Formula
Simple payback ignores incentives, loans, and degradation:
years = installed cost / annual savings
The solar savings page prices production at a rate. This page starts from a savings figure you already believe.
Assumptions
- Savings stay the same every year.
- The cost is the installed price, with no separate incentive subtracted unless you already did that.
- No loan interest is included.
Worked example
A $12,000 system that saves $1,400 a year pays back in 8.57 years.
Input definitions
- Installed cost
- What you pay for the system, after any incentive you have already subtracted.
- Annual bill savings
- The yearly amount you type, not a production model.
Limitations
This is a planning estimate. The rate, sun hours, and losses are numbers you type. It is not a utility bill, a solar design, or a room-by-room load calculation.
Questions
Is this a return on investment?
It is a simple payback in years. It is not an internal rate of return, and it is not the property ROI page.
Where do incentives go?
Subtract them from the cost before you type it. This page does not know a local rebate.