Solar Panel Guide: Sizing, Cost & Payback Calculator
How Solar Sizing Works
Solar system size depends on:
- Monthly kWh usage (from your electric bill)
- Peak Sun Hours (PSH) for your location (4–6 hours/day average US)
- System losses (typically 14–20% for inverter, wiring, soiling, shading)
System size (kW) = Monthly kWh / (PSH × 30 × (1 − losses))
Peak Sun Hours by Region
| Region | Peak Sun Hours/Day | Annual kWh/kW |
|---|---|---|
| Arizona, Nevada | 6.0–6.5 | 1,600–1,800 |
| California | 5.0–6.0 | 1,400–1,700 |
| Texas, Florida | 4.5–5.5 | 1,300–1,500 |
| Southeast US | 4.0–5.0 | 1,200–1,400 |
| Midwest US | 3.5–4.5 | 1,100–1,300 |
| Northeast US | 3.5–4.0 | 1,000–1,200 |
| Pacific Northwest | 3.0–3.5 | 900–1,100 |
Solar Panel Specifications
| Panel Wattage | Size (approx) | Panels for 6 kW | Roof Area Needed |
|---|---|---|---|
| 350W | 69" × 39" | 18 panels | 340 sq ft |
| 400W | 72" × 40" | 15 panels | 300 sq ft |
| 450W | 78" × 41" | 14 panels | 295 sq ft |
| 500W | 82" × 44" | 12 panels | 280 sq ft |
Solar System Cost (2024)
| System Size | Cost Before ITC | After 30% ITC | Monthly Savings | Payback |
|---|---|---|---|---|
| 4 kW | $10,000–$14,000 | $7,000–$9,800 | $65–$95 | 7–10 years |
| 6 kW | $14,000–$20,000 | $9,800–$14,000 | $95–$140 | 7–10 years |
| 8 kW | $18,000–$26,000 | $12,600–$18,200 | $130–$190 | 7–10 years |
| 10 kW | $22,000–$32,000 | $15,400–$22,400 | $160–$240 | 7–10 years |
Federal ITC (Investment Tax Credit): 30% of total system cost through 2032, then 26% in 2033, 22% in 2034. Includes panels, inverters, racking, wiring, and installation labor.
Worked Example
Home: 900 kWh/month in Texas, 5.0 PSH, $0.14/kWh rate.
Step 1: System size = 900 / (5.0 × 30 × 0.82) = 900 / 123 = 7.3 kW
Step 2: Panels = 7,300 / 400W = 18.3 → 19 × 400W panels
Step 3: Cost = 7.3 × $2.80/W = $20,440 before ITC
Step 4: After 30% ITC: $20,440 × 0.70 = $14,308
Step 5: Monthly savings = 900 × $0.14 = $126
Step 6: Payback = $14,308 / ($126 × 12) = 9.5 years
Inverter Selection
| Inverter Type | Efficiency | Cost | Best For |
|---|---|---|---|
| String inverter | 96–98% | $0.10–$0.15/W | Unshaded roofs, simple layouts |
| Microinverters | 95–97% | $0.20–$0.35/W | Shaded roofs, complex layouts |
| Power optimizers | 97–99% | $0.15–$0.25/W | Partial shade, panel-level monitoring |
Common Solar Mistakes
- Not checking roof condition: If your roof needs replacement within 10 years, replace it first. Removing and reinstalling panels costs $1,500–$3,000.
- Ignoring shading: Even partial shade on one panel reduces the entire string's output (with string inverters). Use microinverters for shaded roofs.
- Oversizing vs net metering: Some utilities don't pay retail rate for excess generation. Size for 80–100% of usage, not more.
- Forgetting about batteries: Grid-tied solar without batteries doesn't work during outages. Add batteries ($10,000–$15,000) for backup power.
Standards Reference
- NREL — National Renewable Energy Laboratory (solar data)
- NEC Article 690 — Solar Photovoltaic Systems
- NEC 705 — Interconnected Power Sources
- DOE — Solar Energy Technologies Office
Frequently Asked Questions
How many solar panels do I need for a house?
Average US home (886 kWh/month) needs about 15–20 panels (400W each) or 6–8 kW system. In sunny states (AZ, CA), fewer panels are needed. In cloudy states (WA, OR), you may need 25% more. Check your monthly kWh and divide by your area's peak sun hours.
How much do solar panels cost in 2024?
Residential solar costs $2.50–$3.50 per watt before incentives. A typical 6 kW system costs $15,000–$21,000 before the 30% federal tax credit. After the ITC: $10,500–$14,700. State incentives and net metering can further reduce costs.
What is the federal solar tax credit?
The Investment Tax Credit (ITC) gives you 30% of total solar system cost as a tax credit through 2032. It reduces to 26% in 2033 and 22% in 2034. Unlike a deduction, a credit directly reduces your tax bill. If you owe less in taxes than the credit, you can carry it forward.
How long do solar panels last?
Solar panels have a 25–30 year warranty and typically last 30–40 years. They degrade about 0.5% per year — after 25 years, they produce about 87% of their original output. Inverters last 10–15 years and may need one replacement during the panel's lifetime.
Do solar panels work on cloudy days?
Yes, but at reduced output — typically 10–25% of full sun capacity. Germany (notoriously cloudy) is one of the world's top solar producers. Solar panels actually work slightly more efficiently in cool temperatures, so a cloudy cool day can produce almost as much as a hot sunny day.