Solar Power Calculator | 2024 Estimates and Savings
Solar Power Calculator: 2024 Estimates and Savings
Written by Faith Foushee
Edited by Jamie Cesanek
Last updated 01/09/2023
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- Using solar energy to power your home can reduce electricity bills and provide long-term savings.
- You can estimate the potential costs and savings of installing solar on your home with the SaveOnEnergy solar calculator.
- There are many payment options for solar, including a cash purchase, solar loan, lease, or power purchase agreement.
How many solar panels do I need for my home?
The average U.S. home needs 15–25 solar panels. You can tailor your solar system size to your energy needs and preferences, whether it’s full coverage or a partial offset. Achieving complete energy coverage requires a greater number of panels. However, you can still partially offset your energy usage if you install fewer panels.
Complete the following step-by-step process to calculate how many solar panels you need. The example calculation is based on 500 kilowatt-hours (kWh) of average usage, five peak sun hours, and a 22% solar panel efficiency rating.
1. Determine your energy consumption. Examine your electricity bill for the average monthly usage measured in kWh.
2. Assess solar panel efficiency. Higher efficiency panels generate more electricity per panel. The best solar panels have an efficiency rating of about 21–23%.
3. Calculate daily energy production: Divide your average daily consumption by the average daily peak sun hours in your area to calculate daily energy production.
Daily consumption (kWh) / Average peak sun hours = Daily energy production (kWh) 16.67 kWh / 5 hours = 3.3 kWh
4. Determine solar panel output: Multiply the daily energy consumption (kWh) by the panel efficiency to get the total energy output per day from a single panel.
Daily energy production (Wh) x Solar panel efficiency = Panel output (kWh) 3.3 kWh x 0.22 = 0.726 kWh
5. Calculate number of panels: Divide your average daily energy consumption by the panel output to find the number of panels you need.
Daily energy consumption (kWh) / Panel output (kWh) = Number of panels 16.67 kWh / 0.726 = 22.96
In this example, you would need about 23 panels to meet your average daily energy consumption with solar energy.
Do I qualify for solar energy?
According to the Solar Energy Industries Association (SEIA), over 4.6 million solar panel systems are installed in the U.S. By 2030, SEIA estimates that 15% of U.S. homes will have rooftop solar. The following are factors to consider when determining if you should install solar on your home.
- Budget: Determine how much you can spend on a solar panel system and factor in all available state and federal tax incentives. Setting a budget can help you choose a solar company and financing option.
- Roof condition: Solar energy production requires access to sunlight. If your roof is shaded, you may have to remove obstructions like trees for maximum efficiency. Additionally, if your roof is old or damaged, you will need roof repairs before installation.
- Location: Depending on where you live, you may have access to financial incentives to reduce the overall cost of solar. You can significantly offset your total expense if you live in a state with property and sales tax exemptions or additional tax credits.
If you have financial constraints or rent your property, consider alternatives to solar panel installation, such as community solar. With a community solar program, you support the development of solar farms and receive credits on your energy bill for the renewable energy produced. If a project is available in your area, subscribing to a community solar program like Arcadia could help you save 5–10% on your monthly energy bills.
Solar loan options
Solar loans are designed to make owning a solar panel system accessible to more homeowners. Instead of paying upfront, with a solar loan, you make regular payments over a longer period of time. You’ll still be eligible for government incentives, which can further offset the cost. Solar companies typically offer loans as a financing option and may partner with solar lenders. There are several other ways to get a loan for solar.
- Banks and credit unions: Inquire with your bank or credit union about their loan programs to determine if they have specific loan products tailored for solar installations.
- Solar lenders: Some specialized lenders focus on providing loans for solar projects. These lenders may have expertise in the solar industry and offer more flexible terms and competitive rates compared to traditional lenders.
- Home equity line of credit (HELOC): Consider using a home equity loan or HELOC to finance your solar installation if you have equity in your home. You may have lower interest rates, but your home is collateral if you can not repay the loan.
- Federal Housing Administration (FHA) or Fannie Mae loan: These loans help you finance your home and solar panel system at the same time. You can also refinance your current house payment and add solar panels to the mortgage.
The terms and conditions vary by loan type and lender, including interest rates, repayment period, and eligibility. Evaluate your financial situation and consider all potential downsides to assess whether solar loans are viable for your needs. It may be helpful to compare different loan offers to pick one that aligns with your long-term financial goals.
Should I lease my solar panels?
If you want to use solar energy without paying the upfront costs, you can also consider a solar lease or power purchase agreement (PPA). In a solar lease, you’ll make a fixed monthly payment to a solar company that owns, installs, and maintains the panels on your home. Solar PPAs are similar — you’ll pay a price per kWh of solar energy produced. Solar leases and PPAs are long-term contracts, typically lasting 25 years. Thoroughly review the contract for awareness of any early termination fees and annual price escalators.
Solar leases and PPAs can help expand access to solar energy, but buying solar panels outright or financing with a loan will lead to greater savings over time. The following table outlines the benefits and drawbacks of solar leases and PPAs.
| Pros | Cons |
|---|---|
| Little or no upfront cost | Ineligible for tax credits or other incentives |
| You are not responsible for maintenance or repairs | Less long-term energy savings |
| Lower energy bills and carbon footprint | Long-term contract without ownership |
Take the first step of your solar journey by using our solar calculator to determine how much you can save. Answer a few questions about your location and monthly energy bill to receive an estimate of the potential savings and benefits of going solar.