Solar Cost & Payback Calculator
Estimate your solar panel system cost, federal tax credit savings, annual energy production, and break-even payback period. Select your state and system size to get localized estimates based on real data from over 4.5 million US residential solar installations.
How We Calculate
System Cost
Gross cost = System size (kW) x 1,000 x state average cost per watt. State average cost per watt comes from LBNL Tracking the Sun data covering millions of residential installations in each state.
Net cost = Gross cost x 70% (after applying the 30% federal ITC).
Energy Production
Annual production = System kW x state average peak sun hours/day x 365 days x 0.80 efficiency factor. The 0.80 factor accounts for real-world losses including inverter efficiency, wiring losses, temperature derating, soiling, and shading. Peak sun hours from NREL PVWatts by state.
Annual Savings
Annual savings = min(Annual production x state electricity rate, your annual electricity bill). Savings are capped at your bill amount - excess production may be credited at net metering rates, which vary by state and utility. Electricity rates from EIA Form EIA-861 (residential average by state).
Payback & 25-Year Savings
Payback period = Net cost after ITC ÷ estimated annual savings.25-year savings = (Annual savings x 25) − net cost. This simplified model does not account for electricity rate escalation or panel degradation (typically 0.5%/year). Actual results will vary based on your installer, roof type, and local utility.
Sources: LBNL Tracking the Sun (system costs) • NREL PVWatts (sun hours) • U.S. EIA Form EIA-861 (electricity rates)