Methodology
How the solar estimate works
We prefer an honest range with visible assumptions over a precise-looking number that hides uncertainty.
1. Estimate annual electricity usage
When only a monthly bill is available, we subtract an assumed fixed utility charge and divide the remaining annual spend by an estimated blended electricity rate. Actual bills and rate structures vary.
2. Size the system
Annual usage is multiplied by the selected electricity-offset target, then divided by estimated annual solar production per installed kilowatt. Shading reduces the production assumption. System size is constrained to a broad residential range.
3. Estimate installation cost
System size is multiplied by a state-level low and high installed cost per watt. An optional battery adds a separate broad cost range. Local labor, permitting, roof work, electrical upgrades and equipment choices can materially change a quote.
4. Model incentives and savings
The calculator subtracts no federal tax credit: the Section 25D residential clean energy credit ended for systems installed after December 31, 2025 under the One Big Beautiful Bill Act. (Leased or PPA systems may still benefit indirectly from the commercial 48E credit through 2027.) State, local and utility incentives are described on each state page but are not yet subtracted from the estimate. Savings distinguish electricity used in the home from exported electricity, assigning exports a conservative value of 45% of the retail rate. Eligibility and compensation rules must be confirmed independently.
5. Calculate payback and long-term benefit
Simple payback divides estimated net cost by first-year savings. The 25-year scenario applies illustrative electricity-rate escalation and panel degradation. It does not currently model financing interest, tax effects, maintenance or replacement equipment.
Data sources
State assumptions are informed by public data and reviewed periodically (last reviewed September 2026):
- • EIA Electric Power Monthly — average residential electricity prices by state
- • NREL PVWatts — solar resource and production estimates
- • LBNL Tracking the Sun — installed price per watt for residential systems
- • DSIRE — state incentive and net metering policy database
Calculator version
Version 2026.09-v2. Last reviewed September 14, 2026 — updated to remove the federal 25D credit, which ended for systems installed after 2025. Estimates are educational and should be independently validated before use in purchasing, financing, tax or installation decisions.