Solar Savings Calculator (USA): Panel ROI and Payback

US solar payback: production, bill savings and the ITC

Annual output = kW × the state's peak sun hours × 365 × 0.80; savings = output × the state's average rate, up to your consumption. For 7.5 kW in California at $2.85/W, the tool finds 12,264 kWh; with the default $220 monthly bill, savings are capped at $2,640 in year one, with a 7.2-year payback: the 30% federal 25D credit is no longer deducted, since it does not apply to systems placed in service after 12/31/2025.

The tool's formulas

• Gross cost = kW × 1,000 × installed price per watt.
• Federal 25D credit = 0 since January 1, 2026 (previously 30% of gross cost); net cost = gross cost.
• Output = kW × the state's peak sun hours × 365 × 0.80 (losses).
• Annual savings = kWh produced, up to the kWh bought from the grid (monthly bill × 12 ÷ rate), × the state's average rate; each year output loses 0.5% and the rate rises by your inflation input. Payback is interpolated within the year when cumulative savings exceed net cost.
• Avoided CO₂ = 0.7 kg per kWh produced.

Example with the default values

In California (5.6 peak sun hours, $0.28/kWh), 7.5 kW at $2.85/W costs $21,375. No federal credit is deducted, so the net cost stays at $21,375. Output is 7.5 × 5.6 × 365 × 0.8 ≈ 12,264 kWh, worth $3,434 at the state rate. A $220 monthly bill means 220 × 12 ÷ 0.28 ≈ 9,429 kWh bought from the grid, so savings are capped at $2,640 in year one. With 3.5% annual rate increases, payback comes in 7.2 years. With a $300 monthly bill, all the output is used: $3,434 saved and a 5.8-year payback.

Limits

• The 25D credit can no longer be claimed for property placed in service after December 31, 2025, and the tool no longer deducts it; a system placed in service in 2025 still qualified (30%), a case the tool does not calculate.
• Consumption is derived from the monthly bill you enter, fixed charges included; output above it is not valued.
• Sun hours and rates by state are built-in averages, not continuously updated.

For a system in France (self-consumption and feed-in tariff), use the solar panel payback simulator.

Sources and dates: IRS, Residential Clean Energy Credit: 30% credit, not available for property placed in service after 12/31/2025 (P.L. 119-21 of 07/04/2025); EPA, Greenhouse Gas Equivalencies (updated 08/04/2026): 0.672 kg CO₂ avoided per kWh (eGRID 2022), close to the tool's 0.7 kg. State rates and sun hours: indicative, unverified values. Checked on 10/14/2026.

Frequently Asked Questions

Is the 30% federal solar tax credit still available in 2026?

Not for homeowners: according to the IRS, the 25D credit is not available for property placed in service after December 31, 2025, following P.L. 119-21. The tool no longer deducts it: the California example (a $220 monthly bill) gives a 7.2-year payback, against 5.3 years with the credit.

How much does a 7.5 kW solar system produce?

The tool multiplies system size by the state's peak sun hours, 365 days and a 0.80 derate. In California (5.6 hours) that gives about 12,264 kWh a year.

How long do solar panels take to pay off in the US?

For 7.5 kW at $2.85/W in California, the tool finds 7.2 years without the federal credit with the default $220 monthly bill, and 5.8 years with a $300 bill that absorbs all the output, for a $0.28/kWh rate rising 3.5% a year. In North Carolina ($0.13/kWh, 4.8 sun hours) it reaches 13 years.

What does residential solar cost per watt?

The tool starts from $2.85 per installed watt, or $21,375 for 7.5 kW. Replace it with the price in your quote, since cost per watt drives the payback period directly.

Is this tool really free?

Yes, all tools on Kristools are 100% free and accessible without registration.

Is my data protected?

Yes. All processing is performed directly and securely inside your browser. No personal data is sent to our servers.