Solar Panel Savings Calculator
Estimate annual solar production, yearly savings, and payback period from system size, sun hours, price, and cost.
Production applies an 80% derate for inverter, wiring, soiling, and temperature losses on top of the raw size × sun-hours × 365. Sun hours means peak-equivalent hours — most US locations land around 3.5 to 5.5. Payback ignores future rate increases and panel degradation.
How it works
A solar array's output depends on how big it is and how much usable sun your location gets. Multiply system size in kilowatts by peak sun hours per day and by 365 days to get a raw yearly figure.
Real systems lose energy to inverters, wiring, dust, and heat, so this applies an 80% derate — a common rule of thumb — to land on a realistic annual production in kWh. Multiplying that by your electricity price gives yearly savings.
Divide your installed cost (ideally after any rebates or tax credits) by those annual savings and you get a simple payback period in years. Shorter is better; anything the system produces after payback is essentially free electricity.
Frequently asked questions
What are peak sun hours?
Peak sun hours are the equivalent hours of full-strength sunlight your location receives in a day, not the number of daylight hours. Most of the US falls somewhere between about 3.5 and 5.5, with the sunny Southwest at the top end.
Why apply an 80% derate?
Panels rarely deliver their nameplate rating in the field. Inverter conversion, heat, shading, dust, and wiring resistance all shave output. An 80% factor is a widely used estimate for a decently sited, well-maintained system.
Does the payback figure account for rising electricity prices?
No. It's a simple payback that assumes today's price holds steady and ignores gradual panel degradation. Since power prices usually climb over time, real payback is often a bit faster than the plain estimate suggests.