How Much Can Solar Panels Save You? Real Numbers by State
By MySolarWidget Team · February 25, 2026 · 8 min read
The most common question homeowners ask before going solar is simple: "How much will I actually save?" The answer depends on four things: your electricity rate, how much sun your location gets, the size of your system, and how you financed it.
Below we break down average solar savings at the national level and by state, explain what drives the numbers, and show you how to calculate your own estimate.
How Solar Savings Are Calculated
Solar savings are straightforward to understand: your system produces electricity that you would otherwise buy from the utility. Every kilowatt-hour (kWh) your panels produce is one you don't pay for.
The basic formula is:
Annual Savings = Annual Solar Production (kWh) × Your Electricity Rate ($/kWh)
Example: A 6 kW system in Dallas, TX producing 8,400 kWh/year × $0.135/kWh = $1,134/year saved.
That same system in Massachusetts, where rates are $0.23/kWh, would save $1,932/year — 70% more savings from the same panels, purely because electricity is more expensive there.
Average Annual Solar Savings by State
These estimates are based on a 6 kW system, average sun hours, and 2024 EIA state electricity rates:
| State | Avg. Rate (¢/kWh) | Annual Production (kWh) | Annual Savings | 25-Year Savings |
|---|---|---|---|---|
| Massachusetts | 23¢ | 7,200 | $1,656 | $57,000 |
| California | 28¢ | 9,000 | $2,520 | $87,000 |
| New York | 21¢ | 7,000 | $1,470 | $50,600 |
| New Jersey | 18¢ | 7,500 | $1,350 | $46,500 |
| Florida | 14¢ | 9,600 | $1,344 | $46,300 |
| Texas | 13¢ | 9,000 | $1,170 | $40,300 |
| Arizona | 13¢ | 10,200 | $1,326 | $45,600 |
| Georgia | 13¢ | 8,400 | $1,092 | $37,600 |
| Colorado | 14¢ | 8,700 | $1,218 | $41,900 |
| Illinois | 14¢ | 6,600 | $924 | $31,800 |
25-year savings assumes 4%/year electricity rate increase, which is the historical average.
Why Electricity Rate Increases Multiply Your Savings
Your solar payment stays fixed. Your utility bill without solar would have kept rising. This gap is where the biggest long-term value is created.
US electricity rates have increased an average of 3–4% per year since 2000. At that rate, a $0.15/kWh rate today becomes $0.24/kWh in 15 years and $0.30/kWh in 25 years.
Meanwhile, your solar loan payment (or zero-cost production if you paid cash) stays the same. A 6 kW system saving $1,200/year today will save $1,800+/year in year 15 — with the same panels on the same roof.
This is why the 25-year savings numbers in the table above are so much larger than 25× the year-one savings: the value accelerates over time.
Factors That Affect Your Personal Savings
Several variables determine whether your savings will be higher or lower than the state averages above:
Net Metering Policy
Net metering credits you at the full retail rate for excess solar energy exported to the grid. States with strong net metering (California, New Jersey, Massachusetts) maximize your savings. States that pay wholesale rates (Florida, Nevada under older policies) reduce them.
Time-of-Use (TOU) Rates
Many utilities now charge different rates by time of day. If your rate is highest from 4–9 PM (when solar production drops), a battery can shift your solar energy to that window — increasing effective savings.
Roof Orientation and Shading
South-facing roofs capture the most sunlight. East/west-facing roofs produce 15–20% less. Partial shading from trees can reduce output by 10–30% depending on severity and panel/inverter configuration.
System Size vs. Your Usage
A properly sized system should offset 80–100% of your annual usage. Oversizing wastes money if net metering pays less than retail; undersizing leaves money on the table.
Total Lifetime Value of Solar
Looking at solar purely through the lens of annual electricity savings undervalues it. Consider the full financial picture:
- Electricity savings (25 years): $28,000–$65,000
- Home value increase: Average $15,000 on a $300K home (Zillow 2024)
- Property tax exemption: 36 states exempt the added home value from property taxes
- SRECs (where applicable): $300–$600/year in NJ, MA, MD, PA
Total economic value over 25 years for a well-placed system in a high-rate state can easily exceed $80,000.
Want to calculate your numbers? Our Solar Savings Calculator uses real NREL production data and your state's current electricity rate to give you a personalized estimate in under 2 minutes.
Frequently Asked Questions
How much does solar reduce your electric bill?
A properly sized system reduces your electric bill by 70–100%. Most homeowners see bills drop from $150–$250/month to $10–$30/month (the utility's base connection fee). If you pay cash or have a short-term loan, savings exceed payments quickly.
How long does it take for solar to pay for itself?
The average US payback period is 7–12 years. In high-rate states like MA, CA, and NJ, it's 6–8 years. In low-rate states like Louisiana or Idaho, it can be 12–15 years.
Do solar panels increase home value?
Yes. A 2024 Zillow study found homes with solar sell for 3–4% more on average. For a $400,000 home, that's $12,000–$16,000 in added value. In 36 states, this added value is exempt from property taxes.
What is net metering and how does it affect savings?
Net metering credits you at the retail electricity rate for excess solar power you export to the grid. Without net metering, excess production is wasted or paid at a lower wholesale rate. States with strong net metering policies significantly increase your solar savings.