Solar Panel ROI Calculator
Enter your system details to see your annual savings, payback time and 25-year return.
The default of 1,500 kWh per kW per year is an average — real production varies by location, roof and weather.
Estimates only — production varies by location, roof and weather.
A solar panel ROI calculator answers one question: is putting panels on your roof worth the money? This free tool works out how much electricity a system produces each year, how much that saves you, how long it takes to pay for itself, and what it returns over its lifetime.
How to use this solar panel ROI calculator
You need six numbers. Enter each one and the results update straight away — nothing is submitted and nothing is stored.
- Enter the system size in kilowatts and the total cost, including installation. Most home systems are between 3 kW and 10 kW.
- Enter your electricity rate per kilowatt-hour, and how much the system produces per kilowatt each year. The default of 1,500 kWh per kW per year is a rough average — change it if you have a better figure for your roof.
- Set the annual electricity price rise and the system lifetime, then read the results. Try different values to see how sensitive the answer is.
Edit any box and the results update as you type. Clearing a box hides the results until you fill it in again.
Worked example: a 5 kW system
Take a 5 kW system that costs $5,000, on a home paying $0.15 per kilowatt-hour. Keep production at the default 1,500 kWh per kW per year, the price rise at 0% and the lifetime at 25 years.
Annual production: 5 kW times 1,500 kWh per kW = 7,500 kWh a year.
Year-1 savings: those 7,500 kWh are worth 7,500 times $0.15 = $1,125, because every unit the panels produce is a unit you do not buy from the grid.
Payback time: $5,000 divided by $1,125 = 4.4 years. After about four and a half years, the system has saved as much as it cost.
Total savings over 25 years: with no price rise, every year saves the same $1,125, so 25 times $1,125 = $28,125.
Total return: ($28,125 - $5,000) divided by $5,000 times 100 = 462.5%. That is the total return over the system's whole life, not an annual rate.
What affects how much a system produces
No two roofs produce the same amount. The biggest factor is location: a roof in a sunny place gets far more hours of strong sun than the same roof somewhere cloudy, and that shows up directly in the kWh per kW figure.
Roof direction and tilt matter too. In the northern hemisphere a south-facing roof tilted towards the sun catches the most light, while a north-facing roof catches the least. East- and west-facing roofs sit in between.
Shade is the quiet killer of solar output. A chimney, a tree or a neighbouring building shading even part of a panel can cut that panel's output well beyond the shaded area, so a roof that looks sunny at noon can still disappoint if it is shaded morning or evening.
Then there is the weather: dust on the panels, high temperatures, and shorter winter days. The default of 1,500 kWh per kW per year is an average, not a promise.
What ROI means here
ROI stands for return on investment. Here it means the money a solar system saves you over its whole life, minus what the system cost, expressed as a percentage of that cost.
An ROI of 462.5% means the system returned about four and a half times its cost in savings over 25 years: it saved $28,125 on a $5,000 system, which is $23,125 more than it cost. That is a total return over the whole lifetime, not a yearly rate, so do not compare it directly with a bank interest rate.
Payback time says how quickly the system pays for itself — the sooner the better, since everything after that is pure saving. ROI says how much it returns in total over its life. Look at both numbers before you decide.
Frequently asked questions
What is solar ROI?
Solar ROI — return on investment — is the money a solar system saves you over its life, compared with what it cost. A $5,000 system that saves $28,125 over 25 years has returned $23,125 more than it cost, which the calculator shows as an ROI of 462.5%.
How long do solar panels last?
Most solar panels are built to last 25 years or more, which is why the calculator uses a 25-year lifetime by default: panels usually carry a 25-year performance warranty and keep producing for years after that, at slowly falling output.
What affects how much a system produces?
Four things matter most: where you live, the direction and tilt of your roof, how much shade falls on the panels, and the weather. A south-facing roof with no shade in a sunny place produces far more per kilowatt than a shaded, north-facing roof somewhere cloudy.
Does the electricity price rise matter?
Yes — a higher rise means bigger savings later, so the 25-year figure grows. The calculator applies the rise year by year, so each year's savings are worth more than the year before. At a 3% rise, the savings in year 25 are roughly double the year-1 savings. If prices stay flat, the total is simply the year-1 savings times the number of years.
Is this exact?
No — it is an estimate. Get a quote for your roof for real figures. The result depends on how much sun your roof gets, the real cost of the system, and what electricity prices do over the next 25 years — none of which can be known exactly in advance. Use this calculator to see whether solar is roughly worth it, then ask a local installer for a quote.