Solar Panel Savings Calculator
What a solar system saves each year, when it pays for itself and what it returns over its life.
A solar system is a purchase that pays you back monthly: every kilowatt hour you generate and use yourself is a kilowatt hour you do not buy. The size of the saving depends on the system, how much of the electricity you use rather than export, and what you pay for power.
Enter the system size, its cost, your local sun hours and your electricity price, and this calculator shows the annual saving, the payback period and the lifetime return.
At a glance
- What you enter
- System size, Average sun hours per day, Performance ratio, Installed cost of the system, Price you pay per kWh, Export price per kWh, Share of generation used at home, Expected life of the system
- What you get
- Saving per year, Saving per month, Payback period, Net saving over the life of the system, Return over the life of the system, Average annual return
- Formula shown
- Yes - every step, right below your results.
- Cost and privacy
- Free, no account needed, and nothing you type is stored.
See worked examples ↓ Read the FAQ ↓ Share this calculator ↓
Results are estimates for general information only - always verify with a professional or official source before acting on them.
How to use the Solar Panel Savings Calculator
- 1 Enter System size (kW)
- 2 Enter Average sun hours per day (hours) - Peak sun hours, not daylight hours. Between 2 and 3 in northern Europe, 5 or more in sunny regions.
- 3 Enter Performance ratio - The share of the theoretical output that reaches your meter.
- 4 Enter Installed cost of the system
- 5 Enter Price you pay per kWh
- 6 Enter Export price per kWh - What the grid pays you for electricity you do not use. Often much lower than the retail price.
- 7 Enter Share of generation used at home - Rises with a battery, an electric car or daytime hot water.
- 8 Enter Expected life of the system (years)
- 9 Press Calculate. You get Saving per year, Saving per month, Payback period, Net saving over the life of the system, Return over the life of the system, Average annual return, and every intermediate step stays visible under “How is this calculated?”
- 10 Change one number at a time to see what moves the result - that is usually the most useful thing a calculator can tell you.
Worked examples
Real numbers run through this calculator. Open any example to load it into the form above and change it.
A 6 kW system at 4 sun hours that exports most of its output
An $11,000 installation with 40% self-consumption, 28 cents retail and 6 cents for exports.
You enter
- System size
- 6 kW
- Average sun hours per day
- 4 hours
- Performance ratio
- 80%
- Installed cost of the system
- $11,000.00
- Price you pay per kWh
- $0.28
- Export price per kWh
- $0.06
- Share of generation used at home
- 40%
- Expected life of the system
- 25 years
You get
- Saving per year
- $1,037.18
- Saving per month
- $86.43
- Payback period
- 10.61 years
- Net saving over the life of the system
- $14,929.60
- Return over the life of the system
- 135.7%
- Average annual return
- 5.4%
The system generates 7,008 kWh a year. You use 2,803 kWh at home, avoiding $784.90 of electricity, and export 4,205 kWh for $252.29, so the annual saving is $1,037.18, or $86.43 a month. The $11,000 cost pays back in 10.6 years. Over 25 years the net saving is $14,929.60, a return of 135.7% on the installation, or about 5.4% a year.
A 4 kW system with a battery that uses two thirds at home
A $6,000 system in a less sunny place, with 65% self-consumption and 22 cents retail.
You enter
- System size
- 4 kW
- Average sun hours per day
- 3 hours
- Performance ratio
- 75%
- Installed cost of the system
- $6,000.00
- Price you pay per kWh
- $0.22
- Export price per kWh
- $0.05
- Share of generation used at home
- 65%
- Expected life of the system
- 25 years
You get
- Saving per year
- $527.24
- Saving per month
- $43.94
- Payback period
- 11.38 years
- Net saving over the life of the system
- $7,181.06
- Return over the life of the system
- 119.7%
- Average annual return
- 4.8%
The system generates 3,285 kWh a year. Using 2,135 kWh at home avoids $469.76 and exporting 1,150 kWh earns $57.49, so the annual saving is $527.24, or $43.94 a month. The $6,000 cost pays back in 11.4 years, later than the larger system because there is less sun and a lower retail price. Over 25 years the net saving is $7,181.06, a return of 119.7% on the installation, or about 4.8% a year.
Guides that go with it
How Much House Can I Afford on My Salary?
You earn a steady salary. You want a house. Somewhere between those two facts sits a number you need to know before you talk to a lender, a seller, or a real estate agent: the top price you can realis…
How Much Emergency Savings Do You Really Need?
How Much Emergency Savings Do You Really Need? You can work out your own emergency fund target in about 20 minutes with a pen, a bank statement, and one honest look at your monthly spending. By the en…
How Much of Your Salary Should Go to Rent?
You can work out a defensible rent ceiling in about fifteen minutes with nothing more than your payslip and a calculator. By the end of this guide you will know your gross and take-home pay, the rent…
Frequently asked questions
What is a performance ratio?
It is the share of the theoretical output of the panels that reaches your meter. A 6 kW system in 4 peak sun hours a day could in theory produce 24 kWh a day; losses in the inverter, heat, dirt, shading and cabling mean the realistic figure is lower. A performance ratio of 80% is a common starting point for a well-installed system.
The calculation multiplies the system size by the peak sun hours, by 365 and then by the performance ratio, so the ratio applies to the whole year. Use a lower figure for a shaded roof, an older inverter or a very hot climate.
Why does self-consumption matter more than the export rate?
A kilowatt hour you use at home avoids buying one at the full retail price, while a kilowatt hour exported earns only the export rate, which is usually much lower. On a retail price of 28 cents and an export rate of 6 cents, using a unit yourself is worth nearly five times as much as exporting it.
That is why a battery, an electric car charged during the day or a hot water diverter raises the value of the same panels: they move units out of the export column and into the self-consumption column. Raising the self-consumption share is usually worth more than any change of export tariff.
What is left out of the lifetime saving?
Inverter replacement, which usually happens once in a 25-year life, cleaning, insurance, any roof work needed to fit or maintain the panels, and the cost of a battery if you add one. Panel output also declines slowly with age, and the calculation assumes the same electricity price and the same consumption for the whole period.
Because generation is valued at today's retail price and today's export rate, a change in either, or in how exports are credited, moves the answer. Treat the payback period as the number to compare between two quotes rather than as a promise about the future.
How is the payback period worked out?
It is the installed cost divided by the annual saving, and the annual saving is the self-consumed energy valued at the retail price plus the exported energy valued at the export rate. A system costing $11,000 that saves $1,037.18 a year pays back in about 10.6 years.
Payback ignores everything after that point, which is why the lifetime saving and the return over the life of the system are shown alongside it. A system with a longer payback can still be the better purchase if it lasts longer or produces more for each dollar spent.