How Do I Calculate ROI?

ROI (return on investment) is a key indicator of the financial success of going solar. At Project Solar, we are proud to share that our customers, on average, enjoy an annual ROI of 18% for a 10kW system, nearly doubling the average solar panel ROI in America. In this article, we will guide you through the process of calculating an ROI with us, empowering you with the knowledge to evaluate the financial benefits of your own solar investment.


How to Calculate ROI 

Factors to Consider With ROI

How to Calculate ROI 

To calculate your ROI with Project Solar, follow these steps:

  1. Determine the Initial Cost: Add up the cost of equipment, installation, and related expenses to find the initial investment amount.
  2. Determine Your Financial Incentives: Subtract any financial incentives, such as the federal solar tax credit and net metering credits, from the initial cost of your system.
  3. Calculate the Payback Period: Divide the initial cost (after subtracting financial incentives) by the annual energy savings. This provides the number of years it will take to recover your initial investment. If you opt for financing, the payment schedule and associated costs can be discussed with our financing partners.
  4. Calculate the Net Profit: Subtract the initial cost from the total savings generated by the solar system over its lifespan. This accounts for the amount of money you save beyond the payback period.
  5. Determine the ROI After Payback Period: Divide the net profit by the initial cost and multiply by 100. This calculation provides the ROI percentage, representing the return on your investment beyond the payback period.


Factors to Consider With ROI

When calculating your ROI with Project Solar, there are several factors to take into account:

Investment Cost

The cost of your solar system plays a vital role in determining your ROI. Lowering the overall expense of your solar panel system allows for a quicker recovery of costs and an earlier start to savings. By choosing Project Solar and taking advantage of our competitive pricing, you can significantly reduce your upfront investment. Our prices are half off the national average, ranging from $1.80 to $2.10 per watt. This means that systems 4 kW and smaller are priced at $2.10 per watt, while systems 13 kW or larger cost $1.80 per watt.

In addition to our cost-effective equipment, we provide two installation options: professional installation by our trusted partners or DIY (do-it-yourself) installation. Opting for the DIY approach can save you an additional $3,000 to $7,000, depending on the size of your system. This combination of competitive pricing and installation choices allows you to maximize your savings potential and accelerate your return on investment. With Project Solar, you can enjoy the benefits of solar energy and start saving sooner.

System Lifespan and Performance

We only use Tier 1 panels that guarantee a minimum 84% production level for 25 years. This is much better than other companies with panels that degrade as much as 50% over that same period of time. This longevity ensures your system can generate energy and savings for an extended period, contributing to a higher ROI. Regular solar panel maintenance, usually required once or twice a year, can also help improve the efficiency of your solar panels and help them last longer.

Energy Cost Savings

To estimate energy cost savings, multiply your system's energy production (in kWh) by the local utility rate (in $/kWh). Our efficient systems enable significant savings on your energy bills, leading to a faster ROI.

Incentives and Tax Credits

Government incentives like the federal solar tax credit and net metering can help reduce the initial cost of your system, accelerating your ROI. You can also earn income through Solar Renewable Energy Credits (SRECs) in states with such programs.

Financing Options

It's important to note that Project Solar financing options may come with additional costs and considerations, such as interest rates, deal fees, or payment schedules, which can affect the overall ROI calculation. By partnering with trusted lenders like Mosaic, Project Solar provides competitive interest rates.

Energy Price Escalation

As energy prices rise, solar power becomes more valuable, leading to significant monthly bill savings and improved ROI for your solar panel investment. You should factor in the anticipated energy cost escalation when calculating your savings.

Resale Value

It's important to consider the potential impact solar can have on the resale value of your home. Solar panels have been shown to increase home values by around 4% to 5% on average.

By considering the specific factors associated with Project Solar, such as competitive pricing, efficient systems, and available incentives, you can accurately calculate the ROI of your solar investment. Understanding the financial benefits empowers you to make an informed decision and embark on a sustainable journey with Project Solar. Contact us today to explore how solar can contribute to your financial success and a greener future.

Was this article helpful?
1 out of 1 found this helpful



Please sign in to leave a comment.

Articles in this section

Browse the Project Solar store.
Get a quote
See your salesman-free system pricing with our online calculator.
Chat with us
Our agents are available Mon-Fri, 9am-5pm Mountain Time.
Check out our Youtube channel
Learn more about solar.