Commercial & small business

Commercial solar ROI calculator

See your total and annualized return on investment over any holding period, from 5 to 30 years. Built from your net system cost and expected electricity savings.

Your numbers

1 Project details Optional
Shown on your exported report. Leave blank to skip.
2 Your system
From your installer's proposal, or use the system size by square footage tool.
US commercial systems typically run $1.10 to $1.80 per watt before incentives.
Check NREL's PVWatts for your exact address.
Accounts for inverter loss, wiring loss, dust, and temperature derate combined.
3 Costs, rates, and holding period
Your blended commercial rate, from a recent utility bill.
US and Canadian utility rates typically rise 2% to 4% a year.
How long you plan to own the system and count its savings.
Cleaning, monitoring, and inverter service. Leave blank if unsure.
A flat rebate amount, if your state or utility offers one.
4 Incentives
Check the commercial ITC calculator if you're unsure which bracket applies.

How it works

Three steps to an ROI number

Step 1

Start from your net cost

Run your system through the payback calculator first if you haven't already, since it shares the same net cost figure this tool uses.

Step 2

Pick a realistic holding period

25 years matches most panel warranties and is the standard comparison point. Use a shorter period if you expect to sell the property or relocate the business sooner.

Step 3

Compare against the NPV and IRR

Simple ROI ignores the time value of money. Once you have a number here, check the NPV calculator and IRR calculator for a more precise view of the same investment.

Understanding your ROI number

What total ROI and annualized ROI each tell you

Total ROI is your net profit divided by what you spent, expressed as a percentage. A 150 kW system with a $163,000 net cost that returns $601,000 in net profit over 25 years has a total ROI of about 369%. Dividing that by 25 years gives an annualized ROI of roughly 14.8%, a more useful number for comparing against other investments on a per-year basis. The Department of Energy's guide to going solar covers the underlying cost and savings factors this ROI figure is built from.

Why solar ROI tends to beat a lot of alternatives

Commercial solar's annualized return commonly lands between 12% and 16%, ahead of the S&P 500's long-run average, which NYU Stern's historical returns dataset puts at roughly 10% annually with dividends reinvested since 1928. Unlike market investments, the return comes from a fixed, known input, your own electricity bill, rather than broader market performance. The payback calculator shows the same numbers from a break-even angle instead of a return angle.

Why your holding period changes the answer so much

Almost all of a solar system's cost lands upfront in year one, while savings accumulate every year after that. A 10-year ROI only captures part of a system's typical 25 to 30 year working life, so total ROI keeps rising with a longer holding period even as the annualized figure levels off. Pick a period that matches how long you actually plan to own or occupy the building, and check the 25-year lifetime savings calculator in our savings and payback section for the same math applied at a residential scale.

What this tool leaves out

This calculator doesn't include MACRS or bonus depreciation, since those depend on your business's specific tax situation. It also doesn't discount future savings back to today's dollars, which the NPV calculator does account for. For a full lifetime cost picture instead of a return figure, see the 25-year TCO calculator, or the rebate plus ITC combined calculator in our rebates and incentives section to sharpen the upfront cost figure this ROI is based on.

What to do with this number next

Take your ROI figure to the IRR calculator to see the equivalent compounding annual rate, which is the number most finance teams actually use to compare projects against a hurdle rate. Incentives change the budget a lot. The rebate stacking tool in our Rebates & Incentives section can help you estimate the federal credit and rebates before you commit.

Questions If demand charges are a big part of your bill, the battery storage size calculator in our Battery & Storage section can show whether a battery would shave your peak enough to pay for itself.

Frequently asked

Most commercial systems return 250% to 400% over 25 years, or roughly 12% to 16% annualized. A 150 kW system with a $163,000 net cost after incentives, saving $22,000 in year one with 2.5% annual rate escalation, returns about 369% over 25 years, or roughly 14.8% a year.

Total ROI is your full net profit over the holding period, divided by what you spent. Annualized ROI divides that same percentage by the number of years, giving a simple per-year comparison point against other investments like a savings account or the stock market.

On an annualized basis, commercial solar often lands in the 12% to 16% range, which compares favorably to the S&P 500's long-run average of roughly 10%. Unlike stock returns, solar savings are also largely predictable once the system is installed, since they depend mainly on utility rates rather than market swings.

Most of a solar system's cost lands in year one, while the savings accumulate every year after. A 10-year ROI captures only part of the panels' typical 25 to 30 year working life, so total ROI keeps climbing the longer you hold the system, even as annualized ROI levels off.

Related tools

Keep evaluating this system

Commercial solar payback calculator Commercial solar NPV calculator Commercial solar IRR calculator Commercial solar 25-year TCO calculator Commercial ITC calculator MACRS depreciation schedule calculator Solar vs. grid-only, 10-year comparison All commercial tools