Solar Panel Cost & Savings Calculator

Home solar costs about $2.50–$3.50 per watt installed — $15,000–$21,000 for a typical 6 kW system before any verified local incentive. At $0.16/kWh in average sun, simple payback runs roughly 12–17 years under this model. No federal residential credit is applied for 2026.

How the estimate works

Solar is priced per watt. A 6 kW system is 6,000 watts, and residential installs run about $2.50–$3.50 per watt installed before incentives — so that 6 kW system costs roughly $15,000–$21,000 gross. The calculator multiplies your system size by the cost-per-watt range (or a single budget/premium price if you pick a tier) to get the gross cost.

The 2026 model applies no federal residential credit. Production comes from your sun region — roughly 1,100 kWh per kW per year in low-sun areas, 1,300 average, and 1,500 in the sunny Southwest — times system size. Multiply annual production by your electricity rate for annual savings, divide installed cost by that for simple payback, and project 25 years of savings against installed cost.

No system size? Size it from your bill

If you don't have a system size in mind, leave it blank and enter your monthly electric bill. The calculator converts the bill to annual kWh at your rate, divides by your region's production factor to estimate the kW you'd need to cover that use, and clamps the result to a realistic 2–20 kW residential range. It's a starting point — an installer will fine-tune it to your roof and goals.

What drives the price and the payback

• System size sets both cost and production — bigger systems cost more but save more.
• Your electricity rate is the single biggest payback lever. At $0.30/kWh solar pays back roughly twice as fast as at $0.15.
• Sun region swings annual production by ~35% between cloudy north and sunny southwest for the same panels.
• Verified local incentives can shorten payback, but this calculator does not assume them because eligibility varies by address and program.

Common mistakes

• Subtracting an expired or unconfirmed incentive. Use only programs the administering agency or utility confirms for your address and purchase date.
• Ignoring financing cost. Dealer fees and interest can materially lengthen the simple cash-payback figure shown here.
• Sizing by house square footage. Size by your kWh use — a 2,000 sq ft all-electric home needs far more solar than a gas-heated one.
• Taking one bid. Solar pricing varies 30%+ between installers for the same hardware. Get multiple quotes — EnergySage matches you to several for free.

When this calculator is the wrong tool

Use a detailed proposal (and NREL's PVWatts) for shade analysis, exact roof layout and panel count, battery and net-metering economics, time-of-use rate modeling, or address-specific incentives. This tool gives you a cost-and-savings ballpark to decide whether solar is worth pursuing.

The methodology: how we turn a system size into a payback

Every number on this page comes from one short chain of arithmetic, using national-average figures kept in a single data file so they're easy to audit and update. The formula is:

1. Gross cost = system size in watts × price per watt. We use $2.50–$3.50/W as the average installed range before incentives, or a single budget ($2.50) or premium ($3.50) price if you pick a tier.
2. Federal residential credit modeled = $0 for expenditures after December 31, 2025, based on current IRS Form 5695 instructions.
3. Modeled cost = installed cost. Subtract only a state, local, or utility incentive you have independently confirmed.
4. Annual production = system size in kW × your region's production factor (1,100 / 1,300 / 1,500 kWh per kW per year for low / average / high sun).
5. Annual savings = annual production × your electricity rate ($/kWh).
6. Simple payback = net cost ÷ annual savings, in years.
7. 25-year net savings = (annual savings × 25) − net cost.

Simple payback deliberately ignores rate inflation, panel degradation (~0.5%/year), and the time value of money. Real-world payback is usually a bit faster than the simple number because electricity rates rise over time, which is why we treat it as a conservative floor rather than a precise forecast.

A worked example, start to finish

Take a 6 kW system in average sun at the US-average rate of $0.16/kWh, using the average cost range — exactly the figures the data file ships with:

• Gross: 6 kW = 6,000 W. 6,000 × $2.50 = $15,000; 6,000 × $3.50 = $21,000. Gross is $15,000–$21,000.
• Federal credit modeled: $0 for a 2026 expenditure, so modeled cost remains $15,000–$21,000.
• Production: 6 kW × 1,300 = 7,800 kWh/year.
• Annual savings: 7,800 × $0.16 = $1,248/year.
• Payback: $15,000 ÷ $1,248 ≈ 12.0 years (best case); $21,000 ÷ $1,248 ≈ 16.8 years (worst case).
• 25-year net savings: ($1,248 × 25) − cost = $31,200 − $15,000 = $16,200 best case; $31,200 − $21,000 = $10,200 worst case.

That's the same math the calculator above runs the instant you change an input — these are the exact figures it returns for the default settings.

System-size comparison (average sun, $0.16/kWh)

Holding sun and rate constant, here's how the economics scale across common residential sizes. Notice the payback period barely moves — bigger systems cost more but save proportionally more, so size to your usage, not to a payback target.

Annual savings scale linearly with size here because production (kWh) scales with kW and the rate is fixed. Change your rate or sun region above and every row shifts — a higher rate or sunnier region pulls all three paybacks down.

What actually drives your price

• Panel and equipment tier. Premium high-efficiency panels and brand-name microinverters push you toward the top of the $/W range; value-tier modules with a string inverter sit at the bottom. Efficiency mostly matters when roof space is tight.
• Inverter type. A single string inverter is cheapest; microinverters or DC optimizers cost more but handle partial shade and per-panel monitoring better. This is one of the biggest line-item swings.
• Roof complexity. A simple, south-facing asphalt-shingle roof is cheapest. Steep pitch, multiple planes, tile or metal roofing, or anything needing structural reinforcement adds labor and racking cost.
• Region and labor. Permitting, inspection, and installer labor vary widely by state and even by city — the same hardware can differ 30%+ between two local installers, which is why multiple quotes pay off.
• Address-specific incentives. Some states, utilities, and municipalities offer rebates, performance payments, or property-tax exemptions. None are modeled here; confirm current eligibility before subtracting one.

Sources & how we keep this current

The cost-per-watt range, production factors, and incentive figures are national averages compiled from public industry and government data, reviewed periodically:

• EnergySage — Solar Marketplace price reports for installed cost-per-watt by system size and region.
• NREL (National Renewable Energy Laboratory) — PVWatts production modeling and annual solar cost benchmark studies.
• SEIA (Solar Energy Industries Association) — market data on installed pricing and incentive trends.
• IRS Form 5695 instructions — the official source for the termination of the Residential Clean Energy Credit for expenditures made after December 31, 2025.

Not tax advice. This calculator applies no federal residential credit for a 2026 expenditure. Tax law and transition rules can change; confirm your purchase date and current IRS guidance with a qualified tax professional.