Solar guide
Solar calculator methodology
The calculator is designed as a transparent planning tool. This page explains the formulas, default assumptions and limits behind the solar output, savings, payback, ROI, degradation and panel count estimates.
The solar panel cost calculator uses simple inputs that most homeowners can find: system size, panel wattage, peak sun hours, electricity price, export tariff, installed cost, self-consumption and annual degradation. The result is an educational estimate, not an installer quote, engineering design or financial recommendation.
For public references behind these assumptions, see the solar calculator data sources page.
Solar output formula
Estimated annual solar production is calculated as system size in kilowatts multiplied by average peak sun hours per day, multiplied by 365 days, then multiplied by a performance ratio. In plain terms: annual production = system size kW × peak sun hours × 365 × performance ratio. A 5 kW system with 4.5 peak sun hours and an 80% performance ratio produces about 6,570 kWh per year.
Daily output uses the same approach without the 365-day multiplier: system size kW × peak sun hours × performance ratio. Monthly output is shown as an average, normally annual output divided by 12 or daily output multiplied by about 30.4 days. Seasonal output will not be equal every month; summer months usually generate more than winter months.
Performance ratio and peak sun hours
The default performance ratio is 80%. This is a practical allowance for inverter losses, heat, wiring losses, panel soiling, mismatch losses, small shading effects and other real-world factors. A clean, well-designed system may perform better, while a shaded, hot or poorly oriented system may perform worse.
Peak sun hours are not the same as daylight hours. They express the useful solar energy received during a day as an equivalent number of full-strength sun hours. The peak sun hours guide explains how this assumption affects the output calculation and why it should be adjusted by country, region, roof orientation and shading.
Panel count formula
Panel count is calculated as system size in watts divided by panel wattage. The formula is: panel count = system size kW × 1000 ÷ panel wattage. For example, a 5 kW system using 430 W panels needs about 11.6 panels, which rounds to 12 panels before roof layout, setbacks and spacing are considered. The panel count calculator helps translate a target system size into an approximate number of panels.
Savings and export value
The calculator separates solar generation into self-consumed electricity and exported electricity. Self-consumed solar offsets electricity that would otherwise be bought from the grid, so it is valued using the import electricity price. Exported electricity is valued using the export tariff, feed-in tariff or net metering credit entered by the user.
The annual solar benefit is calculated as self-used kWh × electricity import price, plus exported kWh × export tariff. This matters because exported solar is often worth less than self-consumed solar. A household that uses more solar power during the day, charges an EV at home, heats water during sunny periods, or uses a battery may increase self-consumption and improve savings. The solar savings calculator is the best page for testing these assumptions.
Payback and ROI formulas
Simple payback is calculated as installed system cost divided by annual solar benefit. If a system costs 8,500 and produces 1,200 of annual benefit, the simple payback is about 7.1 years. The solar payback calculator focuses on this calculation.
ROI is calculated over the modelled lifetime as ((lifetime benefit - installed cost) ÷ installed cost) × 100. The solar ROI calculator uses the same principle, but the result is still sensitive to future electricity prices, tariff changes, system performance and maintenance costs.
25-year savings and degradation
The calculator models long-term savings by applying annual panel degradation. The default degradation is 0.5% per year. This means the system is assumed to produce slightly less energy each year. The 25-year savings estimate adds the annual benefit over the modelled period and subtracts the installed cost. It is useful for comparing scenarios, but it should not be treated as a guaranteed financial return.
Important limitations
Real solar results vary because roof orientation, roof pitch, shading, inverter sizing, cable losses, panel temperature, dirt, maintenance, installer pricing, grid export limits, VAT or sales tax, grants, incentives, permits, local regulations and tariff structures all affect the outcome. Battery storage can also change the result: it may increase self-consumption, but it adds cost and has its own efficiency losses.
For a stronger estimate, use a real installer quote, your actual electricity bill, your utility export tariff, a realistic peak sun hours value and local rules for incentives or grid connection. The calculator is useful for first-pass planning and comparison, not for final investment decisions.