Estimate 25-year energy value, payback, ROI and NPV with separate import and export prices. Use your tariff and written quote, not a promised national-average return.
Quick Answer
They can, but annual generation alone is not enough to decide. On-site energy avoids an applicable import charge; exported energy earns the export credit. If half of 11,200 kWh is used at home at $0.25/kWh and half earns $0.06/kWh, year-one energy value is $1,736, not $2,800.
Source: Wattcrunch methodology and cited primary data
Simple vs advanced
Keep the main economics visible first. Open advanced only when you want to tune the assumptions yourself.
This tool is best for answering the homeowner question that matters most: “Will solar actually save me enough to be worth doing?”
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What really drives solar savings
Solar savings come down to a simple trade: you pay for a system once, and in return you stop buying decades of electricity from your utility. Whether that trade is a good one depends on four variables - how much sun your roof gets, how much you pay per kilowatt-hour today, how fast those rates rise, and what you pay for the system after incentives. This calculator models all four over a 25-year horizon so you can see the full picture rather than a single first-year number.
Important 2026 update: the homeowner tax credit has ended
For more than a decade the 30% federal Residential Clean Energy Credit (Section 25D) was the biggest lever in solar economics. That changed on January 1, 2026. Under the One Big Beautiful Bill, signed July 4, 2025, the homeowner credit was terminated for any system placed in service after December 31, 2025 - so a home solar system you buy with cash or a loan in 2026 receives $0 in new Section 25D credit. See the IRS eligibility guidance. Our calculator uses the current calendar year. Unused historical credit carryforwards and commercial-owner incentives are separate questions; a lease or PPA does not guarantee that a provider will pass an incentive through to your contract price.
Why we escalate rates and degrade production
Price growth and production degradation pull in opposite directions. This tool defaults to 2.5% annual import and export price growth and 0.5% annual production degradation. These are planning assumptions, not verified forecasts. Export prices may follow a different schedule from retail rates. The comparison below holds price growth at zero so you can see export sensitivity without assuming rising prices.
Payback, ROI, and NPV - three lenses
We report three complementary metrics. Payback period tells you when cumulative savings cover your net cost - intuitive, but it ignores everything after that date. ROI expresses lifetime net profit as a percentage of what you put in. Net present value is the most rigorous: it discounts every future dollar of savings back to today (we use 4%) so you can compare solar against simply investing the money. A positive NPV means the panels beat that alternative.
Net metering is the wildcard
How your utility credits the energy you export to the grid can swing savings by thousands of dollars. Under full retail net metering, every exported kWh offsets one you would have bought. Under newer net-billing tariffs, exports may be worth only a fraction of retail, which rewards self-consumption and batteries. Check your state’s rules in our Incentive Finder, then revisit this calculator with a realistic export assumption.
As always, treat these figures as a well-informed estimate. Final numbers depend on a professional shade study, your exact rate schedule, and the equipment quoted. But walking into a sales conversation already knowing your payback and ROI is the best protection against an inflated pitch.
Before treating the savings estimate as a decision
Use the rounded installed DC capacity from the sizing result, not the smaller energy target.
Separate avoided import charges from export credits. Do not value every generated kWh at the retail rate.
Compare savings with charges that actually disappear; fixed utility charges and a loan payment can remain. Test lower production and export credit before deciding.
Will solar panels save money if export credits are low?
They can, but annual generation alone is not enough to decide. On-site energy avoids an applicable import charge; exported energy earns the export credit. If half of 11,200 kWh is used at home at $0.25/kWh and half earns $0.06/kWh, year-one energy value is $1,736, not $2,800.
The same 8 kW system with three export-credit assumptions
Export credit
Year-one energy value
Modeled payback
$0.06/kWh
$1,736.00
14.3 years
$0.15/kWh
$2,240.00
11.0 years
$0.25/kWh
$2,800.00
8.7 years
Illustrative assumptions: 8 kW, 1,400 kWh/kW/year, $24,000 cash cost, 50% self-use, $0.25/kWh import price, 0% price growth, 0.5% annual degradation, 25 years and no upfront incentives. No maintenance, replacement costs, taxes or financing are included. These are sensitivity cases, not confidence intervals or actual tariffs.
What to check on your bill or installer proposal
Exclude unchanged fixed charges from the rate solar can avoid.
Check export settlement and whether credits can offset every bill component.
Re-run production, repair costs and price growth conservatively; positive total savings do not guarantee positive NPV.
Example and calculation notes updated . Method references are listed below; example rates are not verified utility tariffs.
How does this solar savings estimate work?
Annual energy value = self-used kWh x retail rate + exported kWh x export rate; subtract recurring costs for net savings.
A worked example with explicit assumptions
Illustrative year one: an 8 kW system at 1,250 kWh/kW/year produces 10,000 kWh. At 60% self-use, $0.25 retail and $0.06 export value, the model returns $1740.00. A $24,000 net cost has 13.79-year simple payback if rates and production stay constant. Maintenance, financing and replacements are excluded.
Reproducible example generated from the same calculator functions used by the tool. Inputs are illustrative, not measured customer results.
What should I verify before using the result?
Future rates, production and incentives are assumptions; NPV additionally depends on the discount rate.
Use your bill or written equipment quote, run a conservative scenario, and compare the result with the same inputs in another model.
Directly used solar can avoid an import charge even when exports earn little or nothing. Separate production used inside the home from exported energy.
Worked example: At an illustrative $0.20 import rate and $0.05 export rate, 1,000 kWh directly used is worth $200; 1,000 kWh exported earns $50.
What to verify: Neither rate is a verified utility price. Fixed charges, TOU and settlement can change the comparison.
Planning notes updated October 12, 2026. Example assumptions are not a local tariff.
Does 100% annual energy offset mean a zero bill?
No. Consumption and generation can match annually while imports cost more than exports earn and fixed charges remain.
Worked example: The worked bill guide models 12,000 kWh consumption and generation with 50% direct use; its illustrative result still has a $90/month bill.
What to verify: This is a tested planning example, not a verified customer bill.
Planning notes updated October 12, 2026. Example assumptions are not a local tariff.
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Frequently asked questions
How much will I save with solar over 25 years?+
Calculate energy value from actual production, self-use and export credits, then subtract installed cost and other ownership costs. There is no universal 25-year savings amount. Rate growth, equipment repairs, financing and tariff changes can materially change the result.
What is solar payback period?+
Payback is when cumulative modeled electricity savings reach net upfront cost. Some scenarios do not break even within the analysis horizon. Maintenance, replacements and financing can continue after break-even; energy is not automatically free.
Is there still a federal solar tax credit in 2026?+
Not for homeowner-owned systems. The 30% Residential Clean Energy Credit (Section 25D) ended December 31, 2025 under the One Big Beautiful Bill. Systems placed in service through 2025 still qualify; cash or loan purchases in 2026 get $0. Leases and PPAs can still pass through federal value via the commercial 48E credit. Our calculator uses these 2026 rules by default.
What electricity rate should I use?+
Use the variable energy charges solar can actually avoid, divided by the associated kWh. Do not include unchanged customer fees or taxes in an avoided-energy rate. Enter the export credit separately; default price growth is an assumption, not a forecast.
What is NPV and why does it matter?+
Net present value discounts future savings back to today’s dollars (we use 4%). A positive NPV means solar beats keeping that money invested at the discount rate - a more rigorous test than simple payback.