Every installer I talked to during my quote process asked for my last electric bill. One asked for the past 12 months. Only one actually explained what they were doing with that number — and that one ended up being the installer I trusted most.
Sizing a solar system isn’t complicated math. But installers rarely walk you through it, which means most homeowners accept whatever system size they’re quoted without understanding whether it actually fits their situation. Here’s the calculation, step by step, so you can verify what you’re being sold.
Step 1: Find Your Annual kWh Consumption
Log into your utility’s online account and pull your month-by-month usage for the past 12 months. Add them up. That’s your annual baseline.
Mine was 9,148 kWh before I added the Bolt EV. After the EV it climbed to 12,405 kWh — a 35% jump that required revisiting the system size calculation entirely.
Critical note on future loads: If you’re planning to add an EV, heat pump, or pool pump in the next 3–5 years, size for that future consumption now. Adding panels later costs more per watt than including them in the original installation.
Step 2: Find Your Peak Sun Hours
Peak sun hours (PSH) is the standardized measure of solar energy available per day at your location, expressed as equivalent hours of full-intensity sunlight. Find your location’s value using NREL’s PVWatts calculator — a free tool that uses decades of weather data.
Approximate PSH values for major US cities:
- Phoenix, AZ: 5.7
- Austin, TX: 5.1
- Los Angeles, CA: 5.6
- Denver, CO: 5.0
- Atlanta, GA: 4.7
- Chicago, IL: 4.1
- Boston, MA: 4.2
- Seattle, WA: 3.5
Step 3: Calculate Raw Panel Output
A 400W panel in a location with 5.1 PSH produces: 400W × 5.1 hours = 2,040 watt-hours = 2.04 kWh per day × 365 days = 744 kWh per year (before losses)
Step 4: Apply the System Loss Factor
Real-world solar systems don’t perform at nameplate capacity. Losses from wiring resistance, inverter conversion, temperature effects, dust, and shading typically reduce output by 15–25%. The industry uses a “derate factor” of 0.75–0.85 for system design.
Using 0.80 (a common conservative default): 744 kWh/year × 0.80 = 595 kWh per year per 400W panel
Step 5: Calculate System Size Needed
Target: cover 90% of annual consumption (a common design goal — covering 100% is often uneconomic due to excess summer production):
12,405 kWh × 0.90 = 11,165 kWh target annual production
Panels needed: 11,165 ÷ 595 = 18.8 panels → round up to 19 panels at 400W = 7.6kW system
My installed system is 9.6kW (24 panels × 400W). The additional capacity was sized partly to accommodate further load growth and partly because my roof orientation allowed more panels than the minimum required.
Step 6: Check the Production-to-Consumption Ratio
Most utilities cap net metering eligibility at 100–120% of annual consumption. A system producing significantly more than your consumption generates excess credits that may be compensated at below-retail avoided-cost rates — reducing the value of the overage.
The sweet spot: size to cover 90–110% of annual consumption. Over-sizing beyond 120% typically doesn’t make financial sense unless your utility has unusually favorable export rates.
What to Do With This Calculation
When you get an installer quote, ask: “What annual consumption are you basing this system size on, and what production estimate did you use?” If their answer matches your 12-month consumption figure and uses a realistic derate factor, their sizing is credible. If they’re using a one-month bill or a generic assumption, the sizing may be off — and an oversized system costs more without delivering proportional savings.
The spread I found across six installer quotes partly reflected different sizing assumptions. The installers who asked for and used real consumption data produced more accurate and consistent estimates.
— Allen
