Solar panel cost calculator
Enter your quote, your electricity use and your utility’s prices to see what a solar system might generate, how much of that you would use, what you would export, and the bill saving and payback that follow. Results are a cautious, typical and optimistic range, and every formula is shown.
Unverified assumptions. Results use illustrative defaults for the items marked unverified below. They are arithmetic on your inputs, not a forecast or a quote.
| Item | Cautious | Typical | Optimistic |
|---|---|---|---|
| Installed cost, before incentives | $22,500 | $18,000 | $15,300 |
| Net cost after incentives | $22,500 | $18,000 | $15,300 |
| Generation, year 1 | 7,096 kWh | 7,884 kWh | 8,672 kWh |
| Used on site | 3,548 kWh | 3,942 kWh | 4,336 kWh |
| Exported to grid | 3,548 kWh | 3,942 kWh | 4,336 kWh |
| Bought from grid | 6,452 kWh | 6,058 kWh | 5,664 kWh |
| Energy bill without solar, year 1 | $2,000 | $2,000 | $2,000 |
| Energy bill with solar, year 1 | $1,110 | $1,010 | $920 |
| Saving, year 1 | $890 | $990 | $1,080 |
| Simple payback | 25.4 yrs | 18.3 yrs | 14.1 yrs |
| Cumulative net after 25 years | −$1,600 | $5,200 | $10,200 |
Cautious = dearest install, lowest performance ratio. Optimistic = cheapest install, highest performance ratio. Bills cover energy charges only; fixed monthly charges are not modelled. “Cumulative net” is savings minus net cost; it is not discounted.
Year by year, typical case
| Year | Generation | Saving | Loan payments | Cumulative net |
|---|---|---|---|---|
| 1 | 7,884 kWh | $990 | $0 | −$17,010 |
| 2 | 7,845 kWh | $980 | $0 | −$16,030 |
| 3 | 7,805 kWh | $980 | $0 | −$15,060 |
| 4 | 7,766 kWh | $970 | $0 | −$14,090 |
| 5 | 7,727 kWh | $970 | $0 | −$13,120 |
| 6 | 7,689 kWh | $960 | $0 | −$12,160 |
| 7 | 7,650 kWh | $960 | $0 | −$11,200 |
| 8 | 7,612 kWh | $950 | $0 | −$10,250 |
| 9 | 7,574 kWh | $950 | $0 | −$9,310 |
| 10 | 7,536 kWh | $940 | $0 | −$8,360 |
| 11 | 7,499 kWh | $940 | $0 | −$7,430 |
| 12 | 7,461 kWh | $930 | $0 | −$6,490 |
| 13 | 7,424 kWh | $930 | $0 | −$5,570 |
| 14 | 7,387 kWh | $920 | $0 | −$4,640 |
| 15 | 7,350 kWh | $920 | $0 | −$3,720 |
| 16 | 7,313 kWh | $910 | $0 | −$2,810 |
| 17 | 7,276 kWh | $910 | $0 | −$1,900 |
| 18 | 7,240 kWh | $910 | $0 | −$1,000 |
| 19 | 7,204 kWh | $900 | $0 | −$90 |
| 20 | 7,168 kWh | $900 | $0 | $800 |
| 21 | 7,132 kWh | $890 | $0 | $1,690 |
| 22 | 7,096 kWh | $890 | $0 | $2,580 |
| 23 | 7,061 kWh | $880 | $0 | $3,460 |
| 24 | 7,026 kWh | $880 | $0 | $4,340 |
| 25 | 6,990 kWh | $870 | $0 | $5,210 |
Formulas used (model v0.1)
| Install cost | capacity (kW) × 1,000 × installed cost per watt × range multiplier |
|---|---|
| Annual generation, year 1 (kWh) | capacity (kW) × peak sun hours per day × 365 × performance ratio |
| Generation in year t | year-1 generation × (1 − degradation)^(t − 1) |
| Self-used (kWh) | smaller of (generation × self-consumption share) and annual consumption |
| Exported (kWh) | generation − self-used |
| Purchased from grid (kWh) | annual consumption − self-used |
| Annual saving | self-used × import price + exported × export price |
| Prices in year t | year-1 price × (1 + escalation)^(t − 1); escalation defaults to 0 |
| Simple payback (years) | (install cost − incentive) ÷ year-1 saving; blank if saving ≤ 0 |
| Cumulative net at horizon | sum of annual savings − net install cost (or − loan payments made inside the horizon) |
| Cautious / optimistic | Cautious: dearest install multiplier, lowest performance ratio. Optimistic: cheapest multiplier, highest performance ratio. |
Assumptions and sources
| Assumption | Value | Source | Status |
|---|---|---|---|
| Installed cost per watt | 3 $/W | No source yet | unverified |
| Performance ratio | 80% | No source yet | unverified |
| Performance ratio spread | ±10% | No source yet | unverified |
| Install multiplier, cautious | 1.25 × | No source yet | unverified |
| Install multiplier, optimistic | 0.85 × | No source yet | unverified |
| Solar resource, Moderate solar resource | 4.5 peak sun hours/day | No source yet | unverified |
| Annual electricity use | 10000 kWh/yr | No source yet | unverified |
| Share of generation used on site | 50% | No source yet | unverified |
| Import price | 0.2 $/kWh | No source yet | unverified |
| Export compensation | 0.05 $/kWh | No source yet | unverified |
| Panel degradation | 0.5% | No source yet | unverified |
| Price escalation | 0% | No source yet | unverified |
| Horizon | 25 years | No source yet | unverified |
“Unverified” means no primary source has been inspected for that value. Values you type yourself are yours, not Teranautics data.
How the estimate works
The tool turns system size into yearly generation, splits that generation into the part you use at home and the part you export, and prices each part. The saving is what your bill falls by. Payback is the net cost divided by the first-year saving.
- Install cost: capacity (kW) × 1,000 × installed cost per watt × range multiplier.
- Annual generation, year 1 (kWh): capacity (kW) × peak sun hours per day × 365 × performance ratio.
- Generation in year t: year-1 generation × (1 − degradation)^(t − 1).
- Self-used (kWh): smaller of (generation × self-consumption share) and annual consumption.
- Exported (kWh): generation − self-used.
- Purchased from grid (kWh): annual consumption − self-used.
- Annual saving: self-used × import price + exported × export price.
- Prices in year t: year-1 price × (1 + escalation)^(t − 1); escalation defaults to 0.
- Simple payback (years): (install cost − incentive) ÷ year-1 saving; blank if saving ≤ 0.
- Cumulative net at horizon: sum of annual savings − net install cost (or − loan payments made inside the horizon).
- Cautious / optimistic: Cautious: dearest install multiplier, lowest performance ratio. Optimistic: cheapest multiplier, highest performance ratio..
Worked example (arithmetic only)
These round numbers exist so you can check every step. They are not US averages, quotes or forecasts.
| System | 6 kW at $2.50 per watt: 6 × 1,000 × 2.50 = $15,000 |
|---|---|
| Generation | 6 kW × 4 sun hours × 365 × 0.80 = 7,008 kWh a year |
| Use at home | 10,000 kWh a year; half of generation used as produced: 3,504 kWh |
| Export | 7,008 − 3,504 = 3,504 kWh |
| Saving | 3,504 × $0.20 + 3,504 × $0.05 = $700.80 + $175.20 = $876 a year |
| Simple payback | $15,000 ÷ $876 = 17.1 years, with no incentive |
Notice how much of the saving comes from the electricity used at home. In this example each used kWh is worth four times an exported kWh. That ratio, not the panels alone, often decides whether a system pays back.
What this calculator leaves out
- Location and roof. Orientation, tilt and shading change output. You set that through peak sun hours and the performance ratio.
- Tariff structure. One flat import price is assumed. Tiered, time-of-use and demand charges, and fixed monthly fees, are not modelled.
- Export rules. Compensation varies by utility and can change over time. Enter what your utility offers, or zero.
- Financing. A simple loan is available. Taxes, fees, discounting and the cost of money are not.
- Equipment replacement and maintenance. Not included.
This is a screening tool. It does not replace a site assessment and written quotes from licensed installers. See the methodology for how the model is versioned and the data sources page for the status of each default. If you are weighing a heat pump too, try the heat pump cost calculator or read how a heat pump works.
Sources
No external source is relied on for the default values on this page yet, which is why every default is marked unverified. The formulas are standard energy arithmetic, shown above so you can check them. The data-sources page lists what is still needed.
FAQ
How much do solar panels cost?
It depends on system size, equipment, roof, labour and local market. This page does not quote a typical US price because no sourced figure has been verified yet. Enter the price per watt from your own installer quotes and compare several.
How does the calculator estimate generation?
Capacity in kW × peak sun hours per day × 365 × performance ratio. Peak sun hours describe the solar resource at your site and roof angle. The performance ratio bundles every system loss into one fraction. Both are inputs you can change.
What is the performance ratio?
The share of ideal output you actually get after real-world losses such as heat, wiring, inverter conversion, dirt and shading. A lower value means a less productive system. A shaded or poorly oriented roof needs a lower figure than the default.
Why do the import and export prices matter so much?
Electricity you use on site avoids the import price. Electricity you send to the grid earns the export compensation, which can be far lower or even zero depending on your utility. A system that exports a lot is worth less per kWh than one that is used at home.
Does this include batteries, tax effects or time-of-use rates?
No. It uses one import price and one export price. Batteries, tax treatment, demand charges, tiered and time-of-use rates, fixed monthly charges and net-metering rules can change real savings materially.
Is the payback period a prediction?
No. It is the net cost divided by the year-1 saving that your inputs imply. If the saving is zero or negative the calculator shows “none” rather than inventing a figure.
Does my data leave my browser?
No. The maths runs on your device. The shareable link encodes your inputs in the address bar, so only share it if you are comfortable with that.