Solar ROI Calculator
Calculate return on investment and levelised cost of energy for a solar system.
Please note: Estimates for planning only. Actual solar output depends on your latitude, roof orientation, shading, weather and equipment. Get a site-specific assessment and quotes before committing.
What the Solar ROI Calculator does
Solar ROI compares lifetime savings against net cost, but the more useful figure is levelised cost of energy — the discounted cost per kWh the system produces. If that lands below your grid tariff, generating is cheaper than buying regardless of how the headline ROI reads.
Formula
Net cost = System cost − IncentivesLifetime savings = Σ (Generation × Rate, both compounded) − MaintenanceROI = (Lifetime savings − Net cost) ÷ Net cost × 100LCOE = Discounted lifetime cost ÷ Discounted lifetime kWh
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Total system cost | selected currency | Yes | Accepts more than 0. |
| Rebates and tax credits | selected currency | Optional | Accepts 0 or more. |
| Annual generation | kWh | Yes | Accepts more than 0. |
| Average value per kWh | selected currency | Yes | Weighted across self-consumed and exported energy. Accepts more than 0. |
| Annual electricity price rise | % | Yes | — |
| Annual panel degradation | % | Yes | — |
| System lifespan | years | Yes | Accepts 1 or more, up to 40. |
| Annual maintenance | selected currency | Optional | Accepts 0 or more. |
| Discount rate | % | Yes | For levelised cost — your cost of capital. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Total system cost, Annual generation, Average value per kWh and Annual electricity price rise and 3 more.
- Optionally add Rebates and tax credits and Annual maintenance.
- Select Calculate.
Worked example
A $14,000 system, $4,000 incentives, 7,884 kWh a year at $0.16, 4% inflation, 25 years.
- Cost
- 14000
- Incentives
- 4000
- Generation
- 7884
- Rate
- 0.16
- Years
- 25
Lifetime savings of $49,002 on a $10,000 net cost — 390% ROI, a 15.24% IRR, and an LCOE of $0.0853/kWh against a $0.16 grid rate.
Frequently asked questions
What is LCOE?
Levelised cost of energy: total discounted lifetime cost divided by total discounted lifetime output. It gives a true per-kWh cost you can compare directly against a grid tariff.
Why is ROI so high compared with other investments?
Because the savings run for 25 years and rise with electricity prices. The IRR figure is the fairer comparison against other investments.