Method
How to calculate simple payback period in years
This is simple payback, not discounted cash flow. It holds electricity prices and system performance constant.
FORMULAPayback = (system cost − incentives) ÷ estimated annual bill savings
Worked example
Solar payback calculator example
A $13,500 net system offsetting 75% of a $220 monthly bill saves an estimated $1,980 in the first modeled year.
Change one assumption at a time to see what drives the result. The output is an estimate, not a quote, forecast or recommendation.
FAQ
Solar payback calculator FAQ
Does solar payback include financing?
No. Add interest, fees and payment timing for a financed-project comparison.
What does bill offset mean?
It is the percentage of the entered bill expected to be avoided, after considering usage and applicable tariff rules.
Does the model include degradation?
No. Panel degradation, maintenance, export credits and tariff changes require a year-by-year model.