How solar savings are calculated depends on your electricity use, a PVWatts production estimate, sourced state data and clearly stated assumptions. Our calculator gives an estimate, not a quote, and shows where its numbers come from so you can check them against real installer quotes.
How solar savings are calculated
- Your use: from your monthly kWh if you enter it, otherwise your monthly bill (minus any fixed charges you enter) divided by your electricity rate, times 12.
- Production: the federal PVWatts model (version 8, from the National Laboratory of the Rockies, formerly NREL) estimates how many kWh one kilowatt of panels makes per year at the center of your ZIP code (located with U.S. Census Bureau ZIP code area data), for a fixed roof-mounted array at a 20° tilt facing the direction you choose, with 14% system losses. We subtract 10% for some shade or 25% for heavy shade.
- System size: enough kilowatts to cover about 100% of your yearly use, between 1 and 25 kW.
- Cost: system watts × the average installed price per watt for your state, shown as a single figure when your state has its own published average. Where we have no state figure, we show the published national low-to-high range and use its midpoint. We never widen a price by an arbitrary percentage.
- Savings: each kWh produced is valued at your electricity rate, minus any charge your state applies to solar production. The rate rises each year by the percentage you choose (2.5% unless you change it), and panel output falls 0.5% per year.
- Solar sent to the grid: some of your solar is used at home and some is sent to the grid. We assume 40% is sent to the grid. This is an example, not a measured figure, and you can change it under “More options”. Where we have a sourced value for how your state credits exported solar, we value that share at the sourced credit and the rest at your retail rate, and we also show what your first-year savings would be if you used all of your solar at home. Where we do not, every kWh is valued at your retail rate and the calculator says so above your results.
- Payback and 25-year net: years until total savings equal the central cost, and 25-year savings minus that cost.
What the estimate leaves out
- State, utility or local rebates (we list verified programs in our state guides instead).
- Roof repairs, electrical upgrades, insurance, maintenance and inverter replacement.
- Lower credits for exported solar in states where we have no sourced export value. The calculator shows a notice when your state credits exports below retail, or when we have not yet verified its rule.
- Batteries.
Where our numbers come from
- Electricity rates: U.S. EIA, Electric Power Monthly, Table 5.6.A (average residential price for each state). We check EIA’s open data automatically every week and use the newest month for which all 50 states and D.C. have reported. If those updates stop for 45 days, we hide the rate rather than show an out-of-date one.
- Production: PVWatts v8.
- Installed prices: state averages published by EnergySage where available; otherwise a national range. Each figure on the site names its source and month. See every state on our solar panel cost by state page.
- Export credit rules: the state utility commission, a utility or a published guide, linked for each state on the same page.
- Federal tax rules: the homeowner credit ended after 2025 (Solar.com).
How we keep it current
Electricity rates update automatically each week. We review prices and state rules at least every three months and show the review date on each guide. Partners never see or influence the calculator’s numbers. If you find an error, please tell us through our contact page.
Try the solar panel cost calculator, see solar panel cost by state, and read the Florida and Connecticut guides for state-specific data and rules.