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Enter your solar details and click Calculate.
⚠️ Estimates only. Actual production depends on roof orientation, shading, weather, and local conditions.
How solar panel ROI is calculated
Solar panel return on investment is fundamentally a payback-period question: how many years of saved electricity bills does it take to recover the upfront installation cost? After payback, you keep saving for the remaining 20–25 years of the panels' life.
The calculation has four moving parts: installation cost (after rebates), annual electricity production (kWh), your local electricity rate ($/kWh), and how that rate changes over time. Annual savings = production × rate. Payback = net cost ÷ annual savings, roughly.
A worked example
NZ household installs a 6 kW system for NZ$15,000 (no rebate available in NZ currently). Average 4.5 sun-hours/day yields ~9,800 kWh/year. Power costs $0.32/kWh and rises ~3% per year.
Year 1 savings: 9,800 × $0.32 = $3,136
Simple payback: $15,000 ÷ $3,136 = ~4.8 years
25-year lifetime savings (with 3%/yr rate increases, 0.5%/yr panel degradation): ~$108,000
This is a strong ROI by most investment standards — equivalent to a tax-free 18–20% annual return. But it depends heavily on your local power rates, sunshine hours, and incentives.
Country-by-country quick view
| Country | Typical 6 kW cost | Power rate | Typical payback |
|---|
| New Zealand | NZ$13–18k | $0.28–0.34/kWh | 5–7 yrs |
| Australia | AU$5–9k (after rebate) | $0.25–0.40/kWh | 3–5 yrs |
| USA | US$15–25k (before tax credit) | $0.10–0.40/kWh | 6–12 yrs |
| UK | £7–12k | £0.27–0.34/kWh | 8–12 yrs |
The 30% federal tax credit (US Inflation Reduction Act) and Australian STC scheme materially shorten payback in those countries. NZ has no current national rebate, but some councils offer interest-free loans.
Variables this calculator doesn't capture
- Roof orientation and shade. A north-facing roof (in NZ/AU; south-facing in US/UK) without shade produces 10–25% more than the average estimate.
- Battery storage. Adds NZ$10–15k but lets you use solar power at night. Typically extends payback by 4–7 years on its own — only worth it if you have time-of-use pricing or want grid resilience.
- Inverter replacement. Most systems need a new inverter around year 12–15 — budget NZ$2–4k for the replacement.
- Buyback rates. What you're paid for surplus power exported to the grid varies wildly by country and retailer. In NZ, buyback rates are typically 8–17 cents/kWh — much less than the retail rate you save.
- Self-consumption ratio. Most households consume only 30–50% of solar production directly. The rest is exported at the lower buyback rate. This calculator's results assume you can use most production.
When solar makes financial sense
- You own your home and plan to stay 5+ years
- Your roof is suitable (good orientation, minimal shade, structurally sound)
- Your daily electricity usage profile aligns with sunny hours (working from home helps)
- Your local power rates are above ~$0.20/kWh
- Available rebates, tax credits, or interest-free loans bring net cost down