Solar Panel Calculator

Calculate your solar panel system size, cost, payback period, and annual savings based on your electricity usage.

Last updated: March 2026

System Design Parameters

Monthly Bill

Rate per kWh

$/kWh

Peak Sun Hours/Day

hours

Panel Wattage

Available Roof Area

ft²

System Loss

% (typical: 12–15%)

Results

System Size

9.56 kW

Panels Needed

System Cost

$26,282

Fed. Credit (30% assumption)

−$7,885

Net Cost

$18,398

Annual Savings

$1,800

Payback Period

10.2 years

CO₂ Offset / Year

13,800 lbs

≈ 6.9 tons of CO₂ annually

Roof Space Requirement: 420 ft²

✓ System fits within your available roof area

Usage: 1250 kWh/month, 15,000 kWh/year
Assumptions: $2.75/W, 30% Federal ITC assumption, 0.92 lbs CO₂/kWh, 17.5 ft²/panel assumption

What is Solar Energy?

Solar energy is created when photons from the sun strike a photovoltaic (PV) cell, causing electrons to become excited and flow through a circuit, generating electricity. A residential solar panel system converts this sunlight directly into usable electrical power for homes and businesses.

Solar photovoltaic systems are increasingly cost-effective, with panel prices dropping over 90% in the past decade. Modern systems use micro-inverters or string inverters to convert DC power to AC, integrating seamlessly into the electrical grid. Many homeowners qualify for tax credits and rebates, significantly reducing installation costs.

The payback period (time to recover installation cost through energy savings) typically ranges from 5–10 years for US systems, after which you generate free electricity for 25–30+ more years of panel life. This makes solar one of the best long-term investments for reducing energy costs and environmental impact.

How to Size Your Solar System

Key Formula

System Size (kW) = Daily kWh Needed ÷ (Peak Sun Hours × Efficiency)

Daily kWh Needed = Annual usage ÷ 365 days

Peak Sun Hours = Location-dependent (USA avg: 4–6 hours)

Efficiency = 1 − System Losses (accounts for inverter, wiring, temperature losses)

Step-by-Step Sizing Process

1. Find Your Annual kWh: Divide monthly bill by $/kWh rate to find monthly consumption; multiply by 12 for annual.

2. Calculate Daily kWh: Divide annual kWh by 365 days to get average daily energy requirement.

3. Determine Peak Sun Hours: Use solar maps (NREL maps, PVWatts tool) for your location. US ranges 3.5–6+ hours/day depending on latitude and climate.

4. Account for Losses: Typical system losses are 12–15% (inverter ≈3–5%, wiring/connections ≈2–3%, temperature ≈5–8%).

5. Calculate System Size: System kW = Daily kWh ÷ (Peak Sun Hours × (1 − Loss %)).

6. Calculate Panel Count: Divide system kW by individual panel wattage; round up to nearest whole panel.

Example: Sizing a System

Calculate solar system for a home with $150 monthly bill in Phoenix, AZ:

Given:

Monthly bill: $150

Electricity rate: $0.12/kWh

Peak sun hours (Phoenix): 5.5 hours/day

Panel wattage: 400 W

System loss: 14%

Step 1:

Calculate monthly usage:

Monthly kWh = $150 ÷ $0.12 = 1,250 kWh/month

Step 2:

Calculate annual and daily usage:

Annual = 1,250 × 12 = 15,000 kWh/year
Daily = 15,000 ÷ 365 = 41 kWh/day

Step 3:

Account for system losses (86% efficiency):

Effective daily kWh = 41 ÷ 0.86 = 47.7 kWh/day (accounting for 14% loss)

Step 4:

Calculate required system size:

System size = 47.7 ÷ 5.5 = 8.67 kW

Step 5:

Calculate number of panels:

Panels = ceil(8.67 × 1000 ÷ 400) = ceil(21.7) = 22 panels

Result:

8.67 kW system with 22 panels

Cost (at $2.75/W): 8.67 × 1000 × $2.75 = $23,843. With 30% federal tax credit: Net cost ≈ $16,690. Payback in ~10 years; generates free electricity for 25+ years after.

Frequently Asked Questions

What is the 30% federal tax credit?

The Investment Tax Credit (ITC) allows you to deduct 30% of total system cost from your federal income taxes. It applies to materials, labor, and related costs. This is a direct dollar-for-dollar credit on your tax bill (not a deduction).

Can I use solar without batteries?

Yes! Most residential systems are 'grid-tied' and don't require batteries. Excess power goes to the grid; the grid supplies backup power at night. You earn credits for excess production (net metering) in many states.

What are 'peak sun hours'?

Peak sun hours is the equivalent number of hours per day when solar irradiance averages 1,000 W/m². It accounts for varying sun angle throughout the day. Arizona averages 5.5 hrs/day; cloudy regions like Seattle ~3.5 hrs/day.

How long do solar panels last?

Modern panels last 25–30+ years, degrading about 0.5% annually. Most manufacturers warranty output at 80% after 25 years. Inverters (8–15 year lifespan) usually need replacement once during panel life.

Does roof orientation matter?

Yes. South-facing roofs (in Northern Hemisphere) receive the most sunlight. East/west-facing roofs produce ~10–20% less. Shade from trees or buildings significantly reduces output. Professional solar surveys assess your roof.

What if my electric bill varies seasonally?

Use an average or target a system sized for peak season (winter for heating; summer for AC). You might overproduce in shoulder seasons and earn credits or sell excess power to the grid.

Can I expand my system later?

Yes, most systems are modular. However, check if your inverter and electrical panel have capacity. Adding panels later may require inverter replacement, which adds cost.

How accurate is this calculator?

This provides a solid estimate but cannot replace a professional solar assessment. Real payback depends on local incentives, shading, roof condition, financing, and regional variations in cost and electricity rates.