Electricity rate
Higher retail prices generally create greater potential savings, because each avoided kilowatt-hour is worth more. Location matters more than hardware here.
HyreSolar tools
Solar Savings Calculator
See how much you could save on electricity over 25 years.
Use your electricity usage, utility rate and expected solar offset to estimate annual and long-term electricity savings. The result is a planning estimate, not an installation quote. Federal §25D is $0 for systems placed in service after 31 December 2025.
Last updated . Electricity rate data: May 2026 (EIA), retrieved 6 August 2026.
How much could solar save?
- Usage How much electricity your home buys in a year.
- Rate What you pay per kilowatt-hour.
- Offset How much of that a system is expected to cover.
- Time What you assume rates do over 25 years.
Your home and electricity
Three numbers get you a result. Advanced assumptions stay folded away.
$1,693 Estimated first-year electricity savings
$3,051 Annual savings in year 25
$57,710 25-year nominal savings
Add a net cost Simple payback
0% Federal §25D in this model
10,800 kWh/yr × 85% offset × 18.44¢/kWh. Utility inflation 3.0%/yr, module degradation 0.5%/yr. Nominal dollars, not discounted. Federal §25D is $0 for systems placed in service after 31 December 2025.
$1,693 in year 1 $3,051 in year 25 $57,710 over 25 years Enter a net costThis calculator provides a planning estimate, not a solar installation quote. Actual production, project cost, utility rules and savings vary by property and location.
Your estimated savings over 25 years
The gold dashed line is annual savings. The filled area is cumulative. Hover a year for the modelled rate that year.
Cumulative Annual
Year-by-year table
| Year | Annual | Cumulative |
|---|
What this means
Based on the default assumptions, this model estimates about $57,710 in avoided electricity purchases over 25 years. That is a planning estimate, not a guaranteed return.
See how your savings change
Same usage, rate and offset. Only utility inflation moves. Conservative is 2%. Higher-rate is three points above whatever you set.
| Scenario | Year 1 | Year 10 | Year 25 annual | 25-year total |
|---|
What has the biggest impact on your savings?
Four inputs do almost all of the work. A proposal can move each of them without saying anything false.
Electricity usage
A home that buys more kilowatt-hours has more consumption to offset. Size the system to annual kWh, not to roof folklore.
Solar offset
The more of your current use the array actually covers, the greater the potential savings. 100% offset is not a $0 bill. Fixed charges remain.
Utility inflation
If electricity prices rise, future avoided purchases become more valuable in this model. That is also the easiest assumption for a sales deck to inflate.
Electricity rates vary dramatically by location
Only markets with a retrieved EIA vintage are listed. Selecting one writes that rate into the calculator. It is not a quote for every customer in the state.
Do not use the average if you have a bill. Type your blended rate in the calculator instead.
U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A. Retrieved 2026-08-06. Illinois is a 2024 profile and is labelled as such.
United States (average) 18.44¢/kWh Estimated first-year savings in this model: $1,693
National residential average. A starting point, not your tariff.
How the solar savings calculator works
A solar savings calculator estimates how much electricity spending a homeowner could avoid by generating some of their electricity with solar over a specified period. This one uses six steps.
Estimate electricity purchases avoided
Annual kWh times the offset percentage. That is the energy you no longer buy at retail, in this model.
Apply your electricity rate
Year-1 saving = avoided kWh × rate in dollars. Rate is entered in cents and converted.
Model future electricity-price inflation
Each later year multiplies the prior path by (1 + inflation).
Account for system degradation
Each later year also multiplies by (1 − 0.5%) unless you change that in advanced assumptions.
Add annual and cumulative savings
The 25-year total is the sum of years 1 through 25, in nominal dollars, not discounted.
If a net cost is entered, estimate simple payback
Net cost divided by year-1 saving. Not a discounted return.
Technical formula
Let S0 = kWh × offset × (¢/kWh / 100). For year t from 0 to 24, St = S0 × (1 + i)t × (1 − d)t. Cumulative = Σ St. Simple payback = net cost / S0. i defaults to 0.03, d to 0.005. Federal credit = 0.
Example: a 10,800 kWh/year home
EIA US average rate, May 2026. 85% offset. 3% inflation. 0.5%/yr degradation. No federal credit.
- Annual usage
- 10,800 kWh
- Electricity rate
- 18.44¢/kWh
- Solar offset
- 85%
- Utility inflation
- 3% / year
- First-year savings
- 10,800 × 0.85 × $0.1844 = $1,693
- Year-25 annual
- $3,051
- 25-year cumulative
- $57,710
- Payback on $25,000 net
- 14.8 years, simple
What this calculator assumes
Every value is editable. Defaults are labelled as such.
Electricity usage 10,800 kWh/year
What it means: kilowatt-hours bought in a year, not the dollar total on the bill. Why it matters: it is the quantity being offset. Source: a round planning default, not an EIA household average presented as yours. You can change it.
Electricity rate 18.44¢/kWh
What it means: blended retail cents per kWh. Why it matters: it is the price of each avoided unit. Source: EIA Electric Power Monthly Table 5.6.A, May 2026, retrieved 6 August 2026, used only as the default. You can change it, including via the location selector.
Solar offset 85%
What it means: share of annual kWh the array is assumed to cover. Why it matters: 100% offset is not a $0 bill. Source: an editorial default chosen to be more honest than 100%. You can change it.
Utility inflation 3.0% / year
What it means: assumed annual increase in the retail rate. Why it matters: it dominates the 25-year total. Source: a 2% to 4% planning band, not a forecast. You can change it under advanced assumptions.
System degradation 0.5% / year
What it means: assumed annual drop in production. Why it matters: it trims later years. Source: common crystalline-silicon warranty slope, not a measurement of your modules. You can change it under advanced assumptions.
Net system cost Not entered
What it means: cash or loan net cost after incentives you actually qualify for. Why it matters: payback needs it. Source: you. Default is blank. Federal §25D is not subtracted, because it is $0 after 31 December 2025.
The assumption nobody argues about
Your proposal picked a degradation rate, and it picked the optimistic half
Almost every residential solar proposal assumes modules lose about half a per cent of their output a year. That figure is real and it is published. It is also a median — and the mean of the same dataset is nearly twice as high.
Source fact. Jordan, Kurtz, VanSant and Newmiller aggregated more than 11,000 degradation rates from almost 200 studies across 40 countries in Compendium of photovoltaic degradation rates (Progress in Photovoltaics, vol. 24 no. 7, 2016). For crystalline silicon — which is what is on essentially every residential roof — the median degradation rate is 0.5-0.6% per year and the mean is 0.8-0.9% per year. The earlier 2013 review by the same group assembled nearly 2,000 rates and reported a median of 0.5% per year.
HyreSolar analysis. A mean that sits well above its own median is telling you something specific about the shape of the distribution: there is a tail of systems that degrade a great deal faster than the typical one, and that tail is heavy enough to drag the average up by most of a percentage point. The median describes the system in the middle. It does not describe your risk. When a proposal writes 0.5% into a 25-year cash flow without saying where it came from, it has silently chosen the statistic that describes the better half of the population and presented it as the expected case.
HyreSolar calculation. Applied over 25 years to the same array, the low rate leaves output at 88.7% of year one and the high rate at 80.5%. Summed across the whole term, the difference in total energy generated is 4.6%. That is not catastrophic, and we are not going to pretend it is. It is roughly one year of production quietly removed from a 25-year total, on an assumption the document never defends.
The useful next step. Ask the installer which degradation rate their savings model used and what the module’s own performance warranty guarantees at year 25. Those are two different numbers and they should both be in writing. If the modelled rate is more optimistic than the warranted rate, ask why.
Illustrative chart. It shows the size of an assumption, not a prediction for any system. HyreSolar has measured no arrays and holds no production data.
Ranking the inputs
The degradation argument matters less than the rate-inflation argument
Having just spent a section on degradation, here is the honest correction: it is one of the smaller levers on this page. The input that decides your 25-year total is the one you were least invited to think about.
HyreSolar calculation. Changing this model’s rate-inflation assumption from 3% to 5% moves the 25-year nominal total by +30.3%. Dropping it to 1% moves it by −22.1%. Switching the degradation rate from the published median to the published mean is worth −5.2% on the same total. Nothing else on the page comes close to the inflation field. A 25-year savings figure is, to a first approximation, a bet on what electricity prices do, wearing the costume of an engineering calculation.
HyreSolar analysis. This is why the inflation field is the one to be suspicious of in someone else’s model. It is the input with the most leverage, the least visibility and the weakest evidential basis, because nobody knows what your utility will charge in 2044. A seller who wants a bigger number does not need to exaggerate anything you would notice. They need to move one percentage point in a field you never saw.
HyreSolar analysis. There is a second-order problem too. Rate inflation is not a single number applied to your whole bill. Utilities restructure tariffs as well as raising them, and a restructuring can move the value of a solar kilowatt-hour without moving the headline rate at all. The clearest documented example is California’s: under decision D.22-12-056, adopted 15 December 2022, the California Public Utilities Commission replaced NEM 2 with a net billing tariff that compensates exports from the CPUC Avoided Cost Calculator rather than at the retail rate, for customers of PG&E, SCE and SDG&E. Retail rates kept rising. The value of an exported kilowatt-hour did not follow them.
The useful next step. Run this calculator twice — once at the inflation rate the proposal used and once at half of it. If the decision survives both, the inflation assumption is not load-bearing and you can stop worrying about it. If it only works at the higher figure, you are being sold a forecast rather than a system.
Illustrative chart. Relative magnitudes on our own default case only. Your bill, tariff and roof will produce different sensitivities.
Read this against your proposal
Every assumption inside a 25-year savings number
A savings total is six or seven judgement calls compressed into one dollar figure. Here they are, separated out, with the thing that matters most in the last column.
| Assumption | What this calculator does | How it can be inflated | What its absence from a proposal means |
|---|---|---|---|
| Retail rate | Defaults to a named EIA national average with a stated vintage, which you should replace with your own blended rate. | Using the supply line only, or a national average in a cheap state. | The saving is denominated in a rate nobody has checked. Divide your annual bill by your annual kWh and use that. |
| Rate inflation | A figure you set, applied to every year. | A percentage point or two, invisibly. It is the largest lever on the page. | You are looking at a forecast presented as a calculation. Ask what rate was used and why that one. |
| Offset | The share of your consumption the array actually displaces. Defaults below 100%. | Assuming 100% offset, which quietly assumes exports are worth full retail. | The model has probably assumed net metering. Check whether your utility credits exports at retail or below it. |
| Degradation | Applied annually. 0.5-0.6% per year is the published median for crystalline silicon; 0.8-0.9% per year is the published mean. | Taking the median as the expected case and never saying so. | The cash flow is running on the optimistic half of a skewed distribution. Ask which rate was used. |
| Federal credit | Defaults to zero. 26 U.S.C. §25D does not apply to expenditures made after 31 December 2025. | Showing a net price after a 30% credit for a system that will be placed in service after the cutoff. | Potentially the single biggest error in the document. Compare gross prices across every quote. |
| Discounting | None. Totals are nominal, and the page says so. | Presenting an undiscounted 25-year total as though it were money you have today. | A nominal total is a legitimate way to present this. Silently treating it as a present value is not. |
| Maintenance and replacement | Not modelled, and not hidden. Inverters are the usual mid-life cost. | Omitting it entirely from the savings side while including it nowhere else. | Ask what the inverter warranty is and what replacement is expected to cost at that point. |
The last column is the point of the table. Most of these assumptions are defensible; what is not defensible is making them without stating them.
Where our figures come from when sources disagree
When the agency page and the statute disagree, we follow the statute
The savings calculator defaults the federal credit to zero. That is not a stylistic choice about conservatism. It is what the law says, and we can show you where we read it.
Source fact. 26 U.S.C. §25D, the Residential Clean Energy Credit, was amended by Public Law 119-21, §70506 on 4 July 2025. The termination subsection now reads: “The credit allowed under this section shall not apply with respect to any expenditures made after December 31, 2025.” Before that amendment the same subsection carried a termination date of 31 December 2034. The credit was not tapered, stepped down or phased out. It was ended, on a date, by statute.
Source fact. The operative test is not when you signed and not when you paid. An expenditure is treated as made when the original installation of the item is completed, not when the contract is signed and not when the invoice is paid.
HyreSolar analysis. Here is the part worth knowing about how this page is maintained. When we checked the IRS consumer-facing frequently-asked-questions page on energy credits on 2026-09-05, it still described the pre-amendment schedule running to 31 December 2034. Agency explainer pages lag amendments; that is ordinary and it is nobody’s scandal. But it means a homeowner who does the responsible thing — checks the government website — can come away with the wrong answer, and a salesperson who wants to point at something official has one to point at. We read the statutory text instead. The source, the retrieval date and the reason we used a mirror rather than the primary host are all recorded on this page under Data and sources.
The useful next step. Confirm your own position with the IRS or a tax adviser before relying on it — we are not one, and this is not tax advice. But do not accept a net price on a proposal without asking, in writing, what placed-in-service date it assumed.
The document, not the equipment
What a savings estimate has to tell you before it is worth reading
You are not qualified to check somebody’s solar arithmetic and you should not have to be. You are entirely qualified to check whether they showed their working.
- The retail rate it used, and where that rate came from
A blended rate from your own bills, or a named tariff schedule. Not a state average, and not the supply line on its own — delivery charges are frequently the larger half of a residential bill and a solar kilowatt-hour offsets both.
- The rate-inflation figure, stated as a number
The single largest lever in the model. If it is not written down anywhere in the document, the 25-year total is unauditable and you should treat it as marketing.
- The degradation rate, and whether it matches the warranty
Both numbers should appear. A model that assumes less degradation than the manufacturer is prepared to warrant is assuming its way to a better answer.
- The first-year production estimate, with the assumptions behind it
Tilt, azimuth, shading and system losses. NREL’s PVWatts is free, public and selling nothing, and you can put the same roof into it yourself as a cross-check.
- Whether the utility credits exports at retail or below it
This decides whether an offset above your daytime consumption is worth anything. It is a tariff question with a documented answer, not a matter of opinion.
- Gross price, before any credit or incentive is subtracted
The only figure that lets you compare two quotes. A net price is a gross price minus somebody’s assumption about your tax position.
- A savings total quoted with no stated inflation, degradation or offset
This is the failure mode. A single large number, no working, and a signature line. There is nothing to check, which is usually the intention.
- A net price that depends on a federal credit for a 2026 installation
26 U.S.C. §25D does not apply to expenditures made after 31 December 2025. A net price built on that credit is a price nobody can achieve.
The real blind spots
What this calculator cannot do
Not a disclaimer. These are the specific things it does not know, each of which can change the answer by more than the difference between two quotes.
It does not know your roof
Orientation, pitch, shading and the hours of useful sun at your address are the difference between an array that meets its estimate and one that does not. This model takes an offset percentage from you and believes it.
The free public model for that question is PVWatts, published by NREL. It is the same class of tool the industry uses and it is not trying to sell you anything.
It does not know your tariff
It assumes a single flat rate for imports and treats offset as a single percentage. Real tariffs have time-of-use periods, seasonal rates, tiers, fixed monthly charges that solar cannot touch, and minimum bills.
A household on a steep time-of-use tariff and a household on a flat rate can pay the same average price and get materially different value from the same array.
It does not model exports separately
Everything is compressed into one offset figure. Under a net billing tariff, exported and self-consumed kilowatt-hours are worth different amounts, and the split between them is decided by when your household uses electricity.
If you are on, or heading for, a net billing tariff, our net billing calculator handles that gap explicitly and this one does not.
It does not price the system
Savings are only half of the question. A large saving against a large price can be a worse deal than a modest saving against a modest one, and this page does not see the price at all.
Use the proposal analyzer to put two quotes on the same per-watt basis, and the payback calculator to put price and saving in the same sentence.
It does not discount, and it says so
The 25-year figure is nominal — a sum of future dollars in the years they occur. That is a legitimate presentation and it is the one most of the industry uses.
It is not a present value, and it should not be compared like-for-like against money you have today. If that distinction matters to your decision, the arithmetic is on the page and you can do it yourself.
It holds no data about installers or prices
HyreSolar does not install solar, does not lend, is not a utility, and holds no dataset of quotes, bids or completed installations. Nothing here is a price we have observed. That is also why these tools are free to tell you that the answer is to do nothing.
It follows that we cannot tell you whether your quote is good, whether your installer is reputable, or what your neighbours paid. We would rather say that than invent a benchmark.
Important: this is a savings estimate
The savings calculator estimates avoided electricity purchases. It does not automatically account for every factor that affects a real project’s financial return, including:
- Financing terms and dealer fees
- Maintenance and inverter replacement
- Battery storage
- Utility-specific export compensation and net-billing rules
- Fixed utility charges and minimum bills
- Changes to net-metering rules
- Tax circumstances
- Installation costs that vary by property
- Permitting, roof condition, shading and system design
Questions this calculator answers
How much money can solar panels save?
It depends on how much electricity you buy, what you pay per kWh, how much of that a system actually offsets, and what you assume rates do next. In this model a 10,800 kWh home at the EIA US average of 18.44¢/kWh, 85% offset and 3% inflation avoids about $1,693 in year 1 and $57,710 over 25 years, nominal. That is a planning figure, not a quote.
How is solar savings calculated?
Year-1 saving is kilowatt-hours you no longer buy, times your retail rate. Later years grow that figure at the inflation rate you set and reduce it 0.5% a year for module degradation unless you change that. The 25-year total is the sum, in nominal dollars, not discounted. Federal §25D is $0.
Does electricity inflation increase solar savings?
In this model, yes: avoided purchases are valued at a rising retail rate. Vendor tools often default to 5% or 6%, which roughly doubles the 25-year total versus 3%. Use a 2% to 4% band unless you have a reason not to.
What electricity rate should I use?
The blended cents per kWh from your bill. Not a single generation or delivery line. EIA’s May 2026 US residential average was 18.44¢/kWh. California 33.25¢, Hawaii 52.00¢. Illinois is shown from a 2024 profile at 15.87¢ and labelled as such.
Is the solar savings calculator accurate?
It is accurate as bill arithmetic on the inputs you type. It is not accurate as a quote. It ignores export tariffs that pay below retail, fixed charges, financing, shade, roof work and the time value of money. Treat the output as a range of plausibility, not a promise.
How many years should I calculate solar savings?
This tool uses 25 years because that is the usual module performance-warranty horizon. You may not own the house that long. If you will sell sooner, the later years in the 25-year total are not yours.
Does this calculator include the federal tax credit?
No. The Residential Clean Energy Credit (§25D) is not available for property placed in service after 31 December 2025. This calculator applies $0. A lease or PPA provider may still use a different credit; that is their number, not yours.
Does the calculator include battery storage?
No. Storage is a separate purchase with its own economics. This page values avoided retail kWh from an array. It does not model backup hours or time-of-use shifting.
Why does my location affect solar savings?
Retail rates differ by a factor of three across the US in the EIA figures on this page. Export rules differ too, and this model does not apply them. Location also changes production; for kWh at an address use NREL PVWatts, then bring that figure back as usage × offset.
What is a good solar payback period?
There is no universal number. Simple payback here is net cost divided by year-1 saving, and only appears if you enter a cost. It is not discounted and it ignores export tariffs. Compare it to how long you expect to own the house, not to a national average.
Is this the same as NREL PVWatts?
No. PVWatts estimates production at a location. This calculator turns usage, offset and a rate into bill savings. Production is an input, not the product.
Want a more accurate estimate for your home?
Your actual solar savings depend on location, roof, electricity use, utility, system design and incentives you genuinely qualify for. Matching is still being built. The form is an enquiry, not a dispatch line.
Data and sources
- Your first bill after solarOur own measurement: delivery is 53.2% of the residential bill across 14.7 million customers, and panels do not offset delivery.
- How your exports are creditedWhether the offset assumption in this model holds depends entirely on which of the three regimes you are on.
- What the §25D expiry changedWhy this calculator applies a $0 federal credit, and which placed-in-service dates still qualify.
- Panel degradation, measuredThe 0.5%/yr default here is a median; the mean is 0.8%, and twelve years of warranted decline fits inside the measurement tolerance.
- Electricity bills by stateWhere your rate sits, computed from EIA-861. The largest single driver of everything above.
- Time-of-use rates and solarWhat a flat-rate model like this one cannot see, and when it matters.
Written and audited by
HyreSolar Research
Primary-source research, data analysis and fact checking
We are a research desk, not a sales floor. We read the statute, the tariff, the code section, the federal filing or the manufacturer data sheet ourselves, and we publish the figure with the document it came from and the date we retrieved it. Where a number cannot be traced to a primary source, we publish the shorter page and say what we could not verify. That rule has cost us whole sections, and it is the reason the rest can be trusted.
- 160
- primary sources read and cited
- 220
- figures with a retrieval date
- 115
- federal and state government sources
- 66
- researched pages published
How this desk works
- Primary sources only. Statutes from the legislature’s own publishing system, federal data from the agency that collects it, code text from the adopted edition, manufacturer claims from the data sheet. We do not cite an article that cites a source; we go and read the source.
- Every figure carries its provenance. A named document and the date we retrieved it, so you can check it and so you know how old it is. Retrieval dates are not decoration: an EIA rate from May is a different fact from an EIA rate from August.
- We publish what we could not verify. Every research page carries a section naming the things we tried to establish and could not, and why. A paywalled standard, a state website that refused the request, a manufacturer that publishes no figure at all.
- We separate measurement from modelling from our own reasoning, and label which is which on the page. A laboratory measurement, an assumption inside a modelling tool and our own inference are three different kinds of claim and they are never presented as one.
- We do not sell solar, and we take no payment for placement, ranking or a favourable mention. Nobody buys a position on this site.
Data as of 6 August 2026. Authorship on this site is organisational: the analysis belongs to the desk rather than to a named individual, and we do not publish credentials we do not hold. Our editorial policy sets out how we source, date and correct what we publish.
Data and sources
- Electric Power Monthly, Table 5.6.A , U.S. Energy Information Administration. Data period: May 2026 (Illinois: 2024 profile). Retrieved 6 August 2026. Used for: default and location-explorer retail rates.
- Residential Clean Energy Credit (§25D) , Internal Revenue Service. Retrieved 11 August 2026. Used for: applying $0 federal credit after 31 December 2025.
- FAQs on energy provisions modified by Public Law 119-21 , Internal Revenue Service. Retrieved 11 August 2026. Used for: confirming the placed-in-service cutoff.
- PVWatts , National Renewable Energy Laboratory. Retrieved 16 August 2026. Used for: directing production estimates off this page. Not reimplemented here.