Solar Savings Calculator
Work out your payback time, 25-year savings and return on investment, using your state's electricity price.
This calculator sets what a solar system costs against what it saves on electricity over 25 years. It starts from your state’s average price per kWh and the typical system price in your state. Replace either one with your own number.
Payback is the year your savings add up to what you paid. If you have a quote, type its price in. A quote beats an average every time.
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Planning estimates only. Your roof, equipment, utility rules and weather change the real numbers, so get a written quote before you buy. Data as of October 2026.
How this calculator works
Each year the tool takes the energy the system makes and lowers it by the panel degradation rate, 0.5% a year. That is the median from NREL’s review of nearly 2,000 measured rates. It then multiplies by the electricity price for that year. The price starts at today’s figure and rises 2.8% a year, which is how fast the average US residential price rose from 2014 to 2024 (from 12.5 to 16.5 cents per kWh, according to the EIA).
Yearly costs come off the savings, and if you enter an inverter replacement cost it’s charged in year 13. The tool adds up the running total, finds the year it turns positive, and works out the return (the net gain divided by what you paid) and the yearly rate of return.
What can change the answer
- Net metering. If your utility pays less for exported power than it charges you, lower the share credited at full price.
- The yearly rise in electricity prices. Try 2% and 4%. Payback moves by a year or two, and a quote that assumes a much bigger rise should make you ask why.
- Incentives. The field starts at zero because the federal homeowner credit is not available for systems placed in service after 2025. Enter any state or utility rebate you qualify for.
- Financing. Loan interest and fees aren’t included. They raise the real cost of the system.
Where the numbers come from
- EIA, Electric Power Annual, Table 2.4: the average residential price rose from 12.52 cents per kWh in 2014 to 16.48 cents in 2024.
- NREL, Photovoltaic Degradation Rates, An Analytical Review: a median of 0.5% a year.
- NASA POWER, daily data 2006–2025 at the center of each 3-digit ZIP area, data as of October 2026.
- EIA Electric Power Monthly, Table 5.6.B (average residential price, January–July 2026) and Electric Power Annual 2024, Table 2.10, data as of July 2026.
- Berkeley Lab, Tracking the Sun (public data file of 28 July 2026, installs through 2025), data as of July 2026.
Questions
How long does it take for solar panels to pay for themselves?
Run your own numbers above. Payback depends on the system price, how much sun you get and what your utility charges. It’s shorter where electricity is expensive and the sun is strong.
Is a 25-year view realistic?
Most panels carry a 25-year warranty, and the median degradation rate is low, so the panels themselves can last that long. Inverters often don’t, which is why there’s a field for an inverter replacement.
Which electricity price should I use?
The all-in price on your bill, which is the total charge divided by the kWh you used. Leave the field empty and the tool uses your state’s average.
Does this include the federal tax credit?
No. The incentive field starts at zero, because the 30% homeowner credit is not available for systems placed in service after 2025. Add any state or utility rebate you qualify for.
Why are my savings lower than the sales quote says?
Check the assumptions behind the quote. A higher yearly price rise, no degradation, or full credit for every exported kWh would each make solar look better. Set the same assumptions here and compare.
Does the calculator include batteries or time-of-use rates?
No. It treats every kWh the panels make as worth the same price. For a battery, see the Solar Battery Calculator.
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