Solar Panel Payback Calculator

The residential Section 25D credit is not available for expenditures made after December 31, 2025 under current federal law. For a new 2026 solar project, set the calculator's federal tax credit percentage to 0 unless a tax professional confirms a transition rule applies. The calculator's default percentage is an editable assumption, not a current-law determination.

Net metering decides how a utility credits electricity exported to the grid, so it can materially change payback. Set the calculator's export-credit input from your current utility tariff. Export value can differ from the retail price and may vary by time, season, customer class, or program enrollment.

Tier 1 monocrystalline panels from manufacturers like REC, Q CELLS, LG, Panasonic, and SunPower lose about 0.4 to 0.55 percent of rated output per year, with most warranties guaranteeing at least 84 to 92 percent of nameplate power at year 25. SunPower Maxeon premium panels carry the best published curve at roughly 0.25 percent per year and 92 percent year-25 output. At the 0.5 percent default in this calculator, a 6 kW system that started at 9,000 kWh per year drops to about 7,980 kWh by year 25, which is 88.7 percent of original output. Older polycrystalline panels and cheaper Tier 2 brands sometimes degrade 0.7 to 1.0 percent per year, so check the manufacturer's warranty curve before treating the 0.5 percent default as a given.

Production per installed kW depends on peak sun hours and weather, both of which differ sharply across the US. Phoenix and the Mojave Desert deliver about 1,700 to 1,900 kWh per installed kW per year. Southern California, Arizona, New Mexico, and West Texas land in the 1,500 to 1,700 range. Most of the South and the Mountain West fall between 1,300 and 1,500. The Northeast and Midwest average 1,150 to 1,350. Seattle, Portland, and the rest of the Pacific Northwest typically produce 1,000 to 1,200 kWh per kW. NREL's PVWatts calculator (pvwatts.nrel.gov) gives a free address-specific estimate that also accounts for roof tilt, azimuth, and shading, so use it to lock in your annualKwhProduction input before running payback math.

State rebates, tax credits, renewable-energy-credit programs, and utility tariffs change often and can have funding caps. Use DSIRE, your state energy office, and your utility's current program page to identify active incentives. This calculator's rebate field captures a lump-sum amount only; add recurring production credits separately after verifying eligibility and payment terms.