Solar Payback Calculator
Find how many years a solar system takes to repay its cost through lower electric bills.
Payback period (years)
11.9
- Savings in year 1
- $1,816
- Total savings over the period
- $42,778
- Net gain after cost
- $21,778
The system pays for itself in about 11.9 years.
Calculation breakdown
| Step | Formula | Result |
|---|---|---|
| Savings in year 1 | 10,000 kWh × 0.1816 per kWh | $1,816.00 |
| Total savings | Sum over 25 years, output −0.5% and price +0% each year | $42,778 |
How it works
Enter the net cost, the yearly energy the system makes and your price per kWh.
Worked example
A system costing 18,160 dollars makes 10,000 kWh a year at 0.1816 dollars per kWh, with no decline or price increase:
- Year 1 savings: 10,000 × 0.1816 = $1,816
- Payback: 18,160 ÷ 1,816 = 10 years
- Over 25 years the savings total $45,400, a net gain of $27,240
Sources
Frequently asked questions
How do you calculate solar payback?
Divide the net system cost by the yearly bill savings. If a system costs 18,160 dollars and saves 1,816 dollars a year, it pays back in 10 years.
How are yearly savings worked out?
Yearly savings are the kWh the system makes times your price per kWh. Each later year the calculator lowers the output by the yearly decline and raises the price by the yearly increase, if you enter them.
What price per kWh should I use?
Use the rate on your bill. The default is the U.S. average residential price of 18.16 cents per kWh for August 2026 from the U.S. Energy Information Administration.
Why do the decline and price increase start so low?
The 0.5% output decline is an example, and the price increase starts at 0% to stay cautious, because no official figures for either could be opened to cite. Change both to your own view.
Does payback include financing or incentives?
Only through the net cost you enter. Subtract incentives from the cost, and use the solar loan calculator to compare financing.
An estimate for information only. Future prices, weather and panel output are uncertain; this is not financial advice.