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Is solar cheaper than grid electricity over time?

Compare the 25-year cost of solar panels versus staying on grid electricity. See your break-even point and total savings with rising utility rates.

What This Calculator Is

A solar versus grid cost calculator compares the long-term costs of solar panel electricity against continuing to buy from the utility grid. It accounts for electricity price increases, solar panel degradation, and maintenance costs to show cumulative savings (or costs) over your solar system's lifetime.

Who This Calculator Is For

Homeowners deciding between solar and grid electricity, those trying to understand when solar becomes cheaper than utility power, and anyone wanting a long-term financial comparison. It helps answer the fundamental question: 'Will solar save me money?'

When to Use This Calculator

Use this calculator when making the solar decision, when electricity rates change significantly, when solar costs decrease (making old calculations outdated), or when evaluating how long you need to stay in your home for solar to make financial sense.

Inputs

$200.00
$25,000.00
90.000%
3.000%
0.500%
$200.00

Results

25-Year Savings

$0.00

25-Year Grid Cost$0.00
25-Year Solar Cost$0.00
Break-Even Year12

Savings estimates depend on your location, utility rates, system performance, and tax situation.

Insights

Solar saves money

Solar saves $43,638.00 over 25 years compared to staying on the grid.

Break-even: Year 12

After breaking even, you're essentially generating free electricity for the remaining years.

How Solar vs Grid Cost Is Calculated

The calculator projects your utility costs over 25 years with inflation, then compares to solar system costs including maintenance. It finds the year when cumulative solar costs become less than cumulative grid costs.

For each year 1..25: yearlyGridBill = monthlyBill*12*(1+inflation%)^(year-1); gridCost25Year += yearlyGridBill
effectiveOffset = solarOffset% * (1-degradation%)^(year-1)
yearlyRemaining = yearlyGridBill*(1-effectiveOffset); solarCost25Year += yearlyRemaining + maintenanceCost
breakEvenYear = first year where cumulative gridCost25Year > solarCost25Year (else 25)
savings25Year = gridCost25Year - solarCost25Year
Where:
monthlyBill (default 180), solarSystemCost (default 18000, added as the initial solarCost25Year base), solarOffset % (default 85), electricityInflation % (default 3), solarDegradation % per year (default 0.5), maintenanceCost $/year (default 150)
Assumptions:
Fixed 25-year horizon
Panel output degrades geometrically each year, reducing effective offset
Maintenance cost is a constant flat annual amount, not escalating
Solar system upfront cost is included as initial 'solarCost25Year', no financing interest

Key Takeaways

  • •Electricity rates have increased about 3% annually on average
  • •Solar panels typically degrade only 0.3-0.5% per year
  • •Include inverter replacement (~$2,000) around year 12-15 in planning
  • •Battery storage can increase savings but adds upfront cost
  • •Net metering policies affect your savings significantly

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