How to use this calculator
Start by entering your average monthly electricity bill and your electricity rate per kilowatt hour. You can find both on your utility bill. Then select your region to set the average peak sun hours, or enter a custom value if you know your local solar irradiance.
The calculator divides your monthly bill by your electricity rate to determine how many kilowatt hours you use, then sizes a solar system to offset that usage. It applies the 30% federal tax credit automatically and shows your estimated payback period, monthly savings, and 25 year net savings.
Review the results to see whether solar makes financial sense for your home. A shorter payback period means faster return on your investment. If the payback exceeds 12 years, you may want to get quotes from local installers to see if actual costs are lower than the national average used here.
Understanding the federal solar tax credit
The federal Investment Tax Credit (ITC) lets you deduct 30% of your solar installation cost from your federal income taxes. This is a dollar-for-dollar tax reduction, not just a deduction. On a $20,000 system, that's $6,000 back at tax time.
The 30% rate is available through 2032. It steps down to 26% in 2033 and 22% in 2034. After 2034, the residential credit expires unless Congress extends it. Many states also offer additional incentives on top of the federal credit.
Net metering and how it affects savings
Net metering is a billing arrangement where your utility credits you for excess solar power sent back to the grid. During sunny hours your panels may produce more than you use, and that surplus spins your meter backward. You draw from those credits at night or on cloudy days.
Policies vary by state and utility. Full retail net metering gives you the best return because you get credited at the same rate you pay. Some states have moved to net billing or avoided-cost rates, which credit you at a lower wholesale rate and reduce savings by 20-40%.
Peak sun hours by region
| Region | Avg. Peak Sun Hours | Solar potential |
|---|---|---|
| Pacific Northwest (Seattle, Portland) | 3.5-4 | Moderate |
| Northeast (Boston, NYC) | 4-4.5 | Good |
| Midwest (Chicago, Minneapolis) | 4-4.5 | Good |
| Southeast (Atlanta, Charlotte) | 5-5.5 | Very good |
| Southern California | 5.5-6 | Excellent |
| Texas | 5-5.5 | Very good |
| Southwest (Phoenix, Las Vegas) | 6-7 | Outstanding |
| Hawaii | 5.5-6 | Excellent |
Frequently asked questions
How much do solar panels save on electricity bills?
Most homeowners save 50-100% on their electricity bills with a properly sized solar system. The exact savings depend on system size, local sun exposure, electricity rate, and your utility's net metering policy. On average, U.S. homeowners save $1,500-$2,500 per year.
What is the federal solar tax credit?
The federal Investment Tax Credit (ITC) lets you deduct 30% of your total solar installation cost from your federal taxes. It's available through 2032 and steps down to 26% in 2033 and 22% in 2034.
How long does it take for solar panels to pay for themselves?
The typical payback period is 6-10 years depending on your electricity rate, system cost, incentives, and sun exposure. After payback, all energy produced is essentially free for the remaining 15-20 years of the panel warranty.
How many solar panels do I need for my home?
A typical U.S. home using about 900 kWh per month needs a 6-8 kW system, or roughly 15-20 panels. Each modern 400W panel requires about 18 square feet of roof space. Use this calculator with your actual electricity bill for a personalized estimate.