How solar savings are estimated
Year-1 savings are the electricity you no longer buy, plus export credit. The calculator takes your yearly production and your annual usage: energy up to your usage is worth your full retail rate, and surplus exported to the grid is credited at half the rate. An 8.4 kW system producing about 11,038 kWh a year at $0.17 per kWh saves about $1,856 in year one — about $155 a month.
Over 25 years the estimate assumes electricity prices rise 3% a year and panels degrade 0.5% a year. Price rises usually win, so lifetime savings for the example above are estimated at about $63,969. That is an estimate over 25 years, not a promise — rates, tariffs and net-metering rules change.
Your savings depend most on your electricity rate and how much of your solar power you use yourself. Self-consumed energy is worth the full retail rate; exported energy is worth much less.
See when savings pass your cost with the payback calculator or the ROI calculator.