About this tool
Solar savings, explained
Estimate what solar panels would save on your electricity bill and how long they take to pay for themselves. Set the size of the system, the output where you live, your electricity price and the installed cost, and see the savings year by year.
How to use it
- 1Start from Northern home, Family home or Sunny region, or set the System size in kWp, the Yearly output per kWp for your location and your Electricity price per kWh.
- 2Under System cost, enter the Installed cost per kWp and any Grants and tax credits, as a percentage of the cost.
- 3Under Your usage, set the share of Power used at home and the Price paid for exported power. Under Over time, adjust the price growth, the panel output loss and the Horizon.
- 4Read the Savings in year one, the payback time and the net gain, then the chart and the Year by year table. Use Compare with a scenario B to test two quotes.
How it works
How the savings are estimated
Production in year one is the system size times the yearly output per kWp. The power you use at home is valued at your electricity price, and the share sent to the grid at the export price. With the default figures, 6 kWp × 1,200 kWh gives 7,200 kWh; with 60 percent used at home at $0.25 and the rest exported at $0.06, the panels save $1,252.80 in year one.
Each following year, output falls by the panel output loss (0.5 percent by default) and the electricity price rises by the price growth (3 percent by default). The system cost is the installed cost per kWp times the size, minus grants and tax credits. The payback is the point where cumulative savings cover that cost, interpolated within the year. The net gain is the total savings over the horizon minus the cost, and the return is that gain divided by the cost.
With the defaults, a $15,600 system pays for itself in about 11.2 years and leaves a net gain of about $25,289 over 25 years.
The output per kWp changes most with location, roof direction and shade. Maintenance, inverter replacement and financing costs are not included. Everything runs in your browser.
Year one savings = kWp × output per kWp × (share used at home × electricity price + share exported × export price). System cost = kWp × cost per kWp × (1 − grants %)
When to use it
Ways people use it
A first estimate before quotes
Get an order of magnitude for your roof before you contact installers, so you can judge their proposals.
Checking an installer's figure
Enter the size, the yearly output and the price from a quote, and see whether the promised savings and payback match your own electricity price and usage.
Comparing system sizes
Put two sizes in scenario A and scenario B to see how much each extra kWp adds to savings, cost and payback time.
Using more of your own power
When exported power pays less than you buy at, raise Power used at home to see what using more of your own production during the day is worth.
FAQ
Questions people ask
How much electricity does a solar system produce per year?
It depends on location, the direction and tilt of the roof, and shading. It is usually expressed as kWh per kWp per year. Free public tools such as PVWatts from NREL or PVGIS from the European Commission estimate it for a specific address.
What does kWp mean?
kWp, or kilowatt peak, is the rated power of a solar system measured under standard test conditions. It describes the size of the system. To size one, divide your yearly consumption by the output per kWp where you live: 6,000 kWh a year at 1,200 kWh per kWp points to about 5 kWp.
How do I calculate solar panel savings?
Multiply the system size by the yearly output per kWp to get production, then value the part you use at your electricity price and the part you export at the export price. 6 kWp × 1,200 kWh gives 7,200 kWh: $1,800 a year if all of it replaces power at $0.25, or $1,252.80 if 40 percent is exported at $0.06.
Do I save the same amount on power I send to the grid?
Not always. Depending on your tariff and country, exported power may be credited at the full retail price, at a lower rate, or not at all. Set the Price paid for exported power to your tariff: the more of your own production you use directly, the closer your savings get to the full price per kWh.
How long do solar panels take to pay for themselves?
Add up the yearly savings until they cover the net cost of the system, knowing that savings rise with electricity prices and fall slightly as panels age. With the calculator's default figures, a $15,600 system pays for itself in about 11.2 years.