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Solar ROI Calculator

See your exact year-by-year return on investment for going solar.

Use our Breakeven Calculator to estimate your system cost.

What Solar ROI Actually Looks Like Over 25 Years

A 10 kW solar system generates $35,000–$60,000 in electricity savings over 25 years depending on local utility rates. After a $25,000 net cost (post 30% credit), ROI ranges from 40–140% depending on your state. Systems in California and Hawaii deliver the highest lifetime returns due to high electricity rates and strong net metering policies.

The typical solar ROI in the U.S. runs 200–400% over 25 years. That sounds impressive, but it's worth understanding what's driving it. A $14,000 net investment (after the 30% federal credit) generating $2,000/year in electricity savings yields $50,000 in cumulative savings over 25 years. Net profit after investment: $36,000. ROI: 257%. That's the math for an average homeowner in a mid-rate state.

The year-by-year table is where things get interesting. Your annual savings grow over time because electricity rates rise while your solar production cost is fixed at zero. In year 1, you might save $2,000. In year 20, that same solar system is saving you $3,500 because your utility rate has climbed from $0.15/kWh to $0.26/kWh. This is why solar ROI calculations assuming flat electricity rates consistently understate the true return.

Panel degradation is real but slow. The industry standard is 0.5% per year, which means your system produces about 88% of its original output in year 25. The quality gap between premium and budget panels is mostly in degradation rates: premium panels (LG, Panasonic, SunPower) degrade at 0.3–0.4%/year; budget panels can run 0.7–0.8%. Over 25 years, that's a 10–12% difference in total production. On a $60,000 cumulative savings estimate, that's $6,000–$7,200 at stake.

Most ROI calculations don't account for the resale value effect. Berkeley Lab research found that solar homes sell for a premium of about $4 per watt of installed capacity. A 7 kW system adds roughly $28,000 to resale value. That's separate from your electricity savings. If you sell the house in year 10, you haven't gotten the full 25-year electricity savings, but the resale premium partially compensates.

The investment comparison that usually gets made is solar vs. a stock market index fund. The S&P 500 has returned about 7% annually after inflation over long periods. Solar's guaranteed return (it's not speculation — the sun comes up every day) at 8–12% annually in high-rate states outperforms that. In low-rate states, the comparison is closer and the stock market case gets stronger.

ROI methodology based on discounted cash flow analysis. Panel degradation rates from NREL's "Photovoltaic Degradation Rates" technical report. Home value premium data from Lawrence Berkeley National Laboratory.

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