Calculators

Solar Savings Calculator (With Payback)

Estimate the solar system size you need, its cost after incentives, first-year savings and simple payback. Free, with every formula and default shown.

Updated

Defaults come from our data files (last checked October 24, 2026).

Your estimate

First-year savings

$1,800

Estimated system size
7.4 kW
Gross system cost
$26,584
Cost after incentives
$26,584
Simple payback
12.3 years
25-year savings (net of cost)
$39,912

A 7.4 kW system covering about 100% of your usage would cost roughly $26,584 after incentives and save around $1,800 in year one. Simple payback: 12.3 years.

This is an estimate, not a quote. Real results depend on your roof, shading, utility tariff, equipment and installer pricing.

How we calculate this

The calculator works in five steps. All inputs are editable, and the defaults come from our data files.

  1. Your annual usage. Monthly bill × 12 ÷ electricity rate. The default rate is the U.S. average of 17.2¢/kWh.
  2. System size. Annual usage × share to cover ÷ (peak sun hours × 365 × system efficiency). We assume a system efficiency of 76%[src], taken from NLR PVWatts default losses (inverter, wiring, heat, dirt and shading). Default sun hours (5.1 hours[src]) are the median across the largest U.S. metro areas; pick your state for a local value.
  3. Cost. System size in watts × installed cost per watt, minus the incentive percentage you enter. The default, $3.60/W[src], is Berkeley Lab’s median for homeowner-owned systems installed in 2025. Competitive marketplace quotes often come in lower: the EnergySage median was $2.57/W[src] in the first half of 2026. The federal homeowner tax credit no longer applies to systems placed in service after 2025, so the default incentive is 0%[src]; add any state or utility rebate you qualify for.
  4. Savings. Every kWh the panels produce is valued at your electricity rate, rising each year by the escalation rate. The default, 3.1%[src], is the average yearly increase in U.S. residential prices from 2015 to 2025 according to the EIA; past increases are no guarantee of future ones.
  5. Payback. The year in which cumulative savings exceed the net cost. The 25-year figure is total savings minus net cost.

How to use the result

  • Compare quotes. Divide each quote’s price by its system size in watts. If it is far above the default cost per watt, ask why.
  • Check the size. If a quote’s system is much larger than the estimate here, ask for the production estimate and the assumptions behind it.
  • Check your state’s rules. Net metering and incentives change the answer more than any other input. Start at solar by state.

Want to add storage? Use the battery size calculator. Not sure how much roof you need? Try how many solar panels.

Frequently asked questions

How accurate is this solar savings estimate?

It is a first estimate based on your bill, average sun hours and average prices. Roof orientation, shading, your exact utility tariff and the installer's price can move the real number a lot. Use it to check whether a quote is in a reasonable range, then ask installers for production estimates for your roof.

Why does my payback look longer than what installers quote?

Installer quotes often assume larger electricity price increases, include incentives you may not qualify for or count every exported kWh at the full retail rate. Check those assumptions line by line; this calculator shows ours.

Does this include net metering?

The simple model values every solar kWh at your retail rate, which matches full retail net metering. If your utility credits exports at a lower rate, real savings will be lower. Check your state page for the local rules.

Sources

  1. U.S. Distributed Solar and Storage, 2026 Data Update (Tracking the Sun), Lawrence Berkeley National Laboratory (accessed October 24, 2026)
  2. Electric Power Annual, Table 2.4 (average residential electricity prices 2015-2025), U.S. Energy Information Administration (accessed October 24, 2026)
  3. Home energy market H1 2026 highlights, EnergySage (accessed October 24, 2026)
  4. Electric Power Monthly (average retail price of electricity), U.S. Energy Information Administration (accessed October 24, 2026)
  5. PVWatts Calculator, National Laboratory of the Rockies (formerly NREL) (accessed October 24, 2026)