Solar vs Grid Electricity Cost Calculator
Compare 25-year Levelized Cost of Energy (LCOE) between clean rooftop solar and escalating electric utility grid rates.
Grid Rates & Solar Economics
Levelized Cost of Energy (LCOE) Formula
Solar LCOE ($/kWh) = Net System Cost ÷ 25-Year Lifetime Solar Generation (kWh)- Solar LCOE: Fixed per-kWh cost of solar energy calculated by dividing net initial cost by lifetime generation (accounting for 0.5% annual panel degradation).
- Escalating Grid Cost: Current utility rate compounded annually by utility inflation (historically 3.0% to 4.5%/year in the US).
- Lifetime Net Savings: Total avoided utility bills minus net solar installation cost.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Solar panels degrade at standard rate of 0.5% output reduction annually.
- Assumes full 1:1 net metering or self-consumption offset of grid power.
Frequently Asked Questions
What is Levelized Cost of Energy (LCOE)?
LCOE measures the true all-in cost per kilowatt-hour of building and operating an energy system over its entire operating lifetime, allowing a direct apples-to-apples comparison between self-generated solar and utility grid power.
Related Cost Calculators
kWh Cost Calculator
Calculate the total cost of any quantity of kilowatt-hours (kWh) across hours, days, months, and years at your exact utility rate.
Solar Panel Savings Calculator
Calculate your monthly and 25-year cumulative electric bill savings from residential solar panels, factoring in utility rate inflation and optional loan financing.
Solar System Cost Calculator
Calculate the gross quote price and net out-of-pocket investment for home solar systems, including the 30% federal clean energy tax credit (ITC) and local rebates.