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Solar Panel Calculator · Cost, Savings and Payback Period

Putting solar panels on your roof is one of the largest home upgrades you can make, and the numbers changed in 2026. The 30% federal residential clean energy credit, which for years cut the price of a home system by almost a third, no longer applies to systems paid for after December 31, 2025. Quotes you see today are therefore not reduced by that credit, and the question every buyer asks, how long until it pays for itself, has a longer answer than it did a year ago.
This calculator estimates it from your own bill. It converts your monthly electric bill and your price per kilowatt-hour into the energy you use in a year, sizes a system to cover the share you choose, and prices it with a cost per watt. Each year the panels lose a little output while the electricity they replace gets more expensive, and the calculator follows both effects to show your first-year savings, the payback period, your total savings over the life of the system and the return on your investment.
The result depends on three things you should adjust to your home: the sun at your location (the yearly output per kilowatt of panels, from about 1,100 kWh in cloudy regions to 1,700 in the Southwest), the price in your installer quotes and any state, utility or local rebate that still applies, which you enter as a dollar amount. The calculator values the energy you produce at the retail rate, which fits full net metering. If your utility pays less than retail for energy you send to the grid, or charges fixed fees that solar does not remove, your real savings will be lower, so treat the figures as an estimate and compare it with written quotes.
Standard: 150
On your bill: total charges ÷ kWh used. The US residential average is about 17¢
Most utilities do not pay full retail for energy above your use, so 100% or less is safest
About 1,100 in cloudy regions to 1,700 in the Southwest; NREL PVWatts gives your exact value
Before incentives. Check it against your quotes
State, utility or local rebates. The 30% federal credit ended for 2026 purchases
Standard: 3
Standard: 0.5
Panels typically carry a 25-year warranty
Sun Level:
Share to Cover:

Detailed Breakdown

9 metrics
PRIMARY RESULT
$38,675.59
Net Savings Over 25 Years
Payback Period
11.1 years
Recommended System Size
7.56 kW
System Cost Before Incentives
$22,689.08
Upfront Cost After Incentives
$22,689.08
First-Year Savings
$1,800.00
Total Savings Over 25 Years
$61,364.66
Return on Investment (25 Years)
170.46%
Electric Bill You Still Pay in Year 1
$0.00

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Calculation Formula

Standard Method

Yearly Use (kWh) = Monthly Bill ÷ Electricity Rate × 12 Target Production = Yearly Use × Share to Cover System Size (kW) = Target Production ÷ Yearly Output per kW System Cost = System Size × 1,000 × Cost per Watt Upfront Cost After Incentives = System Cost − Incentives Savings in Year n = Target Production × (1 − Output Loss)^(n−1) × Rate × (1 + Price Increase)^(n−1) Payback Period = the point where the running total of savings equals the upfront cost (interpolated within the year) Net Savings = Total Savings − Upfront Cost After Incentives Return on Investment = Net Savings ÷ Upfront Cost After Incentives The federal credit under IRC § 25D is not included because it does not apply to expenditures made after December 31, 2025. The estimate does not include financing costs, roof or panel replacement, battery storage, maintenance, or changes in your own electricity use.

Benchmark Example:
A home with a $150 monthly electric bill at 17¢ per kWh, panels that produce 1,400 kWh per kW each year, an installed cost of $3.00 per watt, electricity prices rising 3% a year and panels losing 0.5% of output a year: • Yearly use: $150 ÷ $0.17 × 12 = 10,588 kWh • Recommended system size: 10,588 ÷ 1,400 = 7.56 kW • System cost: 7.56 kW × 1,000 × $3.00 = $22,689.08 (no federal credit) • First-year savings: $1,800.00, the whole bill • Payback period: about 11.1 years • Total savings over 25 years: $61,364.66 • Net savings: $61,364.66 − $22,689.08 = $38,675.59, a 170.5% return With a $5,000 state rebate the upfront cost falls to $17,689.08 and the payback to about 8.9 years. In a cloudy region producing only 1,100 kWh per kW the same bill needs a 9.63 kW system costing $28,877.01 and takes about 13.7 years to pay back.

In-Depth Guide

How Much Down Payment Do You Really Need in 2026? 3%, 5%, 10% or 20%

You do not need 20% down to buy a home, but the amount you choose changes your monthly payment by hundreds of dollars. See the real 2026 numbers for 3%, 5%, 10%, and 20% down on a $350,000 home.

Read Guide

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When to Use This Calculator

Everyday financial situations where this tool gives you fast, accurate clarity:

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Check If Solar Is Worth It

See the payback period and total savings for your own bill before asking for quotes.

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Compare Installer Quotes

Enter each quote as cost per watt and compare the payback and the return on investment.

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Add a State or Utility Rebate

Enter any rebate that still applies and see how many years it takes off the payback.

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Test Different Sun Levels

Switch between low, average and high sun to see how much your location changes the result.

Frequently Asked Questions

6 answers

Applicable Laws & Regulatory Standards

Internal Revenue Service & Federal Trade Commission

Official Legal Reference
Internal Revenue Code § 25D (Residential Clean Energy Credit), as amended by Pub. L. 119-21 (2025); Instructions for IRS Form 5695

The 30% credit for solar electric systems no longer applies to expenditures made after December 31, 2025, so a system bought in 2026 or later gets no federal credit; unused credit from earlier years can still be carried forward on Form 5695.

Truth in Lending Act — 15 U.S.C. § 1601 et seq. (Regulation Z, 12 CFR Part 1026)

Requires lenders, including solar loan providers, to disclose the APR, finance charge and total of payments, so a financed system can be compared with paying cash.

FTC Act § 5 — 15 U.S.C. § 45 (Unfair or Deceptive Acts or Practices)

Prohibits deceptive claims by solar sellers, such as promising savings or incentives that are not available, and underlies the FTC guidance on comparing solar quotes.

Legal citations and statutes are provided for consumer transparency, analytical validation, and educational reference under U.S. consumer financial regulations. This tool is not a substitute for formal legal, accounting, or tax counsel.

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