Solar Energy Production Calculator
Estimate how many kilowatt-hours your solar system will produce each year, accounting for efficiency losses and panel aging. Ideal for sizing a system or projecting long-term energy output before purchase.
About this calculator
Annual solar energy output depends on five interacting factors: how large your system is, how much usable sunlight your location receives, how efficiently the system converts that sunlight, and how much output declines as panels age. The formula is: Annual Production (kWh) = systemSize (kW) × peakSunHours (h/day) × 365 × systemEfficiency × (1 − degradationRate)^systemAge. Peak sun hours represent the equivalent number of hours per day at 1,000 W/m² irradiance — a location receiving 5 peak sun hours per day has roughly 5 × 365 = 1,825 effective full-sun hours per year. System efficiency (typically 0.75–0.85) captures inverter losses, wiring losses, and shading. The degradation term compounds annually, reflecting that most crystalline silicon panels lose roughly 0.5–0.7% of output per year.
How to use
Example: a 7 kW system in Phoenix (5.5 peak sun hours/day), 80% system efficiency, 0.5% annual degradation, at 5 years of age. Step 1 — base output: 7 × 5.5 × 365 = 14,052.5 kWh. Step 2 — apply efficiency: 14,052.5 × 0.80 = 11,242 kWh. Step 3 — apply degradation: (1 − 0.005)^5 = 0.995^5 ≈ 0.9752. Step 4 — final: 11,242 × 0.9752 ≈ 10,963 kWh for that year. A brand-new system at the same location would produce about 11,242 kWh in year one.
Frequently asked questions
How do peak sun hours affect annual solar energy production?
Peak sun hours measure the daily equivalent of full-strength (1,000 W/m²) sunlight at your location, typically ranging from about 3.5 hours in cloudy northern climates to over 6 hours in desert southwest regions. Doubling peak sun hours roughly doubles annual output all else equal, making location one of the biggest drivers of solar economics. You can look up your area's peak sun hours from NREL's PVWatts tool or similar solar resource maps. Even within a city, local shading, orientation, and elevation can shift the effective value by 10–20%.
What is a realistic solar panel system efficiency factor to use?
System efficiency (also called the performance ratio) accounts for all losses between raw panel output and electricity delivered to your home — including inverter conversion losses (~4–6%), wiring resistance, temperature derating, and partial shading. A well-designed modern system typically achieves 0.77–0.85. Older string inverters with shading problems can drop below 0.70, while microinverter or DC-optimizer systems in unshaded locations can exceed 0.85. Using 0.80 is a conservative but realistic default for most residential installations.
How much does solar panel degradation reduce output over 25 years?
Most tier-1 monocrystalline panels degrade at roughly 0.5% per year, meaning after 25 years they still operate at about (1 − 0.005)^25 ≈ 88% of original output. Lower-quality panels may degrade at 0.8–1.0% per year, reaching only 78–80% capacity by year 25. Manufacturers typically back this with a linear performance warranty guaranteeing at least 80% output at year 25. Degradation is gradual and barely noticeable year to year, but it compounds meaningfully over a 20–30 year system lifetime and should be factored into long-term ROI calculations.