If you’ve decided to install a solar panel system then you next step should be determining the percentage of you electric bill you want to off-set. Then you’ll need to determine how many panels you need to do so.

A solar panel calculator is a great way of calculating the size of the solar panel system that’s suited for your needs. Some companies will provide their own solar panel calculators. You just plug in the required values and the calculator goes to work and when it’s done you’ll know the size of the system you’ll need and how much you’ll save on your electric bill each month. But for the sake of your understanding, this article will do a step by step analysis of what that process actually entails.

## How To Calculate Savings

You’ll first need to determine your daily power usage and that’s easily determined. Your monthly electric bill will tell your monthly power consumption. Just locate this value (it will be in kilowatts per hour/kWh) on your electric bill, determine your annual power consumption by adding your monthly energy consumption from the beginning of the year to the end of the year, and then divide your annual energy consumption by 365 days to calculate your average daily energy consumption.

Next use a sun hours map to determine the average number of hours of sunlight your area receive per day. Assuming your daily usage is 30 kWh and you experience 6 hours of sunlight then to cover 100 percent of your energy consumption you need 30 kWh/6 hrs = 5 kW of AC output.

A typical solar panel produces 250-270 watts of power per hours. Now with that in mind you can calculate the number of solar panels you’ll need to produce 5 kW of AC output.

Solar panels produce DC power but you home runs on AC power so the DC power produced by solar panels must be converted to DC power. During the process of conversion about 20% of the power is lost. The ratio of conversion is called the “derate factor” and is denoted by .8. So next divide the AC power you need by the “derate factor” to determine the DC power you need. In this case the calculation is 5kW/.8 = 6.25 kW of DC power.

Convert your DC power to watts (multiply by 1000) and divide that by the wattage of your solar panel and you’ll get the number of solar panel to produce that power. If you’ll be using 250 watt solar panels you’ll need 25 panels.

You can go a bit further and calculate how much you’ll save on you electric bill. But before you do this you must first calculate the power your solar panel system will produce per year. Do this by using the equation: size of your system in kW DC x the .8 derate factor x the number of hours of sun x the number or days in the year.

Plugging in our values we get 6.25 kW x .8 x 6 hrs x 365 days = 10950 kW annually. So each month your solar power will offset 912 kWh of your electric bill. Depending on where you live and the rate you pay your savings could be anywhere between $100 and $250 a month.

The amount you’ll save will depend on how much of your electric bill you decide to offset. In the example we used we covered the entire electric bill, so as expected we saved more.