Solar ROI Calculator

ROI is calculated as total lifetime savings minus net system cost, divided by net system cost — the percentage gain on your investment over the analysis period (default 25 years).

Net Present Value (NPV) discounts each year's savings back to today's dollars using your chosen discount rate (default 4%, which approximates a conservative long-term investment alternative). A positive NPV means solar beats your discount rate; a negative NPV means it doesn't.

We compound annual savings by your specified utility rate increase, so later-year savings reflect the higher rates we expect over time.

Solar ROI is one of the strongest cases for residential solar in 2026. After the 30% federal tax credit, a typical $25,000 system has a net cost around $17,500. With annual savings of $1,800 escalating at 3% per year, the system saves roughly $65,000 over 25 years — an ROI of nearly 270%.

Net Present Value adjusts for the time value of money. Even at a relatively aggressive 6% discount rate, most well-sized systems in moderate-to-sunny climates show a positive NPV, meaning solar beats putting the same money into a comparable risk-adjusted alternative.

The key risks to ROI are slower-than-expected utility rate increases, faster-than-expected panel degradation (rare with modern Tier 1 panels), and unforeseen maintenance (mostly inverter replacement around year 12–15). On the upside, faster rate increases or value-of-solar incentives can substantially improve actual realized returns versus projection.