Solar Payback & ROI Calculator

Solar proposals

Compare up to three quotes side by side.

Proposal name

Installation cost

₱

Total installed price on the quote.

Year-one savings

₱

Per year. From the solar savings calculator or the installer’s estimate.

Maintenance / yr

₱

Cleaning, inspections, monitoring fees.

Degradation / yr

Yearly loss of panel output. Check the warranty.

Replacement in year

e.g. an inverter replacement. Use 0 for none.

Replacement cost

₱

Estimated cost in that year.

Projected results

Nominal pesos, not adjusted for inflation or the time value of money. Estimates only.

Proposal A (example)

Breakeven ≈ 4.3 years

Position after 25 years: ₱816,841

Cumulative position (₱): below the dark line you haven’t recovered your cost yet Proposal A (example)

Year-by-year cash flow table

Annual and cumulative cash flow for each proposal
Year	Proposal A (example): savings	cash flow	cumulative
1	₱42,318	₱42,318	-₱137,682
2	₱42,106	₱42,106	-₱95,576
3	₱41,896	₱41,896	-₱53,680
4	₱41,686	₱41,686	-₱11,993
5	₱41,478	₱41,478	₱29,485
6	₱41,271	₱41,271	₱70,755
7	₱41,064	₱41,064	₱111,819
8	₱40,859	₱40,859	₱152,678
9	₱40,655	₱40,655	₱193,333
10	₱40,451	₱40,451	₱233,784
11	₱40,249	₱40,249	₱274,033
12	₱40,048	₱40,048	₱314,081
13	₱39,848	₱39,848	₱353,929
14	₱39,648	₱39,648	₱393,577
15	₱39,450	₱39,450	₱433,027
16	₱39,253	₱39,253	₱472,280
17	₱39,057	₱39,057	₱511,337
18	₱38,861	₱38,861	₱550,198
19	₱38,667	₱38,667	₱588,865
20	₱38,474	₱38,474	₱627,339
21	₱38,281	₱38,281	₱665,620
22	₱38,090	₱38,090	₱703,710
23	₱37,899	₱37,899	₱741,609
24	₱37,710	₱37,710	₱779,319
25	₱37,521	₱37,521	₱816,841

How this calculator works

For each year of the calculation period:

Savings (year n)    = year-one savings × (1 − degradation)^(n−1) × (1 + price change)^(n−1)
Cash flow (year n)  = savings − annual maintenance − replacement costs that year
Cumulative (year n) = − installation cost + sum of cash flows up to year n

Breakeven is the point after which the cumulative position stays at or above zero for the rest of the period, interpolated within the year. If the position is still negative at the end, the calculator says the system does not break even within the period you chose.

Worked example

Hypothetical example (estimate). A ₱200,000 system with ₱40,000 of year-one savings:

With no degradation, maintenance or replacements, breakeven is simply 200,000 ÷ 40,000 = 5 years.
Add 0.5%/year degradation, ₱2,000/year maintenance and a ₱50,000 inverter replacement in year 12, and breakeven moves to about 5.3 years, with a 25-year position of ₱642,238 instead of ₱800,000.

These numbers are invented to show how the assumptions interact. They are not typical prices or savings.

Choosing your inputs

Year-one savings: use the solar savings calculator (its “Project 25-year payback” button carries the figure over), or the installer’s estimate — and ask how they calculated it.
Degradation: panel output declines slowly with age. Use the figure from the panel’s performance warranty if you have it.
Replacements: inverters and batteries usually have shorter warranties than panels. Ask installers what replacement would cost and when it might be needed.
Maintenance: panel cleaning, inspections, monitoring subscriptions and repairs after storms.
Electricity price change: a single average yearly change. Test several values.

Limitations of projections

Long-term projections are only as good as their assumptions. Small changes in savings, tariffs or system life change the result a lot.
Results are in nominal pesos with no discounting, financing costs, tax effects or resale value.
It assumes savings continue every year; it does not model outages, typhoon damage, moving house or changes in your usage.
Net-metering credit rules, tariff structures and regulations can change over a system’s life.

Comparing installer proposals? See how to compare solar quotes and solar panel prices and installation costs.

Frequently asked questions

What is a good payback period for solar?

There is no universal threshold. Compare the payback with how long you expect to stay in the home, the warranties on panels and inverter, and what else you could do with the money. A shorter payback is less sensitive to the many uncertainties in a 25-year projection.

Should I assume electricity prices will rise?

Nobody can reliably predict tariffs for 25 years, and monthly rates in the Philippines go down as well as up. Start with 0% and then test a few positive and negative values to see how sensitive your decision is.

Why does the chart dip in a later year?

That is the replacement cost you entered (for example, an inverter replacement) being paid in that year. If it pushes the cumulative position below zero, breakeven moves later.

Does this account for the time value of money?

No. The calculator shows nominal pesos without discounting. Money saved in year 20 is worth less to you today than money saved in year 1, so a discounted analysis would show a later breakeven.