How Much Electricity Does a Solar System Produce?

A kilowatt is not a kilowatt-hour

The most common confusion in solar is between the size of a system and the energy it makes. A kilowatt is a rate: the power a system can deliver at a given moment, under test conditions, on a clear day. A kilowatt-hour is an amount: one kilowatt delivered for one hour, and the unit the electric meter charges for. A system rated at 8.4 kilowatts does not make 8.4 kilowatt-hours every hour. It makes 8.4 kilowatts at noon on a clear day, less in the morning, less in the afternoon, nothing at night, and less again on a cloudy day. The question that matters for the bill is how many kilowatt-hours the system makes in a year, and that number is set by the sun over the roof, not by the label on the panels.

The standard way to estimate it is the method NREL built into PVWatts, its free calculator, which simulates a system against real weather data for the location. The arithmetic at the heart of it is simple enough to do on paper: annual production equals the system size in kilowatts, times peak sun hours per day, times 365 days, times one minus the system losses. Peak sun hours are not hours of daylight. They are the equivalent hours at full sun, 1,000 watts per square meter, that deliver the same total energy as the real day's varying sunshine. A place with 4.5 peak sun hours gets, in effect, four and a half hours of full sun a day, spread across the whole day. PVWatts' default allowance for total system losses is 14 percent, covering the inverter, wiring, soiling, shading from distant obstructions, mismatch between panels, and the initial light-induced degradation of the modules. This calculator uses exactly that 14 percent, as a factor of 0.86, and it says so on the tool page, so the production figure can be checked rather than trusted.

At 4.5 sun hours, one kilowatt makes 1,413 kilowatt-hours a year: 1 times 4.5 times 365 times 0.86. An 8.4 kilowatt system makes 11,865 kilowatt-hours in year one. That sits in the middle of the range PVWatts-based guides report for the United States, roughly 1,000 to 1,800 kilowatt-hours per kilowatt per year, with Arizona near the top at 1,755 and Seattle near the bottom at 1,088. The agreement is reassuring but not exact, and the difference is instructive: the guides use local weather files, with real cloud cover, temperature, and snow, while the calculator uses a single sun-hours figure the user enters. The calculator's figure is a planning estimate. The PVWatts figure, run for the actual address with the actual roof angles, is the estimate to sign against.

Production by sun hours, on the same kilowatt

The table below shows what one kilowatt makes in a year at six sun-hour levels, and what the default 8.4 kilowatt system makes at each. The relationship is linear: every extra sun hour adds 313 kilowatt-hours per kilowatt per year, before degradation. Sun is the multiplier, and it is the one input the homeowner cannot change.

Regional labels are representative annual averages, not measurements of any roof. A roof facing east instead of south, a ridge shaded by an oak after 3 p.m., or panels laid flat on a low-slope roof will all produce less than the table, and a steep, south-facing, unshaded roof will produce a little more. PVWatts cannot model detailed shading from nearby trees or buildings, which is why a site survey matters for a final number. The table's job is to show the scale of the sun's effect: the same system makes 9,229 kilowatt-hours in Seattle conditions and 15,293 in Phoenix conditions, a 66 percent difference, before any difference in electricity rate is considered. When the rate difference is added, Hawaii at 48 cents and Washington at 14 cents, the combined spread is what makes the state payback table in the companion article run from 4.52 years to 18.61 years.

Degradation, heat, and the slow decline

Panels lose output gradually, at about 0.5 percent a year over the long term, according to NREL's PVWatts documentation. The calculator applies that rate every year: the default system makes 11,865 kilowatt-hours in year one, 11,630 in year five, 11,342 in year ten, 11,061 in year fifteen, 10,788 in year twenty, and 10,521 in year twenty-five. Year 25 production is 88.7 percent of year one. That decline is already in the payback and the 25-year net. It is small enough to ignore in a single year and large enough to matter over 25, which is why calculators that hold production flat for 25 years overstate the return, quietly, by a few thousand dollars.

Heat cuts output too, and it cuts it on the days the sun is strongest. Panels are rated at 25 degrees Celsius, and their output falls as the cell temperature rises above that, which is why the hottest day of the year is rarely the most productive day. High-altitude and coastal locations can outperform hotter inland ones at the same latitude, because cooler cells and clearer air beat raw sunshine. Snow has the opposite pattern: it blocks production while it sits, and it slides off tilted panels, often leaving a clean surface behind. None of these effects is in the calculator's flat 14 percent loss allowance as a separate line. They are the reason the allowance exists, and the reason an installer estimate based on a weather file is worth more than a sun-hours figure typed from memory.

Panel warranties reflect the same slow decline. Panels typically carry 25-year performance warranties, guaranteeing a floor on output at year 25, alongside shorter product warranties on materials and workmanship. The inverter warranty is shorter, commonly 10 to 12 years, which is why this calculator charges a $2,500 inverter replacement in year 12. The inverter is the part that is expected to be replaced once in the system's life. Budgeting for it in advance is what keeps the payback honest. A quote that promises 25 years with no replacement cost is promising a part that does not exist.

How to check an installer's production estimate

Ask for three things. First, the expected annual production in kilowatt-hours for year one, not just the system size. Second, the weather source and the loss assumptions behind it, including whether shading was measured or assumed away. Third, the degradation rate used for later years, and whether the 25-year production total in the quote falls by roughly 0.5 percent a year. Then run the same size and sun hours through this calculator and compare. If the installer's figure is within about 10 percent of the calculator's, the two estimates agree within the uncertainty of weather and roofs. If it is 20 or 30 percent higher, ask what sun hours, what losses, and what shading were assumed, because one of the three is doing work it should not be doing. Production estimates are where solar sales are won and lost, and they are also where they are most easily inflated, because the homeowner cannot verify a kilowatt-hour until the meter has run for a year. The estimate should be able to survive a question before it has to survive a year.

One final check belongs to the household itself. Production that arrives at noon is worth the retail rate only if the house uses it at noon, or if the utility pays retail for it. Production used at home displaces a retail kilowatt-hour. Production exported is worth the export credit, which may be half the retail rate or less. A system sized to 150 percent of annual use does not save 150 percent of the bill. It saves 100 percent of the bill, at best, plus the export value of the surplus. Sizing to annual use, as the calculator's sizing button does, is the discipline that keeps production estimates honest, and it is the reason the production article and the payback article are the same article, told twice: one in kilowatt-hours, once in dollars.

How Much Electricity Does a Solar System Produce? questions

How much electricity does a 8 kW solar system produce per year?

At 4.5 peak sun hours with 14 percent system losses, an 8 kW system makes about 11,300 kWh in year one. The 8.4 kW default in this calculator makes 11,865 kWh. Local sun hours move the figure from about 9,229 kWh in Seattle conditions to 15,293 kWh in Phoenix conditions.

What are peak sun hours?

The equivalent hours at full sun, 1,000 watts per square meter, that deliver the same energy as a real day's varying sunshine. About 3.5 in Seattle, 4.5 in Chicago, 5.0 in Denver, and 5.8 in Phoenix, as representative annual averages.

How fast do solar panels degrade?

About 0.5 percent a year over the long term, per NREL PVWatts documentation. The default system falls from 11,865 kWh in year one to 10,521 kWh in year 25, or 88.7 percent of its first-year output.

Keep reading

• How Much Do Solar Panels Cost in 2026?System-size prices at the 2026 median rate, and what moves a quote.
• How Long Until Solar Panels Pay for Themselves?The state payback table, and the four levers that move it.
• Are Solar Panels Worth It Without the Tax Credit?What the ended credit was worth, and what is left.
• How Much Can Solar Panels Save on Your Electric Bill?Self-use, export credit, and rising rates over 25 years.
• Solar Panel Payback CalculatorPrice the system, the saving, and the payback for your own roof.