Sensitivity tool · move the assumptions
Solar payback calculator — assumptions exposed.
A 7-year payback figure on a proposal is a 25-year forecast resting on four assumptions: rate escalator, production, degradation, and compensation model. This calculator runs the year-by-year math with each input editable and the headline year visible across conservative / moderate / aggressive escalator scenarios.
Updated May 16, 2026. EIA escalator data1 + PVWatts production methodology2 re-verified the same day.
Your numbers — type them in
Payback + sensitivity
Within the plausible 7-15 year window for most US residential systems. Still worth running low/mid/high escalator scenarios — if the year shifts by more than two between conservative and aggressive assumptions, the headline number is fragile.
View 25-year savings table →
| Year | kWh | Rate | Savings | Cumulative |
|---|---|---|---|---|
| 1 | 10,900 | $0.1765 | $1,924 | $1,924 |
| 2 | 10,845.5 | $0.1836 | $1,991 | $3,915 |
| 3 | 10,791.3 | $0.1909 | $2,060 | $5,975 |
| 4 | 10,737.3 | $0.1985 | $2,132 | $8,107 |
| 5 | 10,683.6 | $0.2065 | $2,206 | $10,312 |
| 6 | 10,630.2 | $0.2147 | $2,283 | $12,595 |
| 7 | 10,577.1 | $0.2233 | $2,362 | $14,957 |
| 8 | 10,524.2 | $0.2323 | $2,444 | $17,402 |
| 9 | 10,471.6 | $0.2416 | $2,529 | $19,931 |
| 10 | 10,419.2 | $0.2512 | $2,617 | $22,549 |
| 11 | 10,367.1 | $0.2613 | $2,709 | $25,257 |
| 12 | 10,315.3 | $0.2717 | $2,803 | $28,060 |
| 13 | 10,263.7 | $0.2826 | $2,900 | $30,960 |
| 14 | 10,212.4 | $0.2939 | $3,001 | $33,962 |
| 15 | 10,161.3 | $0.3056 | $3,106 | $37,067 |
| 16 | 10,110.5 | $0.3179 | $3,214 | $40,281 |
| 17 | 10,059.9 | $0.3306 | $3,326 | $43,607 |
| 18 | 10,009.6 | $0.3438 | $3,441 | $47,048 |
| 19 | 9,959.6 | $0.3576 | $3,561 | $50,609 |
| 20 | 9,909.8 | $0.3719 | $3,685 | $54,294 |
| 21 | 9,860.3 | $0.3867 | $3,813 | $58,107 |
| 22 | 9,811 | $0.4022 | $3,946 | $62,053 |
| 23 | 9,761.9 | $0.4183 | $4,083 | $66,137 |
| 24 | 9,713.1 | $0.4350 | $4,225 | $70,362 |
| 25 | 9,664.5 | $0.4524 | $4,372 | $74,735 |
What this payback can't see
Time-of-use rate design (peak vs off-peak pricing). Inverter replacement around year 12-15 ($1,500-$3,000 for string inverters; microinverters are usually warrantied longer but not free). Roof re-shingle if needed mid-life. Property-tax assessment changes (some states exempt; others assess). Fixed monthly utility charges that survive the solar offset. For the bill-floor framing see the bill-not-zero guide.
How the calculator thinks.
Each year, production = (year-1 production) × (1 − degradation)^(n−1). Each year, utility rate = (current rate) × (1 + escalator)^(n−1). Annual savings = year-n production × year-n rate × retail-value fraction. Cumulative savings is the running sum. Payback year is the first year cumulative savings cross the net cost.
The three escalator scenarios — 2.5%, 4%, 7% — bracket realistic assumptions per EIA1. The 10-year residential-rate trend has been ~2-3%/yr; recent volatility ran +7.4% YoY through Feb 2026. Proposal-typical 4%/yr lands in the middle. If the payback year moves by more than two across the three scenarios, the underlying financial case is more fragile than the headline implies.
Retail value fraction captures the compensation model in one input: 1.0 means full retail-rate net metering; lower fractions approximate net billing or avoided-cost crediting. For why this matters, see the net metering vs net billing guide.
- 1. EIA Electric Power Monthly, Table 5.6.A — Average Price of Electricity to Ultimate Customers by End-Use Sector. February 2026 residential average: 17.65 ¢/kWh, +7.4% year over year vs February 2025. 10-year residential rate trend: ~2–3% per year. Released April 23, 2026. Verified 2026-05-16. eia.gov/electricity/monthly ↩
- 2. NREL PVWatts (v8) — annual production estimator using NSRDB irradiance data with default 14% total system losses (soiling, shading, snow, mismatch, wiring, connections, light-induced degradation, nameplate rating, age, availability). Typical US residential output: 1,000–1,600 kWh/kW annually. Verified 2026-05-16. pvwatts.nrel.gov · API docs ↩
Next: The four payback mistakes — common assumption errors that move the headline year by years.
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Hi, I'm the TrueSolarCost assistant. I answer questions about how to read a residential solar proposal, what the calculators on this site compute, and what the public-data benchmarks (NREL PVWatts, EIA, IRS, LBNL, DOE, DSIRE) mean for the numbers in your quote. I'm not a tax professional, CPA, structural engineer, or licensed installer — for tax-position decisions talk to a CPA, for roof-condition or structural questions talk to a roofer or engineer, for utility-rate or interconnection specifics talk to your utility.