Methodology
Most online solar calculators are either lead traps or quietly stale. Here's exactly what ours does — every input, every factor, and what it can't do.
The formula
Annual usage = monthly bill × 12 ÷ your state's average residential rate (or your kWh input × 12).
System size = annual usage ÷ regional production ratio (kWh per kW per year, NREL PVWatts basis) × shading and direction derates.
Gross cost = system kW × 1,000 × installed $/W range ($2.50–$3.50, state- and size-adjusted).
Annual savings = (self-consumed kWh × retail rate) + (exported kWh × your state's export credit rate).
Payback = net cost ÷ annual savings. 25-year savings assumes 3–4%/year utility rate growth.
The $0 federal credit
The One Big Beautiful Bill Act (signed July 4, 2025) ended the 30% residential solar credit (Section 25D) for systems placed in service after December 31, 2025. For a 2026 homeowner purchase — cash or loan — the federal credit is $0. We state this explicitly because most competing calculators still subtract 30%, showing you 2026 prices with a 2025 tax credit. State and local incentives still exist but vary widely, so we point you to DSIRE (dsireusa.org) instead of hardcoding them.
Installed cost ($/W, 2026)
| Source | Figure | Notes |
|---|---|---|
| SEIA / Wood Mackenzie Q1 2026 | $2.58/W | National residential average installed |
| EnergySage, June 2026 | ~$2.75/W avg | 5 kW ≈ $2.78/W; 12 kW ≈ $2.60/W (price falls with size) |
| Industry range | $2.50–$3.30/W | Residential installed (EnergySage/NREL via industry press) |
| Lawrence Berkeley Lab, Oct 2025 | $3.50/W median | 2024 installs, cash price — conservative bound |
Our estimator uses $2.50–$3.50/W: slightly below average in competitive markets like California (~0.95×), slightly above in premium Northeast markets (~1.05×), and ~5% cheaper for systems over 10 kW (~5% more for small systems under 6 kW), matching the published size effect.
Electricity rates and sun hours by state
Your ZIP maps to a state, which sets three things: the average residential electricity rate (US average 18.31¢/kWh in July 2026 per EIA, ranging from ~12.7¢ in Louisiana to ~48¢ in Hawaii), the solar production ratio (about 1,750–1,800 kWh per kW per year in the Southwest down to ~1,100–1,200 in the Pacific Northwest), and your net-metering tier.
Net metering: three tiers
- Full retail net metering (~most states): exported kWh credited at the full retail rate. Self-consumption share barely matters for savings math.
- Reduced / net billing (CA under NEM 3.0, NV, AZ, HI, SC, IN, AR, RI): exports credited at roughly 5–23¢/kWh — far below retail. Batteries matter most here.
- Avoided cost / wholesale (AL, TN, KY, parts of TX, ID): exports worth ~4–5¢/kWh — nearly worthless. Maximize self-use.
We assume 55–70% of production is self-consumed without a battery and 80–90% with one. A battery adds ~$8,000–$12,000 to the cost range.
What this estimate can't do
- Assess your roof's structure, age, or whether it needs replacing first (installing solar on a 20-year-old roof is a classic expensive mistake).
- Measure exact shading — that needs a site survey with a shade analysis tool.
- Price your utility's specific rate plan, time-of-use options, or pending rate cases.
- Account for HOA rules, historic-district restrictions, or local permitting quirks.
- Predict future electricity rate changes beyond the 3–4%/year escalation assumption.
Identical homes in different states can legitimately see payback periods years apart. Always get at least three local installer quotes — that's the single highest-value step in this whole process.