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Solar Savings Calculator

Estimate how much you can save by going solar. Calculate your annual production, payback period, 25-year savings, and return on investment after federal and state incentives.

Solar Savings Formula

Annual Production (kWh) = System kW × 1,460 hrs × Tilt Factor
Annual Savings ($) = Annual kWh × Rate ($/kWh)
Net Cost = Install Cost − (Install × Federal%) − State Incentive
Payback (yrs) = Net Cost / Annual Savings

1,460 hours represents the average US solar irradiance equivalent (4 peak sun hours/day × 365 days). Actual production varies by location.

How to Calculate Solar Savings

  1. 1
    Enter Your Bill & Rate
    Your monthly bill and rate help estimate how much solar production you can offset. The US average rate is around $0.13/kWh.
  2. 2
    Set System Size
    Typical residential systems range from 4–12 kW. A 7 kW system produces roughly 10,000 kWh/year in average US conditions.
  3. 3
    Add Installation Cost
    Average US installed cost is $2.50–3.50/watt. A 7 kW system costs roughly $17,500–24,500 before incentives.
  4. 4
    Apply Incentives
    The federal Investment Tax Credit (ITC) is 30% through 2032. Many states offer additional rebates and incentives on top.

Frequently Asked Questions

The federal Investment Tax Credit (ITC) allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes. There is no cap on its value. It applies to the total system cost including installation labor, inverter, mounting, and wiring. The 30% credit runs through 2032, then steps down to 26% in 2033 and 22% in 2034 under current law.

Peak sun hours vary significantly by location. Arizona and Nevada average 6–7 hours/day. California and Texas average 5–6. The Midwest averages 4–5. The Northeast averages 3.5–4.5. Seattle averages around 3. This calculator uses 4 hours/day (1,460/year) as a conservative US average — adjust system size to your local resource for accurate results.

Solar is most cost-effective when electricity bills are high. If your bill is under $50/month, the payback period may exceed 15 years. However, rising electricity rates over time improve the ROI. Solar also adds property value — studies show homes with solar sell for 3–4% more than comparable homes without solar.

Most US homeowners achieve payback in 6–12 years. After payback, the remaining system life (panels typically last 25–30 years) represents pure savings. A 7–9 year payback on a system with 30% federal credit and moderate electricity costs is considered very good.

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