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Solar Payback Calculator

How many years a home solar system takes to earn back its cost, at your state's electricity rate. EIA rates for August 2026.

Override with the exact figure from your bill for a better estimate.
A typical US home installs 6 to 9 kW.
Before incentives. US average runs $2.75 to $3.50.
About 3.5 in the Northeast, 5.5 in the Southwest.
The 30% federal credit ended for home systems installed after 2025. Enter any state or utility incentive.
US residential prices rose about 3.0% a year from 2001 to 2025 (EIA).
Exported surplus is usually credited below retail rate.
Payback period
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Net system cost
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Year 1 saving
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Annual output
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25-year net benefit
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How payback is calculated

The model runs year by year rather than using a flat average, because two things compound in opposite directions:

Annual output is estimated as system size × peak sun hours × 365, reduced by a 14% system derate for inverter losses, wiring, soiling and heat. That derate is the industry-standard assumption and the single biggest reason naive estimates come out too optimistic.

The "share of output you use" field matters more than most people expect. Power you consume as it is generated offsets electricity at the full retail rate. Surplus you export is usually credited at a lower rate, and in states that have moved away from full net metering, considerably lower. This calculator assumes exported power is credited at 40% of the retail rate — an assumption, not a national figure. If your utility still offers full net metering, set the share you use to 100%.

Defaults: no federal tax credit, because the 30% residential credit ended for systems installed after December 31, 2025 (IRS); a 2.5% yearly rate rise; 0.5% yearly panel degradation; and the 14% derate above.

This is an estimate, not a quote. Real payback depends on your roof orientation and shading, your utility's net-metering terms, state and local incentives, and the actual price you are quoted. Treat it as a screening tool for whether solar is worth investigating where you live.