Solar Savings Calculator: Your First-Year and 25-Year Bill Savings

A solar savings calculator tells you how much a rooftop system could cut from your electric bills, not what it costs. With the default inputs, a 7.7 kW system saves about $1,892 in year one and roughly $64,497 over 25 years. Your result depends mostly on your rate, your sunshine and how your utility pays for exported power.

How to use the solar savings calculator

Start at the top and work down. Every field has a sensible default, so you can change only what you know.

1. Your state. Picking a state fills in a typical Electricity rate, Yearly output per kW and Export credit (% of retail rate). You can overwrite any of them.
2. Average monthly electric bill. Use a 12-month average if you can. The tool divides it by your rate to estimate yearly use.
3. Electricity rate. Your all-in price per kWh: energy charges divided by kWh. Leave out fixed monthly charges.
4. System size. The DC kW on your quote. The default, 7.7 kW, matches the median US residential system installed in 2025 (LBNL, 2026 (opens in a new tab)).
5. Yearly output per kW. How many kWh 1 kW of panels makes in a year where you live. For your exact roof, run PVWatts (opens in a new tab) and divide its yearly kWh by the system size.
6. Advanced fields. Share of solar used at home (default 40%), Export credit (% of retail rate) (default 100%), and Inflation for "today's dollars" (default 3%).
7. Yearly utility price increase and Panel output loss per year shape the 25-year total.

Below the results you get a line chart of cumulative savings (nominal and in today's dollars), a donut showing how much of year-one savings comes from solar used at home versus export credits, and a 25-year schedule you can download as CSV. A scenario table then reruns your inputs with exports paid 25% of retail, and again with 25% exports plus a battery that raises self-use by 35 points.

How the calculation works

The tool estimates yearly use from your bill, splits solar output into power you use directly and power you export, values each part, then grows the total over 25 years.

Yearly use (kWh)     = monthly bill ÷ rate × 12
Solar output (kWh)   = system kW × yearly output per kW
Self-used kWh        = min(output × self-use %, yearly use)
Exported kWh         = output − self-used kWh
Self-use value       = self-used kWh × rate
Export value         = min(exported kWh × rate × export credit %, kWh you still buy × rate)
Year-1 savings       = self-use value + export value
Year-n savings       = year-1 × (1 + escalation)^(n−1) × (1 − degradation)^(n−1)

Assumptions that match the code:

• No cash-out for surplus. Export credits can only offset power you still buy, so oversizing does not create extra savings.
• Bill equals energy charges. The bill-to-usage step assumes no fixed charge. If your bill includes one, subtract it before entering the bill.
• 3% yearly price growth and 0.5% yearly panel loss by default. The 0.5% figure is the median degradation rate in NREL's review of field data (Jordan and Kurtz, 2012 (opens in a new tab)).
• 18.2¢ per kWh default rate, in line with EIA's 2026 forecast for the US average residential price (EIA STEO, October 2026 (opens in a new tab)).

Worked example

Default inputs: $160 monthly bill, 18.2¢ per kWh, 7.7 kW, 1,350 kWh per kW, 40% self-use, 100% export credit, 3% escalation, 0.5% degradation.

• Yearly use: $160 ÷ $0.182 × 12 = about 10,549 kWh.
• Solar output, year 1: 10,395 kWh, which covers 98.5% of your use.
• First-year savings: $1,892, or $158 a month on average.
• 25-year savings: $64,497.
• Estimated new monthly bill: $2, before fixed charges.

Second example, a sunny net-billing state: $180 monthly bill, 15.3¢ per kWh, 8 kW, 1,755 kWh per kW (close to the PVWatts figure for Phoenix), 40% self-use and exports credited at 38% of retail.

• Solar output, year 1: 14,040 kWh, covering 99.4% of about 14,118 kWh of use.
• First-year savings: $1,349 ($112 a month); 25-year savings: $45,990.
• Estimated new monthly bill: $68.

The second home makes 35% more power than the first yet saves less, because most exports earn well under the retail rate.

What your result means

Treat first-year savings as the number to check against a sales proposal. If a quote promises much more than this tool shows with your real rate and export rule, ask how they got there.

The 25-year figure is gross savings. To see whether solar pays off, compare it with the price using the solar payback calculator. Our guide on whether solar panels are worth it walks through the full decision, and how much solar panels cost covers the price side.

Rules that change the answer

• Export credits. Florida's PSC Rule 25-6.065 requires investor-owned utilities to credit exports at retail. California's Net Billing Tariff (opens in a new tab) pays hourly avoided-cost values instead. See our California NEM 3.0 guide and the net metering calculator.
• Fixed charges. Solar cannot reduce them. California's large utilities added an income-graduated fixed charge of about $24.15 a month for most customers.
• Federal credit. As of October 2026, the 25D credit is gone for installations completed after December 31, 2025 (IRS FAQ (opens in a new tab)). That affects cost, not savings.
• Batteries. Storing midday solar for the evening raises self-use. Our guide on whether solar batteries are worth it explains when that pays.

Common mistakes

• Entering the total bill including fixed charges, which overstates usage and savings.
• Leaving the export credit at 100% in a net-billing state.
• Using a sales quote's production figure without checking it against PVWatts.
• Reading 25-year savings as profit instead of subtracting the system price.
• Assuming rates rise 5% or more every year for 25 years.

Limits of this calculator

This is an educational estimate, not financial, tax or engineering advice. It uses yearly averages, so it does not model hourly time-of-use prices, seasonal swings, shading on your roof, or tiered rates. Real export credits, fixed charges and true-up rules vary by utility and change over time. Confirm the numbers with your utility's tariff and a written proposal before you sign.