Enter the annual energy generation (kWh), the annual price of electricity ($/kWh), and the cost of solar panels ($) into the Return on Solar Panels Calculator. The calculator will evaluate and display the Return on Solar Panels. 

Return on Solar Panels Formula

The following formula is used to calculate the Return on Solar Panels. 

ROSP = E*CE / CSP * 100
  • Where ROSP is the Return on Solar Panels (%/year)
  • E is the annual energy generation (kWh) 
  • CE is the annual price of electricity ($/kWh) 
  • CSP is the cost of solar panels ($) 

How to Calculate Return on Solar Panels?

The following example problems outline how to calculate Return on Solar Panels.

Example Problem #1

  1. First, determine the annual energy generation (kWh).
    • The annual energy generation (kWh) is calculated to be : 1500.
  2. Next, determine the annual price of electricity ($/kWh).
    • The annual price of electricity ($/kWh) is measured to be: 1.25.
  3. Next, determine the cost of solar panels ($).
    • The cost of solar panels ($) is found to be: 20,000.
  4. Finally, calculate the Return on Solar Panels using the formula above: 

ROSP = E*CE / CSP * 100

The values given above are inserted into the equation below and the solution is calculated:

ROSP = 1500*1.25 / 20,000 * 100 = 9.375 (%/year)

FAQ

What factors can affect the return on investment (ROI) for solar panels?

The ROI for solar panels can be influenced by several factors including the cost of the solar panels, the efficiency of the solar panels, the amount of sunlight the location receives, electricity rates, and any available government incentives or rebates.

How long does it typically take to see a return on investment from solar panels?

The payback period for solar panels can vary widely depending on the initial installation costs, the cost of electricity in the area, and the amount of sunlight the solar panels receive. On average, it can take anywhere from 5 to 15 years to see a return on investment.

Are there any maintenance costs associated with solar panels?

Yes, while solar panels generally require minimal maintenance, there are some associated costs. These can include cleaning the panels to maintain efficiency, repairing or replacing inverters, and occasionally replacing batteries if the system includes battery storage. However, these costs are relatively low compared to the savings on electricity bills.