How our solar estimates are calculated

BySunMetricLab Editorial Team·Independent solar research and calculators

Last updated September 10, 2026

1. From your bill to yearly usage

The calculators start from the two numbers on any electricity bill: the monthly amount and the all-in rate per kilowatt-hour. If you enter the kWh directly, that is used instead.

monthly kWh = monthly bill ÷ rate ($/kWh)
yearly kWh = monthly kWh × 12
target production = yearly kWh × desired offset (50 to 100%)

2. System size and panel count

Size is the DC capacity needed to produce the target energy given the local average daily peak sun hours and a fixed performance ratio that covers inverter, wiring, soiling, temperature and mismatch losses.

system kW = target production ÷ (sun hours × 365 × 0.78)
panels = ceil(system kW ÷ panel kW)
roof area = panels × 20 sq ft

A performance ratio of 78% sits inside the 0.75 to 0.80 range NREL's PVWatts produces for typical residential systems with default losses. The 20 sq ft per panel figure includes row spacing and setbacks for a standard 400 W module of roughly 18 to 21 sq ft.

3. Cost, credit, savings and payback

gross cost = system kW × 1,000 × installed $/W
federal credit = gross cost × 30% (optional toggle)
net cost = gross cost − federal credit
yearly savings = target production × rate
payback (years) = net cost ÷ yearly savings
25-year savings = yearly savings × 25

Savings are valued at the full retail rate, which is only exact under one-to-one net metering. Where exports are credited below retail (net billing states such as California, Arizona or Nevada), real savings are lower unless you self-consume most of your production or add a battery. The state pages describe each state's export structure.

Battery options add a fixed installed cost of $9,000 (small backup, roughly 10 to 13 kWh) or $18,000 (whole-home, two or three stacked units) to the net cost, with savings held constant. That is deliberately conservative: it shows the cost of backup capability rather than assuming time-of-use arbitrage income.

4. The state and city cost pages

The cost-by-state and cost-by-city pages apply the same formulas to two published inputs per location plus a regional price tier:

• Average daily peak sun hours: annual averages derived from NREL's National Solar Radiation Database as exposed through PVWatts, rounded to one decimal. Cities carry their own value; the state figure is a population-weighted approximation.
• Residential electricity rate: the state's average residential price from the U.S. Energy Information Administration (EIA) state electricity profiles, rounded to the nearest cent. Cities inherit the state rate, since prices are set at the utility level.
• Installed price tier: $2.7, $3 or $3.35 per watt for low, mid and high-cost markets, reflecting labor, permitting and market maturity. These are round 2026 planning figures, not surveyed quotes.
• System losses: a derate of 0.8 on the state pages (slightly more conservative than the calculators' 0.78), and a representative 8 kW system for the headline payback.

Each state page also carries hand-written notes on net metering rules, state incentives and the major utilities. Those are editorial summaries of public program rules and are dated; where a program changes often the text says so and points to the official source.

5. What the models leave out

• Panel degradation (typically 0.4 to 0.6% per year) and electricity price escalation. They pull in opposite directions and are omitted rather than guessed.
• Financing cost. The loan calculator and the cash vs. loan vs. lease comparator handle that separately.
• Roof orientation and shading. East or west facing roofs and partial shade cut production by roughly 10 to 20%; enter fewer sun hours to approximate.
• State and utility incentives beyond the federal credit, because they change too often to hard-code. They only ever improve the picture.
• Maintenance, inverter replacement around year 12 to 15, and insurance.

6. Editorial process and corrections

Articles are planned from a keyword and topic map, drafted, checked against the formulas and constants on this page, run through automated content checks (no unsupported claims about specific incentive amounts, no template phrasing) and reviewed by the editor before publication. Data inputs are reviewed at least twice a year; the date at the top of this page and on every data page shows the last review. If you find a number that does not reproduce from the formulas above, or a program rule that has changed, use the contact page and we will correct it and note the change.