Solar Panel Calculator

Divide the system's cost after incentives by what it saves each year. Savings are the kWh it makes times your electric rate, minus upkeep. The example saves $1,618 in year one on a $24,000 system. Because power prices rise and panels wear slowly, the calculator runs it year by year and finds a payback of 12.6 years.

Many US homes pay about $2.50 to $3.50 a watt before incentives, or $20,000 to $28,000 for an 8 kW system. Prices vary by state, roof type, panel brand and installer. Get at least three quotes, and compare them by cost per watt.

Each kW of panels typically makes 1,000 to 1,700 kWh a year in the US, depending on sun, roof angle and shade. The example uses 1,300. NREL's free PVWatts tool can estimate your own address. Panels also lose about 0.25% to 0.8% of output a year as they age.

The 30% residential clean energy credit for homeowners who buy their system ended for systems installed after December 31, 2025. Leased systems and power purchase agreements are handled differently, because the installer owns the panels. Some states and utilities still offer rebates or credits. Check current rules with a tax professional.

Compare the yearly return with what you'd earn by investing the same money elsewhere. The example returns 7.0% a year over 25 years. At $0.30 a kWh, it's 14.1%. Below about 4% a year, as at $0.12 a kWh with no incentive, a high-yield savings account or bond may do about as well with less risk.

Studies have found owned systems often add value, but buyers usually pay less than the system cost, and leased systems can complicate a sale. If you may sell within the payback period, consider only the savings you'll get before you move.

Panels often carry 25-year performance warranties and can last 30 years or more. Inverters usually last 10 to 15 years and cost $1,500 to $3,000 to replace. Spread that cost over the years in the upkeep figure. The example's $150 a year covers cleaning, monitoring and a future inverter.

Buying with cash usually gives the highest long-term return. A loan adds interest, so add the loan payment to your costs and compare it with your savings each month. A lease or power purchase agreement costs nothing up front, but the company keeps the savings above your monthly payment, and contracts often run 20 to 25 years.

Net metering credits you for power you send to the grid. Under full net metering, each kWh is worth your full rate. Many states now pay less for exported power, such as California's net billing. If your utility pays less, use a lower rate above, between what you pay and what they pay for exports.

The example saves about $135 a month in year one, rising each year with power prices. Your savings depend on your rate, sun, system size and how much power you use at home versus send to the grid. Use your own bill's rate per kWh, including delivery charges.