Solar Panel Savings Calculator
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How Solar Savings Are Calculated
This calculator estimates solar savings based on:
- Sun hours: Varies by region from 4 (Seattle) to 7 (Arizona)
- System size: Larger systems generate more power but cost more upfront
- Electricity rate: Higher rates mean more savings from solar generation
- Federal tax credit: Currently 30% of total system cost (assumed included)
- Degradation: Panels lose ~0.5% efficiency per year
- Electricity inflation: Rates assumed to rise 3% annually
Key Solar Formulas
Annual Generation (kWh) = System Size (kW) × Sun Hours × 365 × 0.75
Annual Savings = kWh Generated × Electric Rate
Payback Period = Net Cost ÷ Annual Savings
Annual Savings = kWh Generated × Electric Rate
Payback Period = Net Cost ÷ Annual Savings
The 0.75 factor accounts for real-world conditions: panel angle, shading, inverter efficiency, and weather variability.
Frequently Asked Questions
Most solar panels come with a 25-year performance warranty. They typically produce at 85-90% of rated capacity after 25 years. Actual lifespan is often 30-40+ years with minimal degradation.
Solar is worthwhile in most US states, but payback periods vary. States with high electricity rates (CA, MA, HI, NY) and good sun have the fastest payback. Use the calculator above for a personalized estimate.
Many states still offer net metering, but policies are changing. Net metering lets you sell excess power back to the grid for credits. Check your state's current policy — it significantly affects solar ROI.