Solar ROI Calculator 2026 — 25-Year Return & IRR
Estimate 2026 solar ROI, IRR, payback and 25-year net savings from your installed cost and year-1 savings, with rate growth and panel degradation.
Estimate scope & data quality
- SEO Quick Estimate Uses the inputs available in this calculator.
- Personalized Estimate Use your own bill and location information where this calculator supports it.
- Detailed Solar Economics NOT_COMPUTABLE here without a verified tariff, system design, quote, and eligibility record.
- Data quality
- NOT_AVAILABLE
- Result limitation
- Calculator output is not a source-complete customer result.
A tariff credit is distinct from annual savings. If a result is NOT_COMPUTABLE or CONFLICT, it must not be replaced with an estimate or treated as canonical.
How to use this calculator
- Enter your installed system cost from your quote (a typical 8 kW system is about $24,000 at $3.00/W). Do not subtract a federal credit for a 2026 install.
- Enter any state, utility or local rebates you will actually receive (leave 0 if none).
- Enter your first-year bill savings (monthly bill × 12 × bill-offset share, e.g. $150 × 12 × 0.75 = $1,350).
- Set the electricity price escalation rate and panel degradation rate (defaults: 3%/yr and 0.5%/yr).
- Read your 25-year savings, net profit, ROI, IRR and payback.
Understanding your results
Short answer: In 2026, a typical 8 kW US home solar system ($24,000 at $3.00/W) that saves about $1,470 in year one at the US-average rate (18.19¢/kWh, EIA, July 2026 year-to-date) returns roughly $50,100 over 25 years in this model: about $26,100 net, a 109% 25-year ROI and a modeled IRR near 5.9%. No federal credit is subtracted, because the homeowner solar credit ended for systems installed after Dec 31, 2025.
What changed in 2026: Until Dec 31, 2025, homeowners could claim 30% of system cost under §25D. The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) ended that credit for systems installed after 2025, so returns now depend on your installed price, your electricity rate and your state’s net-metering rules. Systems installed in 2025 are still claimed on the 2025 return. Leased and PPA systems may still carry the business credit (§48E) through 2027, priced into the contract by the owner. Source: IRS OBBB FAQs. This is not tax advice; confirm with a tax professional.
How the calculator works: Net investment = installed cost − rebates you enter. Year-1 savings grow each year by (1 + escalation) × (1 − degradation), which is about 2.5%/yr at the defaults. Total 25-year savings = the sum of years 1–25. Net profit = total savings − net investment; ROI = net profit ÷ net investment. IRR is the discount rate at which the present value of the 25 yearly savings equals the upfront cost. Payback is when cumulative savings first equal the cost.
Worked example (default inputs: 8 kW at US-average inputs): 8 kW × 4.5 sun hours × 365 × 0.82 ≈ 10,775 kWh a year; × $0.182/kWh × 0.75 bill offset ≈ $1,470 year-1 savings. Installed cost: 8 kW × $3.00/W = $24,000. Total 25-year savings ≈ $50,100 (about 34.09 × year-1 savings); net ≈ $26,100; ROI ≈ 109%; IRR ≈ 5.9%; payback ≈ 13.9 years with rate growth (16.3 years simple).
| Scenario (8 kW, $24,000, no federal credit) | Year-1 savings | Simple payback | 25-yr net savings | 25-yr ROI | IRR |
|---|---|---|---|---|---|
| Fastest-payback state (Hawaii) | $3,989 | 6.0 yrs | ~$112,000 | ~467% | ~18.7% |
| US average | $1,470 | 16.3 yrs | ~$26,100 | ~109% | ~5.9% |
| Slowest-payback state (Tennessee) | $913 | 26.3 yrs | ~$7,100 | ~30% | ~1.9% |
Assumptions: state or US residential rate from EIA (July 2026 year-to-date), state net-metering offset, 3%/yr rate escalation, 0.5%/yr degradation, no rebates, no inverter replacement or financing costs.
What IRR does and does not tell you: IRR summarizes modeled savings as a single yearly rate so you can compare quotes and financing options on the same basis. It is not a guaranteed or market return: they depend on future electricity rates, your utility’s export credits, how long you stay in the home, and maintenance such as an inverter replacement (often $1,500–$3,000 around years 10–15), which this simple model does not include.
What moves ROI the most: (1) Your installed $/W — getting three quotes often matters more than any other input. (2) Your electricity rate and net-metering rules — see your state’s figures in our state pages. (3) State and utility rebates or performance payments (check DSIRE). (4) Financing — loan interest lowers ROI; a cash purchase maximizes it.
Frequently asked questions
Direct answers for US homeowners.
Related guides
In-depth articles on sizing, costs, and energy decisions.