Enter Your System Details
⚠️ Federal ITC Expired December 31, 2025: The federal 30% residential solar tax credit (Section 25D) expired December 31, 2025 under the One Big Beautiful Bill Act. Homeowner-owned systems installed in 2026 or later do not qualify for this federal credit. If your system was fully installed on or before December 31, 2025, you may still be able to claim it on your 2025 taxes — consult a tax professional. State and utility incentives below are unaffected by this change.
Before any incentives or credits
Determines whether the 30% federal ITC applies below
Auto-calculated from system cost and installation year
Check your state's solar programs
Contact your utility for details
From your savings calculator result
US avg ~2–3% per year
Your Payback Results
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Payback Period
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Net Cost After Incentives
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25-Year Net Profit
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25-Year ROI
Break-even progress (25-year horizon)
Cumulative Savings vs. Net Cost (by year)
Full 25-Year Breakdown
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How This Calculator Works
This tool nets your system cost against any incentives you enter, then projects your annual electric savings forward for 25 years — increasing each year's savings by your selected utility rate-increase assumption — until cumulative savings equal your net cost. That crossover year is your payback period.
The formula: Net cost = System cost − Federal ITC − State rebate − Utility rebate.
Year N cumulative savings = sum of (Year 1 savings × (1 + rate increase)^(N−1)) for each year 1 through N.
Payback year = the first year N where cumulative savings ≥ net cost.
25-year ROI = (25-year total savings − net cost) ÷ net cost.
Year N cumulative savings = sum of (Year 1 savings × (1 + rate increase)^(N−1)) for each year 1 through N.
Payback year = the first year N where cumulative savings ≥ net cost.
25-year ROI = (25-year total savings − net cost) ÷ net cost.
Worked example: A $28,000 system installed in 2026 (federal ITC expired, so $0 federal credit) with a $1,000 state rebate and $1,800 in Year 1 annual savings, at a 2.5%/yr rate increase:
• Net cost: $28,000 − $0 − $1,000 = $27,000
• Cumulative savings cross $27,000 in year 13 at this savings trajectory
• 25-year total savings land around $61,000, for roughly $34,000 in net profit — an ROI around 128% for this example
Enter your own system cost, incentives, and savings figure (from the Savings Calculator) above for a result specific to your situation.
• Net cost: $28,000 − $0 − $1,000 = $27,000
• Cumulative savings cross $27,000 in year 13 at this savings trajectory
• 25-year total savings land around $61,000, for roughly $34,000 in net profit — an ROI around 128% for this example
Enter your own system cost, incentives, and savings figure (from the Savings Calculator) above for a result specific to your situation.
What this does not model: financing costs (loan interest, lease payments, or PPA escalators), inverter replacement or other maintenance costs beyond the note in the FAQ below, roof or equipment-specific derates, and changes to state or utility incentive programs after your installation date. Federal ITC eligibility is based solely on the installation year you select — see the Tax Credit Calculator for the full eligibility rules.
Sources: federal ITC expiration per IRS.gov's Residential Clean Energy Credit guidance and the One Big Beautiful Bill Act. Utility rate-increase range reflects historical U.S. average trends. Page last reviewed for accuracy August 13, 2026.
Payback Period FAQ
What is a good solar payback period?
The national average payback period is 6–12 years. States with high electricity rates and good solar incentives (California, Massachusetts, New York) often see 5–8 year paybacks. States with very low electricity rates may see 10–15 years.
How does the federal tax credit affect payback?
The federal 30% residential solar tax credit (Section 25D) expired December 31, 2025 under the One Big Beautiful Bill Act. For a system fully installed on or before that date, the credit directly reduced net system cost — on a $28,000 system that was $8,400 back at tax time, shaving 2–4 years off a typical payback period. Systems installed in 2026 or later do not qualify for this federal credit, so payback now depends only on system cost, annual savings, and any state or utility incentives. Use the Installation Year field above to see how this affects your numbers.
Why do utility rate increases matter?
When utility rates rise, the value of your solar savings grows proportionally. At 2.5%/yr your electric bill would nearly double in 28 years. Solar locks in free power, so each year of rate increases accelerates your payback.
Does solar panel degradation affect payback?
Quality panels degrade about 0.5% per year — your Year 25 output is ~88% of Year 1. This is minor and already factored into most installers' savings projections. Our savings calculator uses the derate factor for production, so your annual savings figure is realistic.
What about inverter replacement costs?
String inverters typically need replacement at year 10–15 ($1,000–$2,500). Microinverters and power optimizers last 25+ years. For simplicity our calculator doesn't include maintenance costs — factor in ~$500–$1,000 every decade for realistic projections.
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