Solar Savings Calculator Formula
Understand the math behind the solar savings calculator. Each variable explained with a worked example.
Formulas Used
Annual Savings
annual_savings = annual_kwh * electricity_rateMonthly Savings
monthly_savings = annual_kwh * electricity_rate / 12Break-Even (years)
break_even_years = system_cost / (annual_kwh * electricity_rate)Annual Production
annual_production = annual_kwhVariables
| Variable | Description | Default |
|---|---|---|
system_cost | System Cost (after incentives)(USD) | 15000 |
system_kw | System Size(kW) | 6 |
sun_hours | Avg Peak Sun Hours/Day(hrs) | 5 |
electricity_rate | Electricity Rate(USD/kWh) | 0.14 |
daily_kwh | Derived value= system_kw * sun_hours * 0.80 | calculated |
annual_kwh | Derived value= daily_kwh * 365 | calculated |
How It Works
How Solar Savings Are Calculated
Solar panels produce electricity based on system size, sunlight hours, and system efficiency (typically ~80%).
Formula
Daily Production = System kW x Sun Hours x 0.80 (efficiency)
Annual Savings = Daily Production x 365 x Electricity Rate
Break-Even = System Cost / Annual Savings
Worked Example
6 kW system, 5 sun hours/day, $0.14/kWh, $15,000 cost after incentives.
system_cost = 15000system_kw = 6sun_hours = 5electricity_rate = 0.14
- 01Daily production = 6 x 5 x 0.80 = 24 kWh
- 02Annual production = 24 x 365 = 8,760 kWh
- 03Annual savings = 8,760 x $0.14 = $1,226
- 04Break-even = $15,000 / $1,226 = 12.2 years
Ready to run the numbers?
Open Solar Savings Calculator