How the solar calculator works
Savings come from two numbers: the electricity the panels produce and the price you would otherwise pay for it. Output comes from NREL's PVWatts model, which simulates a roof-mounted system with standard panels facing south at a 20° tilt and 14% system losses, the model's default, using typical-year weather for each location.[1][2] Prices are the Energy Information Administration's 2025 average residential rates by state.[4]
Each panel of 410 W near Dallas produces about 617 kWh a year (0.41 kW × 1,506). Panels slowly lose output: NREL's review of nearly 2,000 measured degradation rates found a median of 0.5% a year,[7] the calculator's default.
Solar output and payback by city
Sunnier places produce more from the same panels, and higher power prices make each kilowatt-hour worth more. For a 7.7 kW system at the national median price of $3.60 per watt ($27,720), with every kilowatt-hour valued at the state's 2025 average rate:
| City | kWh per kW per year | Year-one output | State price | Year-one value | Payback |
|---|---|---|---|---|---|
| Phoenix, AZ | 1,755 | 13,514 kWh | 15.26¢ | $2,062 | 13.9 years |
| Los Angeles, CA | 1,677 | 12,913 kWh | 31.35¢ | $4,048 | 7.0 years |
| Sacramento, CA | 1,618 | 12,459 kWh | 31.35¢ | $3,906 | 7.2 years |
| San Diego, CA | 1,599 | 12,312 kWh | 31.35¢ | $3,860 | 7.3 years |
| Denver, CO | 1,595 | 12,282 kWh | 15.69¢ | $1,927 | 14.9 years |
| Tampa, FL | 1,568 | 12,074 kWh | 15.21¢ | $1,836 | 15.7 years |
| Miami, FL | 1,552 | 11,950 kWh | 15.21¢ | $1,818 | 15.8 years |
| Dallas, TX | 1,506 | 11,596 kWh | 15.40¢ | $1,786 | 16.1 years |
| Houston, TX | 1,421 | 10,942 kWh | 15.40¢ | $1,685 | 17.1 years |
The California rows value exported power at the retail rate; under the state's net billing tariff exports earn less, so treat those paybacks as a best case. Outside these cities, get your own figure from PVWatts for your address and choose Enter my own in the calculator. As a rough national reference, the national lab's technology baseline puts the U.S. population-weighted mean capacity factor for home systems at 15.7%, about 1,375 kWh per kW per year.[3]
How much can you save with solar panels?
What you save depends most on what your utility credits you for power you send back to the grid. Whether you get net metering, which credits exports at the retail rate, depends on the policies of your state and electric utility.[8] California, for example, moved new customers to a net billing tariff in April 2023 that credits exported power at a lower rate, on average, than its earlier net metering.[9] The table changes only the export credit, assuming half of the output is used in the home as it is produced:
| Export credit (% of retail) | Year-one savings | 25-year savings | Payback |
|---|---|---|---|
| 100% | $1,786 | $42,067 | 16.1 years |
| 75% | $1,563 | $36,808 | 18.5 years |
| 50% | $1,339 | $31,550 | 21.8 years |
| 25% | $1,116 | $26,292 | over 25 years |
| 0% | $893 | $21,033 | over 25 years |
Using more of your solar power yourself, for instance by running appliances in the middle of the day or adding storage, matters more when exports earn less. A battery has its own cost; size one with the solar battery backup calculator.
Electricity prices: where solar is worth most
The U.S. average residential price was 17.23¢ per kWh in 2025, but state averages ranged from 11.82¢ in North Dakota to 40.40¢ in Hawaii.[4] The same panels save about 3.4 times as much per kWh in the most expensive state as in the cheapest.
| State | ¢ per kWh | Value of 1,000 kWh |
|---|---|---|
| Hawaii | 40.40 | $404 |
| California | 31.35 | $314 |
| Massachusetts | 30.41 | $304 |
| Rhode Island | 29.48 | $295 |
| Connecticut | 29.31 | $293 |
| Maine | 27.69 | $277 |
| Montana | 12.99 | $130 |
| Arkansas | 12.87 | $129 |
| Louisiana | 12.52 | $125 |
| Nebraska | 12.05 | $121 |
| Idaho | 11.83 | $118 |
| North Dakota | 11.82 | $118 |
Worked example
- System: 7.7 kW at $3.60 per watt = $27,720. The federal residential clean energy credit does not apply to systems installed after December 31, 2025.[10]
- Output: 7.7 × 1,506 kWh per kW = 11,596 kWh in year one, 88% of a household using 1,096 kWh a month (the 2024 Texas average[5]).
- Value: 11,596 kWh × $0.1540 = $1,786 in year one, with full credit for exports.
- Payback: the savings add up to the system cost after about 16.1 years; over 25 years they total $42,067, or $14,347 more than the system cost.
The median installed price fell in 2025, to $3.60 per watt, and cash buyers paid a median $3.00;[6] rerun the numbers with your own quote. See the solar panel cost calculator for the price side and how many solar panels you need for sizing.
Solar with a loan: payment vs. savings
If you borrow the cost, the question becomes whether the monthly savings cover the monthly loan payment. Choose A loan in the calculator to see both side by side. In the Dallas example, borrowing $27,720 for 15 years at 7.50% (a HELOC at prime 7.00% plus a 0.5 margin, as an example) costs $256.97 a month against about $148.82 of savings, so you are out of pocket by $108.15 a month in year one; the loan adds $18,534 of interest, leaving −$4,188 net over 25 years. A HELOC's rate can change, so check the payment at a higher rate on the HELOC calculator before counting on the difference.
What the payback leaves out
- Financing. Borrowing adds interest. A HELOC at prime plus 0.5 (7.50%) costs $173.25 a month in interest alone on $27,720; compare loans with the home improvement loan calculator.
- Fixed charges. Monthly customer charges on your bill stay even if solar covers all of your use.
- Future prices. The default assumes today's electricity price for 25 years. Enter a yearly price rise only if you have a reason to expect one.
Inputs, not promisesPVWatts output is a modeled typical year; real output varies with weather, shading and roof angle. Your utility's tariff, not this page, decides what exported power earns.
Frequently asked questions
How much can you save with solar panels?
Year-one savings ≈ system kW × kWh per kW × your electricity price. A 7.7 kW system near Dallas at the Texas average rate saves about $1,786 in year one if exports earn the full retail rate, less if they earn less.
How long do solar panels take to pay for themselves?
On the defaults here, about 16.1 years. Payback is shorter where electricity is expensive and sunshine strong, and longer when exports earn less than retail. In 2026 there is no federal credit for a system you own.[10]
How much electricity does one solar panel produce?
About 617 kWh a year for a 410 W panel near Dallas (1,506 kWh per kW, PVWatts).[1] Divide by 12 for a monthly average.
Does solar save money without net metering?
Yes, but less. Power you use as it is produced still replaces power at the retail price; only the exported share earns the lower export credit. Set the export credit and the share used at home in the calculator to see the effect.
Sources
- PVWatts V8 API (annual output per kW at each city, queried November 13, 2026)
- PVWatts Version 5 Manual (NREL/TP-6A20-62641)
- Annual Technology Baseline 2025: Residential PV
- Electric Power Annual, Table 2.10: Average Price of Electricity to Ultimate Customers by State, 2025
- Electric Sales, Revenue, and Average Price, Table 5A: 2024 Average Monthly Bill, Residential
- U.S. Distributed Solar and Storage: 2026 Data Update (Tracking the Sun)
- Photovoltaic Degradation Rates — An Analytical Review (NREL/JA-5200-51664)
- Homeowner's Guide to Going Solar
- California residents are increasingly pairing battery storage with solar installations (Today in Energy)
- Residential Clean Energy Credit