Solar vs. Grid Electricity Cost Comparison
Compare the total cost of going solar versus staying on the grid over time. Enter your bill, system cost, and rate increases to see lifetime savings and payback period.
Monthly Electric Bill
Your current average monthly electricity bill. Use a 12-month average if your usage swings seasonally.
Solar System Cost
The net cost of the solar system after the 30% federal tax credit and any local incentives. A typical 6–8 kW residential system nets $15,000–$22,000.
Solar Offset
The share of your electricity usage the solar system is designed to cover. Most systems are sized for 80–100% of annual usage.
Annual Utility Rate Increase
How much grid electricity prices rise each year. U.S. residential rates have climbed roughly 3–4% per year over the past two decades.
Comparison Period
How many years to compare. Most solar panels carry a 25-year performance warranty, so 25 years is a common benchmark.
Solar vs. Grid Over 25 Years
Save $41,064
$65,627 on the grid vs. $24,563 with solar
Solar wins by $41,064 over 25 years
This compares total cash spent under each path. Staying on the grid costs $65,627 as rates rise 3% per year; going solar costs $24,563 (system plus any remaining bill). It does not include financing interest, net-metering credits for excess production, or panel degradation.
Estimate only. Assumes the grid bill escalates at a constant annual rate and the solar system is paid for up front. Actual results depend on financing, local rates, net-metering rules, incentives, and system performance.
💡About this calculator▼
All you need to start is your monthly electric bill. The question behind every solar decision comes down to a head-to-head: over the years ahead, will you spend less by staying on the grid or by installing panels? The two paths have completely different cost shapes. Grid electricity is a small payment every month that quietly grows as utility rates climb. Solar is a large payment up front that mostly erases those monthly bills afterward. Add each path up over time and you get two very different totals.
This calculator puts those two totals side by side. Enter your current bill, the net cost of a solar system, how much of your usage solar would cover, and how fast you expect utility rates to rise. It then tallies every dollar you'd spend under each scenario and shows the bottom line: your total cost staying on the grid, your total cost going solar, and the difference between them.
This is the quick, bill-based gut check — the version you can run with nothing more than a utility statement in hand. If you already have an installer's proposal with your system size, expected production, and panel specs, our Solar Payback Period calculator runs a more detailed engineering-based analysis (production, degradation, ROI, and a precise payback year). Use this tool to decide whether solar is worth pursuing at all; use that one to scrutinize a specific quote.
Solar's value comes almost entirely from avoiding future grid bills — and those bills are a moving target. The single biggest driver of long-term savings is how fast utility rates rise. A bill that grows 3% per year doesn't sound dramatic, but compounded over 25 years it more than doubles. That escalating cost is exactly what a solar system locks out.
This comparison models two timelines side by side. In the grid-only scenario, you pay your electric bill every year, and that bill grows by the rate-increase percentage annually. Add up every year and you get the total amount you'd hand the utility over the comparison period.
In the solar scenario, you pay the system's net cost up front (after any state, local, or utility rebates you qualify for), and from then on you only pay for the portion of your usage solar doesn't cover. If your system offsets 90% of usage, you still owe 10% of each year's escalating bill. The total cost with solar is the up-front system price plus all those smaller remaining bills.
The headline result is the difference between those two totals — your net lifetime savings. That single number answers the core question: across the whole period, does solar leave more money in your pocket than the grid, and by how much? As a secondary reference point, the tool also notes the rough payback year (when accumulated savings first cover the system cost), but the comparison itself is about the two grand totals, not the break-even date.
What the model deliberately keeps simple: it assumes you pay cash for the system (no loan interest), that your offset percentage holds steady, and that rates rise at a constant pace. Real installations involve financing, net-metering credits, and gradual panel degradation — all covered in the situations below.
📐How it's calculated▼
The calculator runs a year-by-year loop over your comparison period.
For each year: Bill that year = Annual bill × (1 + rate increase) ^ (year − 1) Remaining bill with solar = Bill that year × (1 − offset %)
Running totals: Grid-only cost = sum of every year's full bill With-solar cost = system cost + sum of every year's remaining bill
The comparison (the headline): Lifetime savings = Grid-only cost − With-solar cost
Secondary reference: Payback period = the year your accumulated savings first reach the system cost
Example: $150/mo bill, $18,000 system, 90% offset, 3% annual rate increase, 25 years
→ Grid-only cost (25 yrs): ≈ $65,627
→ With-solar cost (25 yrs): ≈ $24,563 ($18,000 system + ~$6,563 of remaining 10% bills)
→ Lifetime savings: ≈ $41,064
→ Payback period: ≈ 9.7 years
After year 10, the solar system has paid for itself and everything saved after that is money in your pocket.
📎Source: U.S. Energy Information Administration (EIA) — Electricity Rate Data
🔍Finding your inputs▼
Monthly Electric Bill: Your current average monthly electricity bill in dollars. Because usage swings with the seasons — air conditioning in summer, heating in winter — use a 12-month average rather than a single month. Add up twelve months of bills and divide by twelve. This figure drives everything: the higher your current bill, the more solar has to save.
Solar System Cost: The net price you'd actually pay — not necessarily the sticker price. Important: the 30% federal residential clean energy tax credit (Section 25D) expired on December 31, 2025, so systems installed in 2026 or later no longer earn a federal credit. Enter the installer's price minus only the state, local, or utility rebates you actually qualify for. A typical 6–8 kW residential system runs roughly $18,000–$28,000 installed before any rebates. If you're still factoring in a 30% federal credit out of habit, don't — that money is no longer on the table for new installs.
Solar Offset: The percentage of your annual electricity usage the system is designed to cover. Installers usually size systems for 80–100% of usage. Going above 100% is often discouraged because many utilities don't pay full retail rate for excess production. If you don't know your target offset, 90% is a reasonable default — it covers most usage while avoiding overbuilding.
Annual Utility Rate Increase: How much you expect grid electricity prices to rise each year. This is the most important — and most uncertain — assumption in the whole comparison. U.S. residential electricity prices have risen roughly 3–4% per year over the past two decades, though some regions (California, the Northeast) have seen faster increases. Use 3% for a conservative estimate; try 4–5% to see how solar looks if rates climb faster.
Comparison Period: How many years to run the comparison. Most solar panels carry a 25-year performance warranty, making 25 years the standard benchmark. Use a shorter period (10–15 years) if you might move soon, or a longer one (30 years) since quality panels often outlast their warranty.
⚠️Special situations▼
I'm financing the system with a solar loan, not paying cash
This calculator assumes you pay for the system up front, so it does not include loan interest. Financing changes the picture: a loan spreads the cost over time but adds interest, which reduces net savings and can push back the payback point. As a rough adjustment, add the total interest you'd pay over the loan term to the system cost field. An $18,000 system financed at 7% over 15 years might cost roughly $11,000 in interest — so enter something closer to $29,000 to approximate the financed scenario. Many loans still net positive savings because the monthly payment is lower than the grid bill it replaces.
My utility offers net metering for excess production
If your system produces more than you use at times (sunny afternoons), net metering credits that excess against the power you draw at night. Full retail net metering effectively raises your real offset toward or past 100%, improving savings beyond what this calculator shows. But many utilities have shifted to lower "avoided cost" rates or net billing, where excess is worth far less than retail. Check your utility's current policy — it materially affects the value of sizing a system above your usage.
Solar panels lose output as they age
Panels typically degrade about 0.5% per year, so a 25-year-old system produces roughly 88% of its original output. This calculator holds your offset percentage constant and does not model that gradual decline, so it slightly overstates very-long-term savings. For a more conservative estimate, set your offset a few points lower than your day-one design (e.g., 85% instead of 90%) to approximate the average over the system's life.
Grid electricity is cheaper in my comparison
If the result shows the grid winning, the usual culprits are a high system cost relative to a low electric bill, a low assumed rate increase, or a short comparison period. Solar economics favor homes with high electricity usage in areas with high or fast-rising rates. If your bill is small and local rates are low and stable, the long payback may not justify the up-front cost — though non-financial factors like energy independence and emissions may still matter to you.
I might sell my home before the system pays off
If you may move within a few years, set the comparison period to your expected time in the home. Solar can still pay off indirectly: studies have found that owned (not leased) solar systems tend to increase home resale value, often recovering a meaningful share of the remaining system value. Leased systems are different and can complicate a sale. If a move is likely, weigh the shorter-horizon payback against the potential resale premium for an owned system.
❓Common questions▼
Does this calculator account for the federal solar tax credit?
Here's the important update: the 30% federal residential clean energy tax credit (Section 25D) expired on December 31, 2025 under the 2025 budget law, so systems installed in 2026 or later no longer earn a federal credit. When you enter your net system cost, subtract only the state, local, or utility rebates you actually qualify for — don't deduct 30% out of habit. The good news is that solar can still pay off purely on rising utility rates and the rebates many states and utilities continue to offer. If your system was placed in service before 2026, you may still claim the old credit (and carry forward any unused portion) on that year's taxes.
What utility rate increase should I assume?
U.S. residential electricity prices have risen roughly 3–4% per year on average over the past two decades, so 3% is a reasonable conservative default. Some regions see faster increases — California and parts of the Northeast have at times exceeded 5%. Because this is the most influential and most uncertain input, run the comparison at a few different rates (2%, 3%, 5%) to see how sensitive your result is. If solar wins even at a low rate increase, the decision is robust.
How is this different from a solar payback period calculator?
This tool is the simple, bill-based comparison: enter your monthly electric bill and a system price, and it shows the total cost of staying on the grid versus going solar side by side, plus the difference. It needs nothing technical. A dedicated payback period calculator works the other direction — you feed it your system size, expected annual production, panel degradation, and incentives to get a precise, engineering-based payback year and ROI. Use this one for the early "is solar worth it for me?" question; use a payback calculator to scrutinize a specific installer quote once you have one.
Is buying solar better than leasing or a power purchase agreement (PPA)?
This calculator models buying the system outright, which generally produces the largest lifetime savings because you own the asset and there's no third-party margin baked into your rate. Note that with the federal residential credit now expired for 2026 installs, buying no longer comes with a 30% federal tax break — but a third party that leases you panels can still claim the commercial clean energy credit (Section 48E, available through 2027) and may pass some of that benefit through in a lower rate. Even so, owning usually still wins on total lifetime cost because leases and PPAs let the provider keep part of the value, and owned systems tend to add more resale value. To approximate a financed purchase, add estimated loan interest to the system cost field.
Does this include maintenance and inverter replacement costs?
No. The model assumes the system runs without added costs after installation. In reality, solar maintenance is low — panels have no moving parts — but the inverter typically needs replacement once during a 25-year span, often $1,000–$2,500. If you want to be thorough, add an estimated inverter replacement to the system cost field. Occasional cleaning and rare repairs are usually minor by comparison.