Free tool
Solar Savings Calculator
Estimate undiscounted solar savings and a first-year simple payback approximation from your own annual kWh estimate, cost and electricity value.
- Free
- No signup
- Formula shown
- updated 2026-09
Calculate
Enter your values
Results update as you type. Everything is computed in the browser.
Supply a site-specific annual kWh estimate.
Use a blended value if some energy is exported.
- Year-1 operating saving (USD)
- 2,680
- First-year simple payback (years)
- 6.7
- Lifetime operating saving (USD)
- 62,841
- Lifetime net after cost (USD)
- 44,841
- Simple return after cost (%)
- 249.1
Computed in your browser. Inputs are not sent to a server.
Method
The formula, and every assumption behind it
A number you cannot check is not usable in engineering or finance work. This is the whole calculation.
Saving_y = Yield × (1 − d)^(y−1) × Tariff − OpexOperating total = Σ Saving_y. Net after cost = operating total − installed cost. First-year simple payback = cost / Saving₁ only when Saving₁ > 0; it is not a degradation-aware breakeven date.
Variables
| Symbol | Meaning | Unit |
|---|---|---|
| Cost | Installed system cost, net of any grant | USD |
| Yield | Year-1 annual production | kWh |
| Tariff | Electricity price avoided | USD/kWh |
| d | Annual degradation rate | decimal |
| Opex | Annual operating and maintenance cost | USD |
| y | Year, from 1 through the analysis period | year |
Assumptions and limits
- Year-1 kWh is user-supplied; this tool does not predict production. NREL PVWatts can help estimate it.
- The avoided electricity value and annual Opex are constant; exported energy needs its own blended value.
- No discounting, taxes, financing, tariff change or one-off replacements are modelled.
- Year 1 uses full entered yield; degradation applies from year 2 onward.
- The first-year payback ratio does not account for annual degradation. It is not an actual cash-flow breakeven date.
How to use it
Five steps
- 01
Enter the installed cost you want to recover, accounting for any known incentives.
- 02
Enter a year-1 kWh estimate for your site and system, not the panel nameplate rating.
- 03
Enter the value of each generated kWh you expect to use or export; exclude unavoidable fixed charges.
- 04
Enter annual degradation and annual operating costs from your own assumptions.
- 05
Compare operating savings before capital with net savings after capital, and treat payback as a first-year approximation.
Worked example
Worked example — 16,000 kWh array at $0.18/kWh
The example shows the inputs and main steps so you can check the result.
Inputs
- Cost: $18,000
- Yield: 16,000 kWh
- Tariff: $0.18/kWh
- Opex: $200/yr
- Degradation: 0.5%
- Period: 25 years
| Step | Value |
|---|---|
| Year-1 gross saving | 16,000 × 0.18 = $2,880 |
| Year-1 operating saving | $2,880 − $200 = $2,680 |
| First-year simple payback | $18,000 / $2,680 = 6.7 years |
| 25-year operating saving | ≈ $62,841 before capital cost |
| 25-year net after cost | $62,841 − $18,000 ≈ $44,841 |
| Simple return after cost | $44,841 / $18,000 ≈ 249.1% |
Questions
Common questions
- Is the payback figure an actual breakeven date?
- No. It divides installed cost by year-1 operating savings. Production degrades and cash flows may vary, so it is only a first-year simple payback approximation.
- Where can I estimate annual solar generation?
- Use a site-specific production model such as NREL PVWatts (pvwatts.nrel.gov), then enter the estimated year-1 kWh here. This calculator does not predict solar yield.
- What if I export surplus rather than self-consuming?
- Use an appropriately weighted average value per generated kWh, based on self-consumed and exported shares. The tool does not calculate those shares.
- Is inverter replacement included?
- A one-off future replacement is not modelled. The annual Opex input is constant, so a separate cash-flow model is needed for irregular expenses.
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