About the Solar Savings Calculator
The Solar Savings Calculator estimates system size, gross cost, net cost after incentives, payback period, 25-year net savings, and CO₂ offset for a residential rooftop solar installation. Each state carries an EvvyTools estimate of solar production, retail electricity rate, installed cost and incentive (not live or official data); roof orientation and shade level adjust output, and an export-credit setting covers net billing. The 30% federal Residential Clean Energy Credit (Section 25D) ended for systems installed after December 31, 2025, so it is off by default and can be switched on only to model a system installed in 2025 or earlier.
It is built for homeowners getting their first solar quote and wanting an independent sanity check, real-estate investors evaluating an income property with existing panels, electrification-minded households modeling solar + heat pump + EV in one place, and anyone whose installer rep quoted a number that felt either suspiciously good or surprisingly modest.
Calculations run in your browser; your inputs are sent only if you choose Save (stored in your account history) or Share (placed in the link). The state estimates are bundled into the page.
Estimates assume the utility-rate increase you enter (3% by default), the export-credit value you enter, and panel output degrading at the industry-standard ~0.5% per year. Real-world variables — net-metering policy changes (NEM 3.0 in California cut export rates by ~75%), inverter replacement at year 10–15 ($1,500–$3,000), roof age, and tree growth — can swing the answer materially. Always get three competing installer quotes before committing.
How Solar Panels Save You Money
Solar panels generate electricity from sunlight, directly reducing the amount of power you need to purchase from your utility company. Once installed, a residential solar system produces free electricity for 25 years or more. The savings start immediately: your electric bill drops because your panels are generating a significant portion (or all) of the energy your home consumes during daylight hours.
A typical U.S. homeowner paying $150 per month for electricity could save between $30,000 and $90,000 over 25 years, depending on location, system size, and local electricity rates. This calculator uses your actual bill plus EvvyTools state estimates of solar production, electricity rates and incentives to produce a personalized estimate; check it against installer quotes and your utility’s tariff.
The Federal Solar Tax Credit Has Ended for New Home Systems
The federal Residential Clean Energy Credit (Section 25D) used to let homeowners claim 30% of the cost of a solar system, including panels, inverters, batteries and installation. The One Big Beautiful Bill Act, signed July 4, 2025, ended the credit for expenditures made after December 31, 2025, so a system installed in 2026 or later gets no federal homeowner credit. This calculator leaves the credit off by default; tick “installed in 2025 or earlier” only to model a system completed before the deadline. Third-party-owned systems (leases and PPAs) are covered by separate business credits with their own deadlines.
Many states offer their own incentives, including state tax credits, rebates, performance-based incentives (PBIs), and sales-tax exemptions on solar equipment. These programs vary widely by state and can significantly reduce your net cost. This calculator subtracts a rough state-level incentive estimate when it has one; check your state energy office for the current programs.
Net Metering and How It Works
Net metering is a billing arrangement that credits solar homeowners for the excess electricity they send back to the grid. When your panels produce more power than your home uses (typically midday), the surplus flows to the grid and your meter effectively spins backward, earning you credits that offset electricity you draw at night or on cloudy days. Most states support some form of net metering, though policies and credit rates vary.
By default this calculator values every solar kWh at the full retail rate (100%), which is what full net metering does. Several states and utilities have moved to net billing, where exported power earns a much lower credit — California’s NEM 3.0 cut export value by roughly three-quarters. Use the Solar Credit Value setting to lower the blend (the share you use yourself at retail plus the exported share at the export rate); savings can be far lower than the 100% case. Adding battery storage can help you capture more of your own production when export credits are limited.
Panel Degradation and Long-Term Performance
Solar panels lose a small amount of output capacity each year due to natural degradation. Industry standard is approximately 0.5% per year, meaning after 25 years a panel retains about 87.5% of its original rated output. Top-tier manufacturers guarantee at least 80–85% production at year 25. This calculator accounts for annual degradation when projecting lifetime savings and energy production.
Solar Leasing vs. Buying: Which Is Better?
When you buy a solar system outright (cash or loan), you own the equipment, claim any state incentives, and keep all the savings. A cash purchase delivers the highest total return because there are no interest charges. A solar loan lets you finance the purchase with little or no money down, though interest costs reduce your net savings.
A solar lease or power purchase agreement (PPA) lets you go solar with zero upfront cost. A third-party company owns the panels on your roof and sells you the electricity at a fixed rate, typically 10–30% below your utility rate. You save money each month but don’t own the equipment. Leases can make sense if you can’t pay upfront or prefer to avoid maintenance responsibility.
How Roof Orientation and Shade Affect Production
A south-facing roof in the Northern Hemisphere receives the most sunlight over the course of a day and produces the highest annual energy output. Southwest-facing roofs are nearly as productive, capturing strong afternoon sun. West- and east-facing installations typically produce 10–20% less than due south. Even north-facing roofs can work in some regions, though output penalties are significant.
Shade from trees, neighboring buildings, or roof features (dormers, vents) reduces panel output. Even partial shading on one panel can disproportionately affect the entire string in older systems, though modern microinverters and power optimizers mitigate this effect. This calculator applies a shading factor so you can see the estimated impact on your savings.
Looking for related tools? Try our Renovation ROI Calculator to compare solar against other home improvement returns, or explore all Home & Real Estate tools.
Frequently Asked Questions
How much can I save with solar panels?
A typical U.S. homeowner paying 150 dollars per month for electricity saves 30,000 to 90,000 dollars over 25 years with solar, depending on state, system size, and rates. High-cost electricity states (California, Hawaii, Massachusetts) see faster payback and higher savings. Low-rate states (Washington, Idaho) take longer.
Is there still a federal solar tax credit?
Not for homeowners who buy a system now. The Residential Clean Energy Credit (Section 25D) was 30 percent of installed cost, but the One Big Beautiful Bill Act (signed July 4, 2025) ended it for expenditures made after December 31, 2025, so a system installed in 2026 gets no 25D credit. Systems completed in 2025 or earlier could claim it, and this calculator can model that case. Third-party-owned systems (leases and PPAs) fall under separate business credits with their own deadlines, and some of that value may show up in lease pricing.
How long do solar panels last?
Quality solar panels carry 25-year performance warranties guaranteeing at least 80 percent of original output at year 25. Real-world panels often produce 85 to 90 percent after 25 years. Inverters last 10 to 15 years and typically need one replacement (1,500 to 3,000 dollars) over the panel lifespan.
Do solar panels work on cloudy days?
Yes, but at reduced output - typically 10 to 30 percent of peak capacity on overcast days. Germany, one of the world's cloudiest major countries, is a solar leader. Performance calculations use annual solar irradiance data that already accounts for cloudy days, so state averages reflect real-world conditions.
Is buying or leasing solar better?
Buying or financing usually delivers better long-term value: you keep all the savings after payback and may qualify for SREC income or state incentives in some states. The 30 percent federal homeowner credit ended for systems installed after 2025, which narrows the gap. Leases and power purchase agreements (PPAs) have zero upfront cost but deliver only 10 to 30 percent bill savings and can complicate future home sales.
