Solar Panel Savings Calculator
Estimate how much electricity your solar panels will generate versus what you currently pay, revealing your net annual savings. Use it when comparing solar quotes or deciding whether rooftop solar makes financial sense for your home.
Last updated: September 2026
Formula below · 2 sources (epa.gov, Wikipedia) · Updated Sep 2026
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About this calculator
Solar savings depend on how much energy your system generates and how much of your bill it can offset. Annual generation (kWh) = systemSize (kW) × sunHours × 365 × 0.8, where 0.8 covers inverter, wiring, temperature and soiling losses. Its value is generation × $0.17/kWh, about the 2025 US residential average electricity price (EIA). Annual savings = min(generation value, monthlyBill × 12): under typical net metering, solar can reduce your bill to (near) zero, but extra generation beyond your annual use is usually credited at a low rate or not paid at all, so savings are capped at your current annual spend. Fixed monthly connection charges, local rates, net-metering rules and panel degradation will all change real-world results.
How to use
Say you have a 7 kW system, 4.5 daily sun hours, and a $150 monthly electricity bill. Annual generation: 7 × 4.5 × 365 × 0.8 = 9,198 kWh. Generation value: 9,198 × $0.17 = $1,563.66. Current annual spend: $150 × 12 = $1,800. Annual savings = min($1,563.66, $1,800) = $1,563.66, about 87% of the bill. In a 5.5-hour region the same system would generate $1,911 of electricity, enough to cover the whole $1,800 bill.
Frequently asked questions
How many daily sun hours should I use for my solar panel calculation?
Daily sun hours (also called peak sun hours) measure the equivalent number of hours per day when sunlight intensity averages 1,000 W/m², the standard used to rate panel output. In the sunniest US regions like Arizona or Southern California, this figure is 5.5–6.5 hours; in the Pacific Northwest or New England, it may be as low as 3.5–4.0 hours. Your solar installer or the NREL PVWatts online tool can give a precise value for your exact address and roof orientation. Using an accurate local figure is one of the most important inputs for a realistic savings estimate.
What is a good payback period for a residential solar panel system?
Most financial advisors consider a solar payback period of 6–10 years to be attractive, given that quality panels carry 25-year performance warranties. With the 30% federal credit that applied to systems installed through 2025, many US homeowners achieved payback in 7–9 years; without it, paybacks are roughly 40% longer unless state incentives apply. After payback, the system generates essentially free electricity for the remaining 15+ years of its life, representing significant total savings. Short payback periods are more likely in states with high electricity rates, generous net metering, or additional state-level incentives on top of the federal credit.
Is the federal solar tax credit still available?
The federal Residential Clean Energy Credit allowed homeowners to claim 30% of a solar system's installed cost against federal income tax, but the One Big Beautiful Bill Act (July 2025) ended it for systems installed after December 31, 2025. Systems installed by the end of 2025 claim it on that year's return (unused credit carries forward). Some states — including Massachusetts, New York and South Carolina — still offer their own credits or rebates.