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Solar Panel Savings & Payback Calculator

Enter your average monthly electric bill and your state. Adjust the system size and installed price per watt to see estimated yearly production, savings and how many years it takes to pay back.

Updated 2026-11-11 · Free, no sign-up · Works on phone

Average monthly electric bill ($)

Your state (electricity price)

System size (kW)Typical US homes: 5–10 kW.

Peak sun hours per dayAbout 3.5 (cloudy north) to 6+ (Southwest).

Installed cost per watt ($)

Incentives / rebates (%)State or utility rebates, if any.

Yearly electricity price increase (%)

Value of extra power sent to grid (%)100% = full net metering; lower if your utility pays less for exports.

How the solar estimate works

Yearly production (kWh) = system size (kW) × peak sun hours × 365 × 0.80
Yearly use (kWh) = monthly bill ÷ price per kWh × 12
First-year savings = power you use yourself × price + extra power × export value
Payback = years until total savings ≥ system cost

The 0.80 factor covers real-world losses from the inverter, wiring, heat and dust. Each later year the savings grow with electricity prices and shrink slightly as panels age.

Important: federal tax credit

The 30% federal Residential Clean Energy Credit applied to systems installed through December 31, 2025. Under current law it does not apply to home systems placed in service after that date, so the incentive field starts at 0%. Check the IRS page and any state or utility rebates for your area.

What affects solar payback?

Your electricity price. Solar pays off fastest in high-price states.
Sunshine. Arizona or Nevada roofs produce far more than roofs in cloudy northern states.
Net metering rules. Some utilities credit exported power at the full retail price; others pay much less, which lowers savings.
Installed price. Get at least three quotes and compare the price per watt.
Shade and roof direction. South-facing, unshaded roofs are best in the US.

Not sure about your rate? See electricity rates by state.

Frequently asked questions

How long does it take for solar panels to pay for themselves?

Many US homes see payback in roughly 7–15 years, depending mostly on electricity prices, sunshine, installed cost and how the utility credits exported power.

What size solar system do I need?

Divide your yearly use (kWh) by (peak sun hours × 365 × 0.8). A home using 10,800 kWh a year with 4.5 sun hours needs about 7.3 kW.

Is the federal solar tax credit still available?

Under current law, the 30% Residential Clean Energy Credit covered systems installed through December 31, 2025, and does not apply to homeowner systems installed after that. Always check the IRS website for the latest rules.

What are peak sun hours?

Peak sun hours are the number of hours per day when sunlight averages 1,000 watts per square meter. Most of the US gets about 3.5 to 6 peak sun hours.

Sources

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