Savings and payback

Solar savings calculator by utility rate

Enter your usage, system size, and your actual utility rate. Get an annual and monthly savings figure built from your real numbers, not a national average.

For planning purposes only, not financial or tax advice; confirm figures with a licensed installer or tax professional before making a purchase decision.

Your numbers

1 Project details Optional
Shown on your exported report. Leave blank to skip.
2 Your usage and rate
Add up 12 months from your utility bills, or multiply a typical month by 12.
Find this on your bill, usually labeled price per kWh or supply rate.
3 Your system
Use your quoted system size, or your panel count times panel wattage divided by 1,000.
National average is roughly 4 to 5.5. Check NREL's PVWatts for your exact address.
Accounts for inverter loss, wiring loss, dust, and temperature derate combined.

How it works

Three steps to your real savings number

Step 1

Pull your annual usage and rate

Add up 12 months of kWh from your utility bills, and find your price per kWh, usually labeled supply rate or energy charge. If you only have a monthly figure, the monthly bill reduction estimator works from that instead.

Step 2

Enter your system size and sun hours

Use your quoted system size in kW, or your panel count times panel wattage. If you don't have a quote yet, the solar panel calculator can estimate a system size from your usage first.

Step 3

Compare against your payback timeline

Once you have an annual savings figure, run it through the payback period calculator to see how many years it takes to recover your system cost.

Understanding your savings number

Why your own utility rate beats a national average

Electricity rates range from around $0.11 per kWh in parts of the Pacific Northwest to over $0.30 per kWh in the Northeast and Hawaii. A national average can misstate your real savings by 50% or more. This calculator uses the rate you enter, not a blended figure, so the answer reflects your actual bill. The US Energy Information Administration's electricity data show how retail rates have moved, which is the starting point for any savings estimate.

How production and usage interact

Your savings come from the smaller of two numbers: what your system produces, and what you use. A 6.5 kW system producing 9,490 kWh a year against a 10,800 kWh annual usage offsets about 88% of your usage. Once production exceeds usage, extra output typically earns net metering credit instead of direct savings, and credit rates vary by utility. Check the bill offset percentage calculator for a closer look at that ratio. For the official overview, the US Department of Energy's homeowner's guide to going solar covers buying, leasing, and system sizing.

What this first-year number doesn't capture

This tool gives a first-year snapshot at your current rate. Utility rates tend to rise over time, which increases your savings in later years, while panel output declines slightly each year from normal degradation. For a longer view, the rate inflation projection tool and the degradation loss tool both build on this same starting number. If your production estimate feels uncertain, the peak sun hours calculator gives you a second check on annual output.

Turning this into a payback timeline

An annual savings figure only tells half the story. Take it to the payback period calculator along with your system cost to see how many years until the system pays for itself, or to the net present value calculator for a more complete financial picture. The system size by monthly kwh usage is the quickest way to check whether the system size behind this estimate fits your roof and usage.

Questions

Frequently asked

Most homeowners save between $1,000 and $2,000 a year, depending on their utility rate and how much of their usage the system offsets. A 6.5 kW system offsetting 9,490 kWh a year at a $0.16 per kWh rate saves about $1,518 a year, or roughly $127 a month.

Utility rates vary widely by state and even by utility within a state, from around $0.11 per kWh to over $0.30 per kWh. A national average can be off by 50% or more in either direction, so using your own rate from a recent bill gives a far more accurate savings figure.

Savings are capped at your actual usage, since you can't save more than 100% of your bill through offset alone. Extra production typically earns net metering credits instead, which some utilities pay out at a lower rate than retail.

No, this tool uses your current rate for a first-year snapshot. For a projection that accounts for rate increases over the life of the system, use the rate inflation projection tool instead.

Related tools

Keep exploring your savings

Payback period calculator Monthly bill reduction estimator Annual bill reduction estimator Bill offset percentage calculator Flat rate vs tiered rate savings Time of use rate savings Rate inflation projection tool All savings and payback tools