Solar ROI Calculator: Explaining How Homeowners Can Calculate Their Long-Term Savings and Return on Investment With Solar

The goal of any investment is to make some sort of return. Solar panels are the investment and power source of the future, but it’s no secret that they require a rather sizable upfront investment. These initially high costs lead many to wonder what kind of return they can expect, which is where a solar power ROI calculator comes in.

It’s important to note that the return from your solar panels isn’t the same as what you can expect from other investments like stocks. Solar panels give you power independence, so you don’t have to pay the local utility company for your home’s power supply.

This elimination or significant reduction in energy bills saves you a lot of money. These savings increase over time and eventually pay you back the initial investment. A good solar panel ROI calculator can help you determine how long this solar payback period is and your long-term savings.

What Are the Benefits of Going Solar?

The first and most obvious benefit of installing solar panels is independence from the utility company.  By using the sun to power your home instead of the local power company, you can significantly reduce or eliminate energy bills. Beyond energy savings, going solar is also better for the environment since it’s renewable energy. 

What Factors Should You Consider To Calculate an Accurate Solar Payback Period?

You must consider a few essential factors when breaking out the solar power ROI calculator. These include:

· Long-term performance: Like any other system, solar panels experience reduced efficiency as they age. When using a solar energy ROI calculator, it’s important to remember that your panels won’t produce the same amount of electricity each year.

· Changing utility rates: It’s not uncommon for energy rates to increase within 20 years. If these rates increase after your solar panel installation, you can expect an even greater return on your investment. 

· Your home’s energy usage: The best way to maximize your solar investment return is by enhancing your home’s energy efficiency. 

Defining the Payback Period for Solar Panels

The payback period is when your solar panels “pay you back” for your initial investment by phasing out your energy bills.  

The payback period also involves more than the money saved on energy bills. Your solar panels can further enhance your savings and investment return via the solar investment tax credit. Under this tax credit, you can claim a credit for your federal tax return worth up to 30% of your total solar installation project costs.

The Solar Payback Formula

The basic solar payback formula looks like this:

Total costs of solar panel installation project / annual cost savings from solar panel system = estimated payback period

This formula can give you an idea of how long your solar payback period will last. 

How Do I Calculate Solar ROI?

You can find several different solar returns on investment calculators online, but if you want to create your own rough estimates, follow these steps: 

1. Calculate the total cost of your solar panel project. Include labor costs, installation expenses, solar financing costs, and any rebates. 

2. Estimate how much electricity your new system will produce each month. 

3. Multiply this production by the monthly utility costs to calculate your estimated yearly savings.

Since solar panels typically have a 25-year lifespan, you’ll then multiply your estimated annual savings by 25 to see what your total savings could be. Compare this number to the total project cost you calculated in the first step to get an approximated return.

Why Can You Trust RxSun To Have the Only Truly Accurate Solar Panel Payback Calculator?

When it comes to using a solar power return on investment calculator, accuracy is essential. The more accurate the calculator is, the better idea you’ll have about what kind of return and payback period you can expect. 

At RxSun, our payback calculator can help you estimate your savings over a 25-year period. We consider all crucial factors like total energy bill reduction, project costs, possible rate changes, and more.

We know you want an accurate and easy calculator, which is why ours just asks you three questions and provides an instant savings estimate.

Is It Worth It To Invest in Solar Panels?

If you’re like most homeowners looking for a solar panel ROI calculator, you’re probably trying to determine whether it’s even worth investing in solar panels. While your total investment return and payback period will vary depending on the abovementioned factors, solar panels are usually well worth it. 

Going solar gives you independence from other power sources and saves money on your monthly utility bills. Plus, solar power is much more environmentally friendly!

Ready To Calculate Your Solar ROI?

When you’re ready to calculate your potential solar panel ROI, call RxSun at 800-607-9786! Our team will guide you through every step, from initial assessment to installation, ensuring you maximize your solar investment. Switch to cleaner energy and start saving with RxSun. Learn more today!