Solar Net Metering Savings Calculator
Calculates your annual savings from net metering by comparing solar production to consumption and valuing surplus energy sold back to the grid. Best used when evaluating a new solar system's financial return.
About this calculator
Net metering credits homeowners for excess solar electricity fed into the grid, offsetting future bills. Monthly production is estimated as: Production (kWh) = (systemSize / 1000) × sunHours × 30.44. If production exceeds monthly usage, the surplus is credited at the net metering rate; the remaining consumption is offset at the retail electricity rate. Annual savings follow a two-case formula: if monthly surplus > 0, Annual Savings = [(surplus × netMeteringRate) + (monthlyUsage × electricityRate)] × 12; otherwise Annual Savings = [(systemSize/1000) × sunHours × 30.44 × electricityRate] × 12. The factor 30.44 represents the average number of days per month. Net metering rates are typically lower than retail rates, so self-consumption is always more valuable than exporting.
How to use
Consider a 6,000 W system, 5 peak sun hours/day, 800 kWh monthly usage, $0.13/kWh electricity rate, and a $0.08/kWh net metering rate. Step 1 — monthly production: (6,000/1,000) × 5 × 30.44 = 6 × 5 × 30.44 = 913.2 kWh. Step 2 — monthly surplus: 913.2 − 800 = 113.2 kWh. Since surplus > 0: Step 3 — annual savings: [(113.2 × 0.08) + (800 × 0.13)] × 12 = [9.06 + 104] × 12 = 113.06 × 12 = $1,356.72 per year.
Frequently asked questions
How does net metering work and how does it save money on electricity bills?
Net metering is a billing arrangement where your utility measures both the electricity you consume from the grid and the excess solar electricity you export to it. When your panels produce more than you use, the surplus spins your meter backwards (or adds a credit), reducing your next bill. You are effectively using the grid as a battery, storing credits when production is high and drawing them down at night or in cloudy weather. The financial value depends on whether your utility credits exports at the full retail rate or a lower wholesale rate.
What is the difference between net metering rate and retail electricity rate?
The retail electricity rate is what you pay your utility per kWh consumed — in the US, typically $0.10–$0.20/kWh. The net metering rate is what your utility credits you per kWh you export to the grid, which in many states is lower than retail — sometimes as low as the avoided-cost wholesale rate around $0.03–$0.05/kWh. This difference is why maximising self-consumption (using your own solar power directly) is financially smarter than exporting. If net metering pays full retail, a larger system that exports heavily is more attractive.
Why do peak sun hours matter when calculating net metering savings?
Peak sun hours measure the equivalent number of hours per day that solar irradiance averages 1,000 W/m², the standard test condition for panel ratings. A location with 5 peak sun hours will generate 5 kWh per day per installed kW of panels. More peak sun hours mean higher monthly production and a larger surplus available for net metering credits. The US ranges from about 3.5 hours/day in the Pacific Northwest to over 6.5 hours/day in the desert Southwest, making location the single biggest driver of solar economics.