Free Solar Tool
Solar Savings Calculator
Enter your monthly electric bill and state to estimate your system size, 25-year savings, payback period, and net cost after the 30% federal solar tax credit.
Calculate Your Solar Savings
Adjust the inputs to match your situation. All estimates update instantly.
Use your average monthly bill, not your highest summer bill.
System size
12.7 kW
25-year savings
$71,592
Payback period
12.1 yrs
Gross cost
$36,187
30% tax credit
−$10,856
Net cost
$25,331
Year 1 savings
$2,100
Finance this system instead of paying cash
At 5.99% APR / 144 months, estimated monthly payment: $353/mo — often less than your current electric bill of $175/mo.
Estimates use $2.85/W installed cost, 30% ITC (purchase only), 0.5%/yr panel degradation, and 3%/yr utility rate escalation over 25 years. Actual quotes vary. Always get 2–3 written proposals from licensed installers.
How to Use This Calculator
Enter your average monthly electric bill
Use your typical monthly bill — not your highest summer month. Check the last 12 months on your utility bills or account portal and use the average. Higher bills mean more energy to offset and a stronger financial case for solar.
Select your state / region
Your location determines two things: peak sun hours (how much energy your panels produce per day) and your electricity rate (how much you're paying per kWh). The Southwest has the most peak sun hours; the Northwest has fewer. Northeast and California have the highest electricity rates, which shortens the payback period.
Choose your ownership type
If you purchase the system (cash or loan), you qualify for the 30% federal Investment Tax Credit — a dollar-for-dollar reduction in your federal tax bill. Leases and PPAs don't qualify for the ITC; the installer claims it instead. Purchase ownership almost always provides better 25-year returns.
Review your system size and savings
The system size (kW) is what you'd need to fully offset your current usage. The 25-year savings projects total electricity savings accounting for 0.5%/year panel degradation and 3%/year utility rate escalation — the savings grow over time as rates rise. The payback period is the break-even point: after that, every year of savings is pure return.
What Affects Your Solar ROI
Electricity rate
The higher your rate, the more each kWh of solar production is worth. Homeowners in California, Massachusetts, or Connecticut (rates of $0.20–$0.30/kWh) see much faster payback than those in states with cheap power. Check your bill for your effective rate.
Sun hours and roof orientation
South-facing roofs at a 30-degree tilt produce the most energy. East or west-facing panels produce 15-20% less. Shading from trees, chimneys, or neighboring buildings reduces output significantly. A solar installer will use shade analysis tools to give you a precise production estimate.
System size relative to usage
A system sized to offset 100% of your usage gives the best return in states with full-retail net metering. In states with reduced net metering credits, sizing to 80-90% of usage and avoiding excess production can improve the economics.
Financing vs. cash
Paying cash or using a low-rate home equity loan gives the best lifetime return. Solar-specific loans (5-8% APR) still pencil out well because the savings usually exceed the monthly payment from year one. Leases avoid upfront cost but reduce lifetime savings by 30-50% compared to ownership.
Federal and state incentives
The 30% federal ITC is the biggest incentive — worth thousands on most systems. Many states add their own credits, rebates, or exemptions (property tax, sales tax). Some utilities also offer rebates for solar installation. Your installer will identify all applicable incentives in your area.
Utility rate escalation
Electricity rates have risen an average of 2-3% per year historically. That means your solar savings grow every year — the panels produce the same kWh but each kWh is worth more. This is why the 25-year savings figure looks so much larger than a simple payback calculation suggests.
Are You a Solar Installer? Show Homeowners Their ROI at the Kitchen Table
Homeowners who understand their savings close faster. SubcontractorHub's EasyQuote lets your reps build a full solar proposal — system size, production estimate, savings projection, and financing options — on a tablet at the home. The customer sees their payback period and monthly savings before the conversation ends.
GoodLeap, Sunlight Financial, and LightReach are embedded directly in the proposal. Monthly payment options are shown alongside 25-year savings. Solar teams using SubcontractorHub close more same-day appointments because the financial story is clear, visual, and compelling.
See How It WorksSystem size, production, and savings in one proposal
Monthly payment options from GoodLeap, Sunlight, LightReach
Financing approval in minutes — before the rep leaves
Show 25-year savings and payback period visually
Digital signature and job handoff to ops automatically
Common Questions About Solar Savings
How accurate is this solar savings calculator?
This calculator provides a ballpark estimate based on average installed costs ($2.85/W), your state's peak sun hours, and average local electricity rates. Real quotes vary based on your specific roof, shading, utility rate structure, and installer pricing. Use this estimate to understand the potential range before getting quotes from 2-3 licensed solar installers. Most homeowners find actual quotes within 15-25% of this estimate.
What is the 30% federal solar tax credit?
The federal Investment Tax Credit (ITC) allows you to deduct 30% of your solar installation cost from your federal income taxes. For a $20,000 system, that's a $6,000 tax credit — not a deduction, but a dollar-for-dollar reduction in taxes owed. The 30% rate is in effect through 2032, then steps down to 26% in 2033 and 22% in 2034. You must own the system (not lease) to claim the credit.
Is solar worth it if I plan to move in a few years?
Solar panels typically add value to a home — studies by Lawrence Berkeley National Laboratory found solar homes sell for about $4/W more than non-solar homes on average. For a 7 kW system, that's roughly $28,000 in added value. The exact impact depends on your market, buyer demographics, and how the system was financed. If the system is leased, the new owner must assume the lease, which can complicate a sale.
What is net metering and how does it affect solar savings?
Net metering allows you to send excess solar electricity back to the grid and receive a credit on your utility bill — effectively running your meter backward. Most US states have some form of net metering, though the credit rate varies. This calculator assumes you offset most of your usage directly without significant net metering credits. In states with strong net metering (1:1 rate), savings may be higher than shown.
How much does solar financing cost compared to paying cash?
Paying cash (or using a home equity loan) gives the best lifetime return — you own the system outright, claim the full 30% tax credit, and keep 100% of the savings. Solar-specific loans from lenders like GoodLeap typically run 5-8% APR over 10-25 years. With a loan, monthly payments are often lower than your current electricity bill from day one. Leases and PPAs have lower upfront cost but don't qualify for the tax credit and provide smaller lifetime savings.
Are You a Solar Contractor Looking to Close More Jobs?
SubcontractorHub gives solar installers a full sales platform — proposals, financing, pipeline management, and operations in one place.
Book a Free DemoAll calculations are estimates based on historical information and should be verified by the user.