Solar Savings Calculator

The federal Investment Tax Credit (ITC) for solar panels is 30% of the total system cost in 2026. This credit is in effect through 2032 under the Inflation Reduction Act. It reduces your federal income tax bill dollar-for-dollar — so a $20,000 solar system costs you effectively $14,000 after the credit. State incentives and utility rebates can reduce the net cost further.

The average US solar payback period in 2026 is 6–12 years, varying by location (sunshine hours), electricity rates, system size, and available incentives. States with high electricity rates (California, Massachusetts, Connecticut) see faster payback. After payback, the solar system generates essentially free electricity for its remaining 15–20 year lifespan.

Savings depend on: (1) how much electricity you use, (2) your local electricity rate, (3) how much sun your roof receives, and (4) whether you have net metering. A typical US home with a $150/month electricity bill can expect to eliminate 60–90% of that bill with a properly sized system — $1,080–$1,620 per year in savings.

Rising electricity rates benefit solar owners significantly. Electricity rates have historically increased 2–5% annually. At 5% annual rate increases, a system saving $1,800/year today saves $3,775/year in year 15 and $4,808/year in year 20. This is why the 25-year savings projection (with rate increase) is so much higher than a flat calculation — the value of your solar system grows as grid electricity gets more expensive.

Buying (cash or loan) is almost always better financially — you own the system, claim the 30% federal tax credit, and get 100% of the savings and any net metering credits. Leases/PPAs have no upfront cost but you get lower savings (the company keeps most of the value) and the system remains their property. If you sell your home, owned solar panels typically add value; leased systems can complicate the sale.