Solar Payback Calculator
Estimate how long it takes for solar to pay itself off, then keep saving.
About
Payback period = system cost ÷ annual savings. Annual savings combine bill reduction (self-consumed kWh × retail tariff) and feed-in revenue (exported kWh × export tariff). NPV discounts future savings to today's value, accounting for tariff inflation and panel degradation.
How it works
- Enter system cost after any incentives (US §25D was sunset for 2026, so use net cost).
- Pull annual production from the solar potential calculator.
- Set self-consumption %. A typical home without battery is 30–40%; with battery 70–85%.
- Set retail and feed-in tariffs. The EU/US averages built-in are starting points — replace with your actual contract.
Frequently asked questions
What's a typical solar payback period?+
Germany (high tariff, low feed-in): 9–12 years. UK (Octopus / SEG): 7–10 years. California NEM 3.0: 8–11 years. Texas / Florida (low tariff): 12–18 years. Australia (high feed-in): 4–7 years.
Should I use IRR or simple payback?+
Simple payback for quick gut-check, IRR (and NPV) for serious investment comparison. A 7-year simple payback typically corresponds to 12–14% IRR over 25 years — competitive with most retail investments.
How does a battery change the payback?+
It usually extends payback by 2–4 years (battery cost) but improves total NPV in tariff-spread markets (Germany, UK, NEM 3.0). In flat-rate markets, batteries are typically a resilience purchase, not a financial one.
Should I include panel degradation in the calculation?+
Yes — Tier-1 panels lose ~0.4–0.5% per year. Over 25 years that's a 10–12% cumulative loss. The calculator applies this automatically. Ignoring it overstates savings by 5–6%.
What discount rate should I use for NPV?+
Match your alternative investment opportunity. 4–6% for a homeowner with mortgage opportunity, 8–10% for someone deploying cash that would otherwise be in equities. The calculator defaults to 5%.