With the default inputs (System size 7; Annual production per kW 1400; Electricity rate 18.34; Annual utility rate increase 3%; Net system cost after incentives $19,250; Panel output loss per year 0.5%; Years to project 25; State U.S. average (18.34¢/kWh)), this calculator returns Simple Payback 9.6 years, Year-One Savings $1,797.32 and Net Savings Over the Period $42,023.30.
Every row is computed with this page's own calculator. Change the inputs above to model your own numbers.
| Electricity rate | Simple Payback | Net Savings Over the Period |
|---|---|---|
| 12¢/kWh | 13.9 years | $20,841.58 |
| 15¢/kWh | 11.5 years | $30,864.48 |
| 18.34¢/kWh | 9.6 years | $42,023.30 |
| 22¢/kWh | 8.2 years | $54,251.23 |
| 26¢/kWh | 7.0 years | $67,615.09 |
| 30¢/kWh | 6.1 years | $80,978.95 |
Enter the solar system size and expected annual production per kilowatt of capacity. Add the electricity rate, expected annual utility rate increase, and net system cost after applicable incentives. Then enter the panel output loss per year and the number of years to project.
The calculator estimates first-year savings, total electricity value, net savings, simple payback, and return on investment. The model assumes every kilowatt-hour produced offsets electricity at the entered retail rate. That treatment matches full net metering, but it can overstate value where exported electricity receives a lower credit.
The shipped defaults use a 7 kW system producing 1,400 kWh per kW annually. The electricity rate is 18.34 cents per kWh, the annual utility rate increase is 3%, and net system cost after incentives is $19,250. Annual panel output loss is 0.5%, and the projection covers 25 years. The selected state option is U.S. average (18.34¢/kWh).
For each year, production is reduced by the degradation assumption while the electricity rate rises by the escalation assumption. The annual values are added to determine cumulative electricity value. Payback is interpolated within the year when cumulative savings reach the net cost.
The results are Simple Payback: 9.6 years, Year-One Savings: $1,797.32, Net Savings Over the Period: $42,023.30, Total Electricity Value: $61,273.30, and Return on Investment: 218%.
Panel warranties typically guarantee output declines of no more than about 0.5% per year, but warranty terms and actual performance can differ. The calculation does not separately model maintenance, equipment replacement, financing costs, taxes, insurance, or changes in household consumption. These items can alter realized net savings and payback.
Under net billing, exported power is credited below retail, so actual savings can be lower unless the household consumes most production directly. The federal residential solar credit ended for expenditures after December 31, 2025. For a purchased system in 2026, net cost usually equals the full installed price minus available state or utility incentives.
Use the Solar Panel Cost Calculator to estimate system size and installed price. Use the Solar Financing Calculator to evaluate loan payments and financing costs.