How Solar Panels Save You Money
Solar savings come from two sources. First, you reduce the amount of electricity you buy from the grid by using your own solar power during the day. Second, any excess electricity you don't use can be exported to the grid for a payment (often called a feed-in tariff or export rate). The balance between these two depends on when you use electricity and whether you have a battery to store daytime generation for evening use.
How We Calculate Your Savings
The calculator estimates your annual generation based on system size and local sun hours, then splits this between self-consumed and exported electricity using standard self-consumption ratios (roughly 45% without a battery, 80% with one). Self-consumed electricity saves you the full retail rate; exported electricity earns the lower export rate. We project savings over 25 years accounting for 0.5% annual panel degradation and 3% annual electricity price increases.
Why 25-Year Savings Can Be Surprisingly High
Most people underestimate their long-term savings because they think in today's prices. But electricity costs tend to rise over time—historically by 3–5% per year in most countries. A system that saves you $1,200 in year one might save you $2,000 per year by year 15, simply because the electricity you're avoiding has become more expensive. Over 25 years, this compounding effect can mean total savings of 3–5 times the initial installation cost. This is why solar panels are often described as a hedge against rising energy costs.