Solar Panel Calculator
Calculate your solar savings with the 30% federal ITC. Compare buying vs leasing vs PPA, estimate your payback period, and find the right system size for your home.
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How to Use This Calculator
Solar Savings tab
The default tab. Enter your system size (kW), electricity rate, and state to get peak sun hours. The calculator shows your annual production (kWh), year 1 savings, 25-year net savings, payback period, and ROI — all factoring in the 30% federal ITC, panel degradation (0.5%/year), and electricity rate escalation (3%/year default). Expand "More options" to override sun hours, system cost, or escalation rates.
Buy vs Lease vs PPA tab
Compare three ways to go solar: buying outright (with the 30% ITC), a solar lease (monthly payment with escalator), or a PPA (pay per kWh at a discounted rate). The calculator shows the 25-year total cost of each option and uses NPV (net present value) to determine which is the best financial decision at your discount rate.
System Size Estimator tab
Enter your monthly electricity bill, rate per kWh, and target offset percentage. The calculator recommends a system size in kW, estimates the cost, applies the 30% ITC, and projects 25-year savings. Use this to get a ballpark before requesting installer quotes.
Share your result
Every input is encoded in the URL. Click Share to send your exact scenario to a spouse, contractor, or financial advisor.
The Formula
Solar savings depend on system output, electricity rates, and the federal Investment Tax Credit:
Year N Production = Year 1 Production × (1 - 0.005)^N
Year N Savings = Year N Production × Electricity Rate × (1 + Escalation)^N
Net Cost = System Cost - (System Cost × 30% ITC)
Payback Period = Net Cost / Average Annual Savings
25-Year ROI = (25-Year Savings - Net Cost) / Net Cost
The federal ITC (30%) is a dollar-for-dollar tax credit under IRA Section 25D. It covers the full installed cost of your solar system, including panels, inverters, racking, wiring, and labor. Battery storage also qualifies. The 30% rate applies to systems placed in service from 2022 through 2032.
Panel degradation (0.5%/year) means your system produces slightly less each year. A 25-year-old system produces about 88% of its year-1 output. Electricity escalation (3%/year) means the value of each kWh you produce increases over time, partially offsetting degradation.
Example
Sarah — Homeowner, Phoenix AZ
Sarah pays $210/month for electricity at $0.14/kWh. She gets a quote for an 8 kW solar system at $24,000 installed. Phoenix averages 6.5 peak sun hours per day.
System & Production
Cost & ITC
25-Year Returns
Sarah's system pays for itself in about 6 years. Over 25 years, she saves nearly $80,000 after accounting for the system cost. The high sun hours in Arizona and the 30% ITC make this an excellent investment — far better returns than a typical stock market portfolio.