federal tax credit used in the calculation, measured in %. Starts at 30 % so you have a working example on load. Accepted range: 0–50 %.
- State/utility rebate ($)
- The state/utility rebate used in the calculation, measured in $. Starts at 0 $ so you have a working example on load.
- Annual electric bill savings ($)
- The annual electric bill savings used in the calculation, measured in $. Starts at 1600 $ so you have a working example on load.
- Annual panel degradation (%)
- The annual panel degradation used in the calculation, measured in %. Starts at 0.5 % so you have a working example on load. Accepted range: 0–2 %.
- Analysis horizon (yrs)
- The analysis horizon used in the calculation, measured in yrs. Starts at 25 yrs so you have a working example on load. Accepted range: 5–30 yrs.
Results
- Payback period
- Returned as a whole number and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Net cost after incentives
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Total bill savings over horizon
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Net profit over horizon
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Return on investment
- Returned as a percentage. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Does the ITC apply to the full system cost?
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.
Is simple payback the right way to evaluate this?
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.
What happens to savings after the panels degrade?
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.
Should I include utility rate inflation?
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.
Accuracy and 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.
Related tools
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Solar Payback Calculator (with ITC). Retrieved from https://www.revenuelab.fyi/toolbox/solar-payback-itc
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/solar-payback-itc" target="_blank" rel="noopener">Solar Payback Calculator (with ITC) — RevenueLab</a> (2026).</p>
Source: [Solar Payback Calculator (with ITC) — RevenueLab](https://www.revenuelab.fyi/toolbox/solar-payback-itc) (2026).