How Much Will Solar Save You?
Solar panels pay for themselves through lower electric bills, tax credits, and decades of free energy. Use our free calculators to estimate exactly what you'd save — before talking to a single salesperson.
How Solar Savings Work
Going solar replaces electricity you'd otherwise buy from your utility. Here's the basic flow:
Installation Cost
A typical residential system costs $18,000–$25,000 before incentives. This is your starting investment.
Tax Credits & Rebates
The federal residential ITC expired Dec 31, 2025. State rebates and commercial incentives may still apply — check your state's programs.
Monthly Savings
Once installed, your system offsets 80–100% of your electric bill, generating savings every single month.
What Affects Your Savings
Your actual savings depend on several key factors. Understanding them helps you get the most accurate estimate.
Electricity Rate
The higher your current rate ($/kWh), the more you save with solar. National average is ~$0.17/kWh as of 2026, but California and Hawaii average over $0.30/kWh.
Peak Sun Hours
Arizona averages 6.5 peak sun hours/day; Washington state averages 3.5. More sun = more production = more savings, even with the same system size.
System Size
A typical home uses 10,500 kWh/year and needs a 6–9 kW system. Bigger isn't always better — sizing to your actual usage avoids wasted investment.
Incentives
The federal residential ITC expired December 31, 2025. State rebates, utility incentives, and SRECs remain available in many states and can still cut costs significantly — check your state's programs.
Net Metering Policy
If your utility offers full retail net metering, excess solar sent to the grid is credited at the same rate you pay. Many states pay only the wholesale rate (4–7¢/kWh). Note: California switched to reduced export rates (NEM 3.0) in April 2023, cutting new-install credits by ~75%. Always verify your state's current policy at dsireusa.org.
System Lifetime
Most panels carry 25-year performance warranties and last 30+ years. The longer you stay in your home after going solar, the higher your cumulative return.
Average Savings by State Tier
Solar savings vary widely by location. Here's a rough guide by electricity rate and sun exposure tier.
High-Savings States
Hawaii, Massachusetts, New York, Connecticut. High electricity rates drive strong savings. California still qualifies due to high rates, but NEM 3.0 (April 2023) reduced grid export credits — pair with battery storage for best results.
Mid-Savings States
Texas, Colorado, Arizona, New Jersey, Maryland. Moderate rates and strong sun yield typical 25-year savings of $25,000–$50,000.
Lower-Savings States
Louisiana, Arkansas, North Dakota, Oklahoma. Low electricity rates mean longer payback periods, though solar is still often net-positive over 25 years.
Quick Savings Estimator
Enter your monthly electric bill for a rough 25-year savings estimate. Assumes a typical $20,000 system and 90% solar offset.
Assumes 3%/yr rate escalation, 90% offset, no active federal ITC. Estimate only.