Solar Panel Payback Calculator
Calculate the payback period for a solar panel system, based on installation cost, annual electricity production and electricity price.
How to use the solar panel payback calculator
- Enter the total installation cost of the solar panel system (after any incentives).
- Enter expected annual electricity production in kWh — your installer can give an estimate based on roof orientation, angle and system size.
- Enter the electricity price you expect to pay (or save) per kWh.
- The payback period and savings update automatically.
How is the payback period calculated?
The payback period is simply the installation cost divided by the annual savings: payback period = investment ÷ (annual production × electricity price). This model assumes a steady, constant electricity price and production over time — in practice both will fluctuate year to year, and a solar panel system also loses some efficiency over time (typically 0.5-1% per year).
Frequently asked questions
How long do solar panels last?
Most solar panels have an expected lifespan of 25-30 years, with a gradual (but small) decline in efficiency over time. That means a system with a payback period of 10-15 years still provides many years of pure savings after the investment has been recouped.
What affects how much electricity a solar panel system produces?
Among other things, the roof's orientation and tilt angle, shading from trees or other buildings, geographic location (more sun closer to the equator), and the size of the system itself (number of panels).
Should I sell excess electricity or use it all myself?
This depends on electricity prices and any incentive programs where you live. Self-consumption is often most cost-effective since you avoid buying electricity at full price, while selling excess production gives extra income beyond what you need yourself.