Solar Savings Calculator — How Much Can Solar Panels Save You?
Estimate how much solar panels could reduce your electricity bill. Enter your monthly bill, local sun hours, and desired system size to see your estimated savings, payback period, and 25-year return on investment.
Solar Savings Calculator
US average: $150/month
US average: $0.16/kWh
Average US home: 6-8 kW system
Your Results
Investment & Payback
How Solar Reduces Your Appliance Operating Costs
Solar panels don't reduce how much energy your appliances use — they reduce how much you pay for that energy. When your panels produce electricity during the day, your appliances draw from solar instead of the grid, effectively making that energy free.
For example, your central air conditioner costs about $1,635/year at $0.16/kWh. With a solar system that covers 80% of your usage, that effective cost drops to about $327/year.
| Appliance | Without Solar | With 80% Solar | Savings |
|---|---|---|---|
| Central AC | $1635/yr | $327/yr | $1308/yr |
| Electric Water Heater | $788/yr | $158/yr | $630/yr |
| Clothes Dryer | $292/yr | $58/yr | $234/yr |
| Refrigerator | $210/yr | $42/yr | $168/yr |
| EV Charger | $1681/yr | $336/yr | $1345/yr |
Peak Sun Hours by Region
“Peak sun hours” measures the equivalent hours of full-strength sunlight per day, accounting for morning/evening and cloudy periods. This varies significantly by location.
| Region | Peak Sun Hours | Example Cities |
|---|---|---|
| Southwest | 6-7 hours | Phoenix, Las Vegas, Albuquerque |
| South/Southeast | 5-6 hours | Dallas, Atlanta, Miami, Houston |
| Midwest/Mid-Atlantic | 4-5 hours | Chicago, Denver, Philadelphia, DC |
| Northeast | 3.5-4.5 hours | New York, Boston, Pittsburgh |
| Pacific Northwest | 3-4 hours | Seattle, Portland, Anchorage |
Note: Even areas with lower sun hours can benefit from solar, especially if electricity rates are high. The Pacific Northwest has low sun hours but high rates — payback is often still under 10 years.
Key Considerations Before Going Solar
Federal Tax Credit (30%)
The Inflation Reduction Act provides a 30% federal tax credit on solar installations through 2032. This applies to equipment, installation, and battery storage. A $16,500 system costs effectively $11,550 after the credit.
Net Metering
Most states offer net metering — your utility credits you for excess solar energy sent to the grid. This effectively lets you “bank” daytime production for nighttime use. Policies vary by state and utility, so check your local rules.
Roof Condition & Orientation
South-facing roofs produce the most energy. East/west-facing roofs produce about 80% of a south-facing system. Your roof should be in good condition — replacing a roof after solar installation adds significant cost. Shade from trees or buildings reduces production.
Battery Storage (Optional)
Adding a battery ($8,000-15,000) lets you store solar energy for nighttime use and provides backup during outages. Without a battery, you rely on net metering to credit excess production. Batteries make the most sense in areas without net metering or with time-of-use rates.
Does Solar Make Sense for You?
Solar is typically a good investment when:
- ✓Your electricity bill exceeds $100/month
- ✓Your electricity rate is above $0.12/kWh
- ✓You have a south-facing roof with minimal shading
- ✓You plan to stay in your home for 7+ years
- ✓Your state offers net metering
Even if your payback period is 8-10 years, remember that solar panels last 25-30 years. After payback, you get 15-20 years of essentially free electricity. Use our appliance cost rankings to see just how much you spend annually on electricity.
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Frequently Asked Questions
How much can solar panels save on my electricity bill?
A typical 6 kW solar system in a sunny area can offset 70-100% of an average household electricity bill, saving $1,000-2,000 per year. Actual savings depend on your location (sun hours), electricity rate, system size, and roof orientation.
What is the payback period for solar panels?
The average solar panel payback period in the US is 6-10 years after the 30% federal tax credit. In high-rate states like California or Connecticut, payback can be as fast as 4-5 years. After payback, you get free electricity for the remaining 15-20 years of the system's life.
How many solar panels do I need for my home?
The average US home uses about 900 kWh/month and needs a 6-8 kW system (16-22 panels). To calculate your needs: divide your monthly kWh by (30 days x peak sun hours x 0.80 efficiency) to get the kW system size needed for 100% offset.
Do solar panels work on cloudy days?
Yes, but at reduced capacity. Solar panels produce 10-25% of their rated output on overcast days. This is already factored into the 'peak sun hours' metric — a city with 4 peak sun hours still has more than 4 hours of daylight, but the diffused light counts for less.