Core Formulas
We believe in showing our work. Below are the primary formulas used to estimate your potential savings and return on investment.
Energy = Production
System Size (kW) × Irradiance × Efficiency × (1 - Losses) × 365
Variables:
- Irradiance: Average daily sun hours (varies by zip code).
- Efficiency: Combined panel (18-22%) and inverter (95-98%) efficiency.
- Losses: Default 14% for shading, wiring, and temperature factors.
ROI Calculation
[(Total 25-Year Savings - Net Cost) / Net Cost] × 100
This standard ROI formula accounts for total lifetime savings minus the initial investment, divided by the investment cost.
Key Assumptions
1. Performance Degradation
Solar panels don't produce 100% power forever. We assume a conservative 0.5% annual degradation. By year 25, your system is estimated to operate at ~87.5% capacity.
2. Electricity Inflation
Utility rates historically rise. We factor in an average 2.5% annual increase in electricity prices, increasing the value of your solar savings over time.
3. System Availability
We assume the grid and your system are online 97% of the time, accounting for occasional maintenance or grid outages.
Data Sources
- NREL (National Renewable Energy Laboratory): Solar irradiance and weather data specific to US locations.
- EIA (Energy Information Administration): Average residential electricity rates by state.
- DSIRE (Database of State Incentives): Information on Federal ITC (30%) and state-specific rebates.
Ready to see your numbers?
Now that you know how it works, calculate your own potential savings.
Start Calculator