Solar Panel Savings Calculator

Enter your monthly electricity bill to calculate system size, annual savings, payback period, and 25-year ROI — with state-specific sun hours and the 30% federal tax credit.

Quick Start:

Your System Details

Monthly Electricity Bill

State

Roof Area Available (sq ft)

Electricity Rate (¢/kWh)

Annual Rate Increase (%)

Federal Tax Credit (30%)

Financing

Total System Cost

Annual Savings

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Enter your details to calculate

System Size

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Annual Production

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Net Cost

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Payback Period

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25-yr ROI

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NPV (5% disc.)

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Cumulative Savings vs. Investment Cost (25 Years)

Scenario:

Base case uses your exact inputs. Pessimistic = 15% less production, 10% higher cost. Optimistic = 15% more production, 10% lower cost.

Year	Rate (¢/kWh)	Production (kWh)	Annual Savings	Cumul. Savings	Net Position
Switch to this tab after calculating to see the full 25-year projection.

In addition to the 30% Federal ITC (through 2032), many states offer additional solar incentives. Always verify current programs at DSIRE.org.

State	Program	Benefit	Type
All States	Federal ITC (Inflation Reduction Act)	30% of system cost through 2032	Federal Tax Credit
Arizona	Residential Solar Tax Credit	25% of cost, up to $1,000	State Tax Credit
Arizona	Solar & Wind Property Tax Exemption	100% of added home value excluded	Property Tax
California	SGIP Battery Storage Rebate	Up to $200/kWh for battery storage	Utility Rebate
California	Net Energy Metering (NEM 3.0)	Export credit for excess solar	Net Metering
Colorado	Sales Tax Exemption	100% sales tax exempt on solar	Sales Tax
Florida	Solar Property Tax Exemption	100% of added home value excluded	Property Tax
Florida	Sales Tax Exemption	Solar systems exempt from 6% sales tax	Sales Tax
Illinois	Illinois Shines (P-REC)	Tradeable Renewable Energy Credits, 15-yr contract	REC Program
Maryland	Clean Energy Grant	$1,000 residential solar grant	Grant
Massachusetts	SMART Program	Fixed performance payment per kWh produced	Production Incentive
Massachusetts	State Solar Tax Credit	15% of cost, up to $1,000	State Tax Credit
Minnesota	Solar Rewards (Xcel Energy)	Performance payment per kWh	Utility Rebate
New Jersey	SuSI Program	Solar Renewable Energy Credits (SRECs)	REC Program
New York	NY-Sun Initiative	Up to $1.00/W residential incentive	Rebate
New York	State Solar Tax Credit	25% of cost, up to $5,000	State Tax Credit
Oregon	Solar + Storage Rebate Program	Up to $5,000 for solar + storage	Rebate
Pennsylvania	SREC Market	Tradeable Solar Renewable Energy Credits	REC Market
Texas	Property Tax Exemption	100% of solar value excluded from taxes	Property Tax
Washington	Sales Tax Exemption	Solar systems exempt from state sales tax	Sales Tax

Data current as of May 2026. Programs change frequently — verify at DSIRE.org before making financial decisions.

How to Use This Calculator

Enter your monthly electricity bill

Use your average monthly utility bill. We divide this by your electricity rate to estimate your monthly kWh usage.

Select your state

Each state has different peak sun hours. California averages 5.5 hrs/day while Maine gets ~4.3 hrs/day — this directly affects system size and production.

Enter your system cost and tax credit status

Get a quote from a local installer. The 30% federal ITC applies to most homeowners who owe federal taxes — it reduces your net cost to 70% of the system price.

Review your savings and payback

See your annual savings, payback period, 25-year ROI, and NPV. Switch to the 25-Year Analysis tab for a year-by-year projection.

Formulas Used

Monthly kWh = Monthly Bill ÷ Rate (¢/kWh ÷ 100)

System Size = Monthly kWh ÷ (Sun Hours × 30)

Annual Production = System kW × Sun Hours × 365 × 0.85

Annual Savings = Annual Production × Electricity Rate

Net Cost (with ITC) = System Cost × 0.70

Payback Period = Net Cost ÷ Annual Savings

NPV = Σ [Savingsᾛyᾝ ÷ 1.05⁸] − Net Cost

Key Terms

Peak Sun Hours Average daily hours of full-intensity sunlight in your location. Higher = more power generated per kW of panels.

Federal ITC Investment Tax Credit — reduces your federal tax bill by 30% of system cost (through 2032, per the Inflation Reduction Act).

Payback Period Years until cumulative electricity savings equal your net system cost. US residential average is 7–10 years.

NPV Net Present Value — today’s dollar value of 25 years of savings minus upfront cost, using a 5% discount rate.

0.85 Derate Factor Real-world efficiency adjustment accounting for wiring losses, inverter efficiency, dirt, and temperature effects (~85% of rated output).

25-yr ROI Total profit over 25 years divided by net cost, expressed as a percentage. Typical residential solar: 100–300%.

Frequently Asked Questions

How much do solar panels save per month?

Typical US homeowners save $80–$150/month with solar, depending on system size, sun hours, and electricity rates. In high-rate states like California, Massachusetts, and Hawaii, savings can exceed $200/month. Our calculator derives your savings from your actual bill and local rate, so the estimate is tailored to your situation.

What is the average solar panel payback period?

The US average payback period for residential solar is 7–10 years. Payback is shorter in high-sun states (Arizona, Nevada) and in areas with high electricity rates (California, New York). After payback, your system generates essentially free electricity for the remaining 15+ years of its 25–30 year lifespan.

How does the 30% federal solar tax credit work?

The Residential Clean Energy Credit (from the Inflation Reduction Act) lets you claim 30% of your total solar system cost as a tax credit through 2032. It’s a dollar-for-dollar reduction in your federal income tax — so a $20,000 system gets a $6,000 credit. You must owe at least that much in federal taxes; unused credits carry forward to future years.

Which states are best for solar in 2026?

The best states combine high electricity rates, strong sun hours, and state incentives. Top performers: Arizona (5.8 hrs/day + property tax exemption), California (5.5 hrs/day + NEM + SGIP), New Mexico (5.5 hrs/day + good rates), Texas (5.2 hrs/day + property tax exemption), and Nevada (5.6 hrs/day). High-rate states like Massachusetts and New York also rank well despite moderate sun hours because ROI depends on how much you pay per kWh.