A solar payback estimate compares installed cost with electricity cost a system may avoid. It is useful for comparing scenarios, not a guaranteed return.
Estimate annual generation
Annual kWh ≈ system kW × sun hours/day × 365 × performance factor
The performance factor allows for temperature, inverter, wiring and other losses.
Estimate savings and payback
Annual savings ≈ annual kWh × avoided electricity rate
Simple payback = installed cost ÷ annual savings
Simple payback = installed cost ÷ annual savings
Export credits, financing, maintenance, degradation, incentives and future tariffs can change the result.
Inputs to verify
- Installed price.
- Local solar resource.
- Electricity tariff.
- Export-credit rules.
- Shading and system performance.
Useful calculators
Important: Use current bills, tariffs, quotes and contracts for important decisions.