Welcome to the definitive Solar Panels Calculator. Determine your potential annual energy generation, total system cost, annual savings, and estimated payback period by inputting a few key variables. Start your solar investment analysis today!
Solar Panels Financial Calculator
Calculated Results
Solar Panels Calculator Formula
The calculations are based on the following industry-standard formulas (Performance Ratio assumed at 75%):
$$ \text{Total Cost (\$)} = \text{System Size (kW)} \times \text{Cost per Watt (\$/W)} \times 1000 $$ $$ \text{Annual Production (kWh)} = \text{System Size (kW)} \times \text{Peak Sun Hours (h/day)} \times 365 \times 0.75 $$ $$ \text{Annual Savings (\$)} = \text{Annual Production (kWh)} \times \text{Electricity Rate (\$/kWh)} $$ $$ \text{Simple Payback (Years)} = \frac{\text{Total System Cost}}{\text{Annual Savings}} $$Formula Sources: Energy.gov Solar Calculator, SEIA Market Insights
Variables Explained
- System Size (kW): The rated capacity of your solar array in kilowatts (kW). A common residential system size ranges from 5 kW to 10 kW.
- Installed Cost per Watt ($/W): The total cost of the system (including hardware, labor, and permits) divided by the system size in Watts. Used to determine total system investment.
- Average Daily Peak Sun Hours (h/day): The equivalent number of hours per day the sun shines at maximum intensity. This is location-dependent and crucial for production estimates.
- Current Electricity Rate ($/kWh): The price you currently pay your utility company for each kilowatt-hour (kWh) of electricity. This determines the value of the energy produced.
What is a Solar Panels Calculator?
A Solar Panels Calculator is an essential analytical tool used by prospective solar system owners to quickly estimate the financial viability and energy production of a solar installation before engaging with installers. It provides a standardized framework for understanding the core metrics of a solar investment.
This calculator specifically focuses on the simple payback period—the time it takes for the annual savings from the solar energy produced to equal the upfront installation cost. It accounts for local energy rates and sun availability to give a realistic financial projection, excluding complex factors like tax credits or financing costs.
How to Calculate Solar Panels Payback (Example)
- Determine Total Cost: Start with a 7.5 kW system and an installed cost of $3.00/W. Total Cost = $7.5 \times 1000 \times 3.00 = \$22,500$.
- Estimate Annual Production: Use the 4.5 peak sun hours and the 75% Performance Ratio. Annual Production = $7.5 \times 4.5 \times 365 \times 0.75 \approx 9,216 \text{ kWh}$.
- Calculate Annual Savings: Multiply the production by the electricity rate of $0.15/kWh. Annual Savings = $9,216 \times 0.15 \approx \$1,382.40$.
- Find Simple Payback: Divide the Total Cost by the Annual Savings. Simple Payback = $\$22,500 / \$1,382.40 \approx 16.27 \text{ years}$.
Frequently Asked Questions (FAQ)
What is the typical performance ratio used in these calculations?
The performance ratio (PR) accounts for system losses due to wiring, shading, dust, and temperature. A common, conservative PR used for preliminary estimates like this one is 75% (or 0.75). Actual PR can range from 70% to 85%.
Does the calculator include federal tax credits or incentives?
No, this calculator provides a *simple* payback period based purely on energy savings versus cost. It does not factor in the 30% federal solar tax credit (ITC) or any state/local rebates, which would significantly lower the effective total cost and reduce the payback period.
Why is the “Peak Sun Hours” variable so important?
Peak Sun Hours (PSH) is the single most critical variable, as it is a direct proxy for your location’s solar resource. A location with 5 PSH will generate significantly more energy than a location with 3 PSH, directly impacting your Annual Production and financial returns.
What is a good payback period for solar panels?
A simple payback period (before incentives) between 10 and 17 years is generally considered reasonable, depending on location and utility rates. Once the simple payback is calculated, factoring in the tax credit often lowers the effective payback to 7-12 years.