Solar Savings Calculator
Enter system size, sun hours, rates and cost per watt to get annual savings, simple payback and the 25-year figure — with the honest caveats listed.
Last updated: 2026-09-15
How the calculation works
- Annual production comes from size × sun × derate — the same model as the panel output calculator.
- Self-consumed energy displaces retail purchases (the valuable part); exports earn the feed-in rate.
- Payback divides installed cost by annual savings; the 25-year figure extrapolates undiscounted.
Formula
kWh/yr = kW × PSH × 365 × derate Savings = self kWh × retail + export kWh × export rate Payback = cost ÷ annual savings
| Symbol | Meaning | Unit |
|---|---|---|
PSH | Peak sun hours | h/day |
η | System derate factor | — |
SP | Simple payback | years |
Worked example
Interpreting the result
Self-consumption is the economic lever: every kWh you use yourself is worth the full retail rate; exports often earn 20–30% of that. Battery storage shifts export to self-consumption but adds capital. The payback figure ignores rate inflation (real-world paybacks shrink as rates rise), degradation (~0.5%/yr) and inverter replacement (~year 12).
Assumptions
- Fixed rates; no escalation or degradation applied.
- No incentives, rebates or tax credits included — subtract them from installed cost for real payback.
Limitations
- Net-metering policy changes are the biggest real-world risk to export economics.
- Roof age, orientation and shading shift production; use site-specific PSH.
Frequently asked questions
What is a good solar payback period?
6–10 years is excellent and typical where rates are high and incentives exist; 12–15 years is marginal but still positive over a 25+ year system life.
Do solar panels increase home value?
Studies (e.g. Zillow/LBNL) find owned (not leased) systems add roughly the discounted value of remaining savings — typically $10–20k for a standard residential system in the US.