Are you looking for a way to estimate how long your savings will take to cover the upfront cost of a solar installation? Our Solar Payback Period Calculator is built to help you calculate the payback period for a solar installation based on your monthly electricity bill savings.
In this article, we will cover:
A Solar Payback Period Calculator is a tool that helps you calculate the time required to recoup your initial investment in a solar panel system through the energy savings it generates. The calculator provides the payback in years and months, and also annual saving based on your total solar installation cost and monthly energy savings.
Our calculator is quite simple — there are only two inputs that need to be filled:
As you type the required values, the calculator will instantly show you the estimated payback period and also how much you will save on your electricity bill annually.
If you want to calculate it manually — or are curious about the formula behind the scenes. Here is the following:
Payback Period (years) = Installation Cost / (Monthly Savings × 12)It shows:
Suppose you spend 15,000 dollars on a solar panel system installation, and you save an average of 200 dollars per month on your electricity bill.
Step 1: Required values
15,000 dollars200 dollars200 dollars × 12 = 2,400 dollarsStep 2: Compute values using formula
15,000 dollars / 2400 dollars6.25 yearsThis means it will pay back in about 6 years and 3 months, after which the solar‑generated electricity is essentially pure profit.
In the United States, the average payback period is between 7 and 12 years; it largely depends on local electricity costs and available state incentives.
A payback period under 6 years is considered excellent; 6-12 years is considered good to average, while anything longer than 12 years is still beneficial but considered below average due to the long recovery time. Here’s the breakdown: