"Is solar actually worth the money?" It is the most important question you can ask — and it deserves an honest, data-driven answer. Not hype, not sales pitches, just math.
At ProGreen Solar, we believe in radical transparency about the financial case for solar. In this guide, we run the numbers using real Colorado data: actual system costs, documented electricity rates, verified production figures, and legitimate incentives. By the end, you will have a clear picture of whether solar makes financial sense for your home.
Spoiler: for most Colorado homeowners, it absolutely does.
The ROI Framework: What to Measure
To evaluate any investment, you need to compare what you put in versus what you get out. For solar, the calculation involves:
Investment (what you put in):
- Net system cost (after tax credits and incentives)
- Any financing costs (loan interest)
- Maintenance costs (minimal but real)
Returns (what you get out):
- Electricity bill savings
- Net metering credits
- Home value increase
- Protection from rate increases
- Environmental value (harder to quantify, but real)
Let us run the numbers for a typical Colorado homeowner.
Baseline: The Typical Colorado Solar Customer
Here is our baseline scenario, based on ProGreen Solar's average residential installation:
| Parameter | Value |
|---|---|
| System size | 7 kW |
| Annual production | 11,200 kWh |
| Gross system cost | $21,000 |
| Federal ITC (30%) | -$6,300 |
| Net system cost | $14,700 |
| Current electricity rate | $0.14/kWh |
| Annual rate increase | 3.5% |
| Annual electricity consumption | 10,800 kWh |
| Panel degradation rate | 0.35%/year |
Year-by-Year Savings
| Year | Solar Production | Utility Rate | Annual Savings | Cumulative Savings |
|---|---|---|---|---|
| 1 | 11,200 kWh | $0.14 | $1,512 | $1,512 |
| 2 | 11,161 kWh | $0.145 | $1,618 | $3,130 |
| 3 | 11,122 kWh | $0.150 | $1,668 | $4,798 |
| 5 | 11,044 kWh | $0.161 | $1,778 | $8,441 |
| 7 | 10,967 kWh | $0.172 | $1,886 | $12,255 |
| 10 | 10,852 kWh | $0.190 | $2,062 | $18,273 |
| 15 | 10,663 kWh | $0.226 | $2,410 | $29,197 |
| 20 | 10,478 kWh | $0.269 | $2,819 | $42,365 |
| 25 | 10,297 kWh | $0.320 | $3,295 | $58,232 |
Key takeaway: Your savings accelerate over time. As electricity rates rise 3.5 percent annually, the value of each kilowatt-hour your panels produce increases. In year one, you save $1,512. By year 25, you save $3,295 per year — from the same panels.
Payback Period
Cash purchase payback: $14,700 net cost / $1,512 first-year savings = approximately 7.2 years (simple payback). When you factor in rising rates, the actual payback is closer to 6.5 years.
After payback, every dollar of savings is pure profit. That is 18+ years of free electricity from a cash purchase.
25-Year Return on Investment
| Metric | Value |
|---|---|
| Total investment (net) | $14,700 |
| Total 25-year savings | $58,232 |
| Net profit | $43,532 |
| ROI percentage | 296% |
| Average annual return | 11.8% |
An 11.8 percent annual return outperforms the historical average of the S&P 500 (approximately 10 percent). And unlike stocks, solar returns are largely predictable — your system will produce a known amount of electricity, and utility rates will continue to rise.
Scenario Analysis: Different Situations
Scenario 2: Financed with a Solar Loan
| Parameter | Value |
|---|---|
| System cost | $21,000 |
| Loan term | 25 years at 5.5% APR |
| Monthly payment | $128 |
| Tax credit applied to principal | $6,300 (year 1) |
| Revised monthly payment | $98 |
| Current electric bill | $150 |
Monthly savings from day one: $150 (avoided bill) - $98 (loan payment) = $52/month saved
Over 25 years, the total interest paid is approximately $10,500, but total electricity savings are $58,232. Net benefit: $26,700 profit over 25 years, with $0 down.
Scenario 3: Large System with Battery
| Parameter | Value |
|---|---|
| System size | 10 kW + Tesla Powerwall |
| Gross cost | $33,000 |
| ITC (30%) | -$9,900 |
| Net cost | $23,100 |
| Annual savings (with TOU optimization) | $2,200 |
| Payback period | 8.5 years |
| 25-year savings | $78,000+ |
The battery extends the payback period by about 2 years but provides backup power during outages and time-of-use arbitrage benefits.
Scenario 4: Small System, Modest Savings
| Parameter | Value |
|---|---|
| System size | 4 kW |
| Net cost (after ITC) | $8,400 |
| Annual savings | $870 |
| Payback period | 7.5 years |
| 25-year savings | $33,000 |
Even a small system delivers strong returns. The payback period is similar because both the cost and the savings are proportionally smaller.
The Home Value Factor
Solar is one of the few home improvements that returns more than its cost. According to a widely cited study by the Lawrence Berkeley National Laboratory, solar panels increase home values by approximately $4 per watt of installed capacity.
For a 7 kW system, that is:
- Home value increase: approximately $28,000
- Net cost of the system: $14,700
- Immediate equity gain: $13,300
Even if you sell your home the day after installation, you would likely recoup your investment and then some. For a deeper analysis, read our guide on Does Solar Increase Your Home Value?.
In Colorado's competitive real estate market, solar homes sell faster and for higher prices. Buyers are willing to pay a premium for a home with locked-in low energy costs.
When Solar Is NOT Worth It
In the interest of honesty, here are situations where solar may not make financial sense:
Heavily Shaded Roof
If your roof receives fewer than 4 hours of direct sunlight per day due to tall trees or neighboring buildings, production may be too low to justify the cost. We evaluate shading during every consultation and will tell you honestly if your roof is not a good candidate.
Roof Needing Replacement
If your roof needs to be replaced within the next 5 years, replace it first. Removing and reinstalling panels during a roof replacement costs $1,500 to $3,000 and is an unnecessary expense that can be avoided with upfront planning.
Very Low Electricity Bills
If your electric bill is consistently below $50 per month, the savings from solar are smaller in absolute terms, and the payback period extends. However, even in this scenario, the 25-year ROI is typically positive.
Planning to Sell Within 2-3 Years
While solar increases home value, the transaction costs of selling (including potential appraisal challenges with solar) may reduce the net benefit for very short holding periods.
No Tax Liability
If you have zero federal income tax liability and cannot benefit from the ITC (and carrying forward the credit does not help), the economics shift. In this case, a lease or PPA may be more appropriate. See our financing comparison guide.
Solar vs. Other Investments
How does solar compare to other places you could put your money?
| Investment | Average Annual Return | Risk Level | Tax Benefits |
|---|---|---|---|
| Solar panels (cash) | 11-15% | Very low | 30% ITC + state exemptions |
| S&P 500 index fund | 10% (historical) | Moderate | Capital gains taxed |
| High-yield savings | 4-5% | Very low | Interest taxed |
| Real estate (rental) | 8-12% | Moderate | Various deductions |
| CDs | 3-4% | Very low | Interest taxed |
| Treasury bonds | 4-5% | Very low | Federal tax only |
Solar offers a compelling combination of strong returns and very low risk. Your returns are based on predictable sunshine and rising electricity rates — not market sentiment. The sun will shine on your panels every day regardless of what happens in financial markets.
The Inflation Hedge Factor
One of solar's most underappreciated benefits is its role as an inflation hedge. Electricity rates have risen every year for the past two decades, and the pace is accelerating:
- Colorado electricity rates increased 4.2% in 2024
- The national average increase was 3.8% in 2025
- Energy economists project 3-5% annual increases for the foreseeable future
When you install solar, you essentially pre-purchase 25+ years of electricity at today's prices. As rates rise, the value of your locked-in solar electricity grows. By year 15, you may be avoiding rates that are 65 percent higher than today. By year 25, rates could be more than double current levels.
This inflation protection is worth thousands of dollars over the life of your system, and it is not reflected in simple payback calculations.
The Environmental ROI
While this guide focuses on financial returns, the environmental benefits of solar are substantial and worth noting:
A 7 kW system in Colorado offsets approximately:
- 3.5 tons of CO2 per year
- 87.5 tons of CO2 over 25 years
- Equivalent to planting 2,100 trees
- Equivalent to taking 19 cars off the road for a year (each year)
If environmental impact factors into your decision-making — and for many Colorado homeowners it does — solar provides significant, measurable benefits.
Run the Numbers for Your Home
The scenarios above use averages, but your specific ROI depends on your electricity usage, roof characteristics, local utility rates, and financing choice. The only way to know your exact numbers is a personalized analysis.
Use our free solar calculator to get an instant ROI estimate for your home. Or call ProGreen Solar at (303) 484-1410 for a comprehensive, no-obligation consultation. We will show you exactly what solar costs, what it saves, and when it pays for itself — for your specific home, not hypothetical averages.
The math is clear. For most Colorado homeowners, solar is not just worth it — it is one of the best investments you can make.
