Utah solar payback calculator

What payback measures, and what it does not

One thing: the year in which the savings you have accumulated first exceed what the system cost you after incentives.

That is a useful number and a narrow one. It says nothing about whether the roof needed work first, whether you will still own the house in year nine, or whether the money would have done better somewhere else. It is a break-even date, not a verdict.

The calculation has four moving parts and each one is a place where an optimistic assumption can quietly do the work:

1. Net cost. The contract price minus incentives you have confirmed in writing that you qualify for.
2. Production. The kilowatt-hours the system makes each year, which depends on your roof, its pitch, its orientation and its shading.
3. The value of a kilowatt-hour. What you would otherwise have paid for it, escalating over time.
4. Degradation. The output the panels lose each year, which the tool applies compounding.

Get any one of them wrong in the generous direction and the payback year moves. Get three wrong and the answer is fiction.

A worked example at the default figures

The tool opens on a $24,000 system, $7,200 of credits and rebates, 10,500 kWh of annual production, 17 cents a kWh, a 3% annual rise in electricity prices and 0.5% annual panel degradation.

Net cost is $24,000 minus $7,200, which is $16,800.

Year one saves 10,500 times $0.17, which is $1,785. In every year after that, output falls by 0.5% and the price rises by 3%, so the saving grows by about 2.5% a year compounding.

Cumulative savings reach about $15,586 by the end of year eight, which is short of the $16,800 net cost, and about $17,758 by the end of year nine, which clears it. So the tool reports payback in year 9. Across the full 25 years it shows about $60,853 saved and a net gain of about $44,053 over the net cost.

Two things about that headline. It is undiscounted, so a dollar in year 25 counts the same as a dollar today, which is generous to the project. And it assumes the system is still standing and still producing in year 25, which is what the panel warranty contemplates but not what every component is warranted for.

Only count an incentive you have confirmed in writing

The incentive field is the single most dangerous input on this page, because it is the one salespeople fill in for you.

The default $7,200 is not a published entitlement. It is simply 30% of the $24,000 default cost, put there as a placeholder. Treat it as a number to replace, not as a number to accept.

Three separate cautions apply:

• Federal tax credit rules changed. Legislation enacted in 2025 altered the residential clean energy credit, including the dates on which property has to be placed in service to qualify. Read the IRS page linked below for what applies to a system placed in service in 2026 before you enter any federal figure at all. Do not take a quote's assertion about the credit as the answer.
• A tax credit is not a rebate. A nonrefundable credit reduces the tax you owe. If the credit is larger than your liability, it is not worth its face value in the year you claim it, whatever the brochure implies. Where a carryforward is permitted the value arrives later, which pushes the payback year out. A household with little or no income tax liability may get very little of it.
• State and utility programmes have caps and queues. Many are funded from a fixed pot, allocated in tranches, or restricted by equipment list or installer certification. A programme that exists is not a programme you are enrolled in.

The safe procedure is simple. Put nothing in that field that you cannot point to a written confirmation for. Run the tool once with only the confirmed amount, and once with zero. If the project only works on the optimistic version, the project depends on the incentive rather than on the electricity.

Where does the production figure have to come from?

The installer's quote for your roof, and nowhere else.

Annual output is a function of your latitude, the pitch and orientation of the roof planes, the shading from trees and neighbouring buildings, the module and inverter specified, and the losses in the wiring. Two houses on the same street can differ by 20% or more. A state or national average per kilowatt of capacity tells you nothing useful about a roof with an afternoon shade problem.

Ask for the production estimate as a number of kilowatt-hours in year one, ask what software produced it, and ask whether it is a P50 estimate, meaning the figure the modelling expects to be beaten half the time, or a more conservative one. Then compare it against your own consumption. A system sized well above your annual usage is only worth building if exported power is well paid, which brings us to the next problem.

Why the saving may be smaller than the arithmetic says

The tool assumes every kilowatt-hour produced replaces one you would otherwise have bought at the retail rate. That assumption is doing a lot of work, and in a growing number of places it is no longer true.

Under full retail net metering, exported power is credited at the same rate you pay, and the assumption holds. Under net billing or an export tariff, exports are credited at a lower wholesale or avoided-cost rate, sometimes a small fraction of retail. Under those rules the value of your system depends on how much of its output you consume as it is produced, which depends on when you are home, whether you have a battery, and whether you have shifted large loads into the middle of the day.

There is a related trap in the other direction. This tool prices savings at a flat retail rate. If you are on a tiered tariff, solar first displaces your most expensive top-tier kilowatt-hours, which makes early savings larger than a flat average suggests. If you are on time-of-use pricing with a late-afternoon peak, a west-facing array is worth more than a south-facing one of the same size.

None of this is modelled here. If your utility does not credit exports at retail, treat the figures on this page as an upper bound and ask the installer to model your actual tariff.

What this calculator does not include

• Inverter replacement. A string inverter usually needs replacing once inside a 25-year window. It is a real four-figure cost, and it lands in the middle of the payback period, not at the end.
• Roof work. If the roof needs replacing within a decade, doing it before the install is far cheaper than removing and reinstalling an array later. That cost belongs in the project, not outside it.
• Loan interest. A financed system pays back later than a cash one, and a dealer fee rolled into a low advertised rate raises the real cost. The tool prices a cash purchase.
• Maintenance, insurance and monitoring. Small individually, not zero across 25 years.
• The time value of money. Savings in year 25 are counted at face value, which flatters the total.
• Anything about resale. Whether a system adds to the sale price of a house, and whether a lease or a power purchase agreement complicates a sale, is outside this arithmetic entirely.
• Batteries. Their cost, their credits and the outage protection people often actually want are all separate.

For a leased system or a power purchase agreement, this page is the wrong tool: you are buying electricity at a contracted price with an escalator, not buying an asset, and the comparison is against your utility rate rather than against a net cost.

Common mistakes when comparing a solar quote

• Entering an incentive nobody has confirmed. The most frequent single error, and it moves the payback year directly.
• Treating a tax credit as cash in year one. It is worth what your tax liability lets you use.
• Using a brochure production figure. Your roof, not a regional average.
• Assuming retail value for every kilowatt-hour. Where exports pay below retail, the saving is smaller than shown.
• Comparing quotes on price alone. Cost per watt, the equipment specified, the production estimate, the workmanship warranty and the company's likelihood of existing in ten years are all part of the comparison.
• Ignoring the escalation assumption. The 3% default compounds for 25 years. Lower it and the payback year moves out; raise it and the project looks better without anything about the hardware changing.
• Forgetting that efficiency is cheaper. Insulation, air sealing and a smaller consumption baseline reduce the system you need to buy. The electricity cost calculator is the place to see what a kilowatt-hour you never use is worth.

What should you check before signing a solar contract?

• Get the year-one production estimate in kWh, in writing, for your specific roof
• Get written confirmation of every incentive, including who claims it and when
• Check your own tax liability against any credit before counting its face value
• Ask your utility how exported power is credited, and at what rate
• Ask what the inverter warranty covers and what a replacement costs
• Ask whether the roof has enough life left for a 25-year array
• Compare at least three quotes on cost per watt, not on monthly payment

The monthly payment is the number a salesperson will steer toward, because a financed payment can be made to look small regardless of the price. Compare on total cost and production. If a household is weighing the money against other uses, our investing section covers the comparison honestly, and the broader running-cost picture sits in our cost of living guides.

Nothing here is tax advice or a recommendation to install. Eligibility for any credit depends on your own circumstances and on the law in force when the system is placed in service. See the disclaimer.