Solar vs. investing the cash

"Does solar pay for itself?" is the wrong question — almost anything pays for itself eventually. The real question is whether buying the system beats investing the same lump sum. This tool answers that one, with both sides measured the same way.

Open the calculator →Set "Cash return (%/yr)" to your genuine opportunity cost, then read the equivalent-return tile.

The comparison, made fair

The cash side takes the system's price and grows it at your expected return, compounded, with tax on the gains. The solar side takes each year's bill savings — electricity you stop buying, plus gasoline a solar-charged EV avoids — and reinvests them at that same after-tax return. Whichever pile is bigger at your chosen horizon wins. Because avoided utility and fuel costs aren't taxed but investment gains are, the cash side clears a slightly lower after-tax bar, and the model builds that in.

Two numbers do the work:

• Equivalent return — the steady annual return solar earns on its price. Put it next to your cash assumption: if solar's equivalent return is 7% after tax and you'd realistically earn 5%, solar is the better place for that money on pure return.
• Cost of doing nothing — the escalating utility and gas bills you keep paying if you don't buy. It's the baseline both options are really competing against.

Picking a return rate you can defend

This is the input that swings the verdict most, so be honest with it. Solar savings are low-risk and bond-like: they show up whether or not the market has a good decade. Comparing them to a 10% stock-market assumption holds solar to a bar it was never trying to clear. A conservative figure — the current 10-year Treasury yield is the usual anchor — matches the risk profile. If you want to see solar lose, raising this number is how; the point is to know you did it.

Horizon and degradation

Set the analysis period to something you'll actually hold through — often the warranty length of the battery or inverter, since a major repair after that point changes the math. Panel output fades a little each year (0.5%/yr by default), and the model carries that on the solar side. The year-by-year table shades everything past your horizon, because those years are less certain.

What this comparison leaves out

Return isn't the whole story. A locked-in bill is worth something during a volatile-rate decade; an owned system moves money into the house rather than spending it; a battery keeps the lights on in an outage. The calculator has separate lenses for each of those — rate hedge, home equity, resilience — so you can weigh them without letting them muddy the core return comparison.

Compare your numbers →See How it works for the after-tax and reinvestment mechanics in full.