Solar Panel Calculator

How to use this calculator

1. Enter your average monthly electric bill (a year’s total ÷ 12 is best), or switch to monthly kWh.
2. Pick your state. That sets the peak sun hours for a major city there and the state’s average electricity rate from the EIA. Choose My own numbers to use your bill’s rate and sun hours from a quote or NREL’s PVWatts.
3. Set the share of your use to cover, the panel size, the installed cost per watt and any state, local or utility incentives.
4. Under Assumptions, adjust the system efficiency, degradation and electricity price increase.

The result shows the system size, panels and payback, then first-year production and savings, the cost and the 25-year net savings. The chart shows cumulative savings climbing past the system’s cost.

The formulas

A kilowatt of panels produces about its rated power for each peak sun hour, less real-world losses:

The calculator rounds up to whole panels. Each later year, production falls by the degradation rate and your electricity rate rises by the escalation rate. Savings are the kWh produced (up to your annual use) times that year’s rate. Payback is when cumulative savings reach the net cost, and 25-year net savings are total savings minus the net cost.

The default 77% system efficiency comes from NREL’s PVWatts model with its standard settings (14% system losses, 96% inverter efficiency, a south-facing roof at 20°): in Denver it predicts 1,595 kWh per kW a year from 5.66 kWh/m²/day of sun on the panels, and 1,595 ÷ (5.66 × 365) = 0.77. Shade, a roof facing east or west, or a steep or flat roof lowers it.

Worked example

The default is a $165 monthly bill at the U.S. average rate of 18.19¢ per kWh and 4.87 peak sun hours, the median of the state values:

1. Use: $165 ÷ $0.1819 = 907 kWh a month, 10,885 kWh a year.
2. Output per kW: 4.87 × 365 × 0.77 = 1,369 kWh a year.
3. Size: 10,885 ÷ 1,369 = 7.95 kW, rounded up to 20 panels of 400 W = 8 kW.
4. Cost: 8,000 W × $3.50 = $28,000, with no federal credit.
5. First-year savings: 10,885 kWh × 18.19¢ = $1,980.
6. Payback: about 12 years 3 months. Over 25 years the system saves $67,888, or $39,888 more than it cost.

The assumptions move the answer. At $3.00 a watt, payback drops to 10 years 8 months; at $4.00, it stretches to 13 years 8 months. If electricity prices never rose, payback would take 14 years 7 months and the 25-year net savings would fall to $18,904. At 5% a year, they’d rise to $60,447.

Solar by state

For a home using 10,800 kWh a year (900 a month), with the default cost, efficiency, degradation and 3% price increases:

Expensive electricity pays back faster than strong sunshine. Massachusetts gets less sun than Nevada but pays back four years sooner, because each kWh is worth more than twice as much.

The 2026 federal tax credit change

Until the end of 2025, homeowners could claim a 30% federal tax credit (the Residential Clean Energy Credit, IRC section 25D) on the cost of a solar system. The One Big Beautiful Bill, signed July 4, 2025 (Public Law 119-21), ended it for expenditures made after December 31, 2025. The IRS’s guidance says an expenditure is made when the installation is completed, so a system finished in 2026 doesn’t qualify even if you paid for it in 2025. That’s why this calculator has no federal credit field. On the default system, the old credit would have been worth $8,400 and cut payback from about 12 years to under 9.

Leased systems and power purchase agreements work differently: the solar company owns the equipment and may claim business tax credits under separate rules. Many states, cities and utilities still offer rebates or property-tax exemptions; enter those as incentives.

Tips and interpreting your result

• Check how your utility credits solar. The calculator assumes full retail net metering: every kWh you produce, up to your annual use, is worth your full rate. Many utilities now credit power you send to the grid at a lower rate. Under California’s current net billing tariff, for example, exports earn much less than retail, so savings depend on how much solar you use as it’s produced. Ask your utility or installer.
• Your bill includes fixed charges. Customer and connection fees don’t go away with solar. If your bill has a $15 fixed charge, subtract it before entering your bill, or enter your kWh use instead.
• Compare quotes per watt. Divide each quote by the system’s DC watts. Berkeley Lab found that loan-financed systems cost a median $1.20 per watt more than cash purchases in 2024, partly because loan fees are built into the price.
• Fix the cheap stuff first. Sealing leaks and upgrading heating and cooling shrink the system you need. The electricity cost calculator shows what each appliance costs to run, and the BTU calculator sizes AC units properly.
• Re-roof first if your roof is old. Removing and reinstalling panels later is expensive. The roofing calculator estimates materials, and a home equity loan is one way to finance both.

Assumptions and limitations

• Peak sun hours are long-term averages for one major city per state, at the best fixed tilt, from the Global Solar Atlas. Within a state, sunshine varies; for your exact address, run NREL’s PVWatts and enter its result under My own numbers.
• Bill-based estimates divide your bill by the state’s average rate, which includes fixed charges and taxes spread over usage.
• Savings ignore maintenance, inverter replacement, insurance and the time value of money. Batteries aren’t included.
• Prices and rates are editable starting points dated November 2026, not quotes. This is a planning estimate, not financial or tax advice.

Sources

• IRS: Residential Clean Energy Credit
• IRS: FAQs for modification of sections 25C, 25D and others under Public Law 119-21 (One Big Beautiful Bill)
• U.S. Energy Information Administration: Electric Power Monthly, Table 5.6.B, average residential price by state, January–August 2026
• U.S. Energy Information Administration: Electric Power Monthly, Table 5.3, average price by year, 2016–2025
• NREL (now the National Laboratory of the Rockies): PVWatts Calculator
• Jordan and Kurtz, NREL: Photovoltaic Degradation Rates, An Analytical Review (PDF)
• Berkeley Lab: U.S. Distributed Solar and Storage, 2025 Data Update (Tracking the Sun, PDF)
• Global Solar Atlas (World Bank Group, ESMAP, Solargis)
• U.S. Energy Information Administration: How much electricity does an American home use?

This calculator gives planning estimates, not financial or tax advice. Get written quotes and check incentives with your state energy office or utility before you buy.

Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.