Cost of Solar Panels Calculator

What the calculator estimates

This cost of solar panels calculator converts an annual energy target into a DC array size, then multiplies that size by an installed price per watt. It is useful for an early budget check. It is not an engineering design, production guarantee, tax opinion, or installer quote.

The U.S. starting values shown in the tool are:

The $2.49/W starting value is an as-of H2 2025 marketplace statistic from EnergySage’s own marketplace data, not an official 2026 national tariff. NREL’s cost benchmarks use a different bottom-up methodology, so they should not be treated as interchangeable with quoted marketplace prices; see NREL’s solar cost-analysis methodology.

For solar resource, use NREL PVWatts Version 8 or an installer model based on your actual tilt, azimuth and shading. A single peak-sun-hours input cannot reproduce an hourly production study.

Exact inputs and formulas

The component applies these equations:

annual_target_kWh = monthly_kWh × 12 × target_offset / 100 system_kW = annual_target_kWh / (peak_sun_hours × 365 × 0.78) gross_cost = system_kW × 1,000 × installed_price_per_W incentive_value = gross_cost × incentive_percent / 100 net_cost = gross_cost − incentive_value low_estimate = gross_cost × 0.85 high_estimate = gross_cost × 1.15

The fixed 0.78 is this site’s conservative aggregate derate. It is not the current PVWatts default. PVWatts V8 exposes separate defaults including 14% system losses, a 1.2 DC/AC ratio and 96% inverter efficiency, and it models weather and temperature explicitly. Those differences are why the two tools can return different sizes from superficially similar inputs. NREL documents the PVWatts V8 inputs and defaults.

The incentive field applies one simple percentage to the entire gross price. It cannot represent dollar caps, refundable versus nonrefundable credits, income limits, eligible-cost exclusions, carry-forwards, depreciation, or different ownership structures.

Worked verification using the displayed defaults

With 900 kWh/month, 100% offset, 4.8 peak sun hours/day, $2.49/W and 0% incentive:

• Annual target = 900 × 12 = 10,800 kWh
• Denominator = 4.8 × 365 × 0.78 = 1,366.56
• Estimated size = 10,800 / 1,366.56 = 7.90 kW
• Gross cost = 7,903 W × $2.49 = $19,679 after component rounding
• Net cost at 0% = $19,679
• Displayed range = $16,727 to $22,630

This example verifies the calculator implementation; it does not say a 7.90 kW system will produce exactly 10,800 kWh at a particular address.

Federal-credit status as of August 25, 2026

The tool starts at 0% because the IRS says the Section 25D residential clean energy credit is not available for property installed after December 31, 2025. See the IRS Residential Clean Energy Credit.

Do not convert a rebate with a dollar cap into a percentage unless you first calculate the eligible dollar amount. Verify program availability with the administering government or utility, then obtain tax advice where needed.

Scope and limitations: what the estimate leaves out

• Roof planes, orientation, local weather, snow and hourly shade
• Inverter clipping, module degradation, downtime and curtailment
• Utility limits on system size and export compensation
• Rounding to an available panel count and inverter model
• Financing interest, dealer fees, escalation and opportunity cost
• Roof replacement, structural work, service upgrades, trenching and batteries
• Whether every quoted cost is eligible for a particular incentive

Use the solar panel output calculator as another screening view, the panel-count calculator to translate kW into modules, and the solar inverter size calculator to test a DC/AC ratio. Final design and pricing should come from site-specific proposals.

Primary references

• NREL PVWatts Version 8 API documentation
• NREL solar technology cost analysis
• IRS energy-credit changes under Public Law 119-21
• EnergySage marketplace data — source of the editable H2 2025 price scenario