How to Size a Solar System: Step-by-Step (2024 Guide)

One of the biggest questions homeowners have when switching to solar is what size solar system they need. The truth is, there’s no one-size-fits-all solution when it comes to solar power, and that’s why every solar system we provide is customized. That said, there are a few ways you can estimate the number of solar panels you need to power your house on solar energy. 

In this guide, we take you through a step-by-step process on how to size a solar system, including different factors that can affect how many solar panels your home needs.

Sizing a solar system: step-by-step process

Sizing solar system involves calculating the specific setup you’ll need to generate, store, and provide the amount of electricity you need to power your home. You’ll want your solar power system to be sized according to your expected energy usage, solar goals, and the space available to you. 

There are a few steps involved when sizing a solar system: 

• Step 1: Calculate your household’s energy usage

• Step 2: Look up how much sunlight your area receives

• Step 3: Understand your utility rate plans
• Step 4: Calculate the size of your solar system.

If you want to calculate your solar panel size yourself, be prepared to do a few simple math equations. If that sounds like too much work, the easiest thing to do is reach out to a professional solar installer who can provide you with a free solar evaluation and quote. 

Step 1: Calculate your household’s energy usage

The first step when sizing a solar system is calculating how much energy your household currently uses. The best way to do this is to look through your utility bills. We recommend looking over your electricity bills from the last year to get an accurate estimate, as your energy usage is likely to vary depending on the season and time of year. If that information isn't available to you, just use the bills you have access to as a reference. 

Next, you’ll want to add up your total usage by the number of days covered. For example, if you looked at utility bills for 12 months, you’ll want to add up the total and divide it by 365 to get your daily average. If you don’t have access to your most recent bill, you might want to call your utility company and see if they can help you estimate your daily usage. Another useful but rough method is to ask a neighbor who has a similar home size, daily habits, and number of occupants. Keep in mind that depending on where you live, summer and winter usage might be substantially different. For example, daily usage in the summer in AZ can be multiple times that in the winter due to high cooling needs of summer.

To give you a reference, U.S. Energy Information Administration (EIA) data shows that the average U.S. household uses about 29 kWh per day. Every household is different, however, and your usage may be more or less depending on factors like: 

• Where you live
• How many people you live with
• Whether or not you work from home
• If you have a swimming pool or an electric vehicle (EV)
• Whether you use gas or electric for cooking and hot water. 

Step 2. Look up how much sunlight your area receives

The next step is to find out how much sunlight your location receives. Solar panels only generate power when they’re able to absorb, generate, and store the sun’s energy. This happens during what’s referred to as ‘peak sunlight hours’.

Knowing the peak sunlight hours for your location can help you estimate how much energy you can expect your solar panels to produce and what size solar system you’ll need. Sunnier regions, such as Arizona, will receive more peak sunlight hours than areas that get less sunlight, such as Ohio. That doesn’t mean you can’t generate solar power if you live in Ohio, it just means you might need a larger solar energy system. 

The map from the National Renewable Energy Laboratory (NREL) below shows how much solar energy you can expect to generate in your state each day, measured in kWh.  

Step 3. Understand your utility rate plan

With the growing complexity of the utility grid comes with the growing complexity of the utility bill and rate plans.  Let’s talk through each of these layers to utility bills these days at a high level.

Breaking down a utility bill:

• Basic Charge: This is a basic charge to be connected to the grid.  Having a solar system doesn’t affect this basic charge in general. Some utilities increase this basic charge for solar customers to help recover some of the reduced revenue they would be getting from you. 
• kWh:  Kilowatt-hours is the amount of electricity you use. Relating to an analogy of a car trip, this would be how many gallons of gas you used getting from point A to point B.  
• kW:  Kilowatts are the rate at which you consume energy, measured as an average or the highest rate you used over a given period of time. Going back to the car analogy, this would either be the average speed or fastest speed you drove on a trip.
• Extras: Some utilities charge extra fees for different things. To understand these fees, you really need to get into the next level of rate design. For the purpose of this article, we’ll just leave them as extra fees.
• Taxes: Depending on the state, county, and city you live in, taxes are collected at each of these different levels.

Breaking down a rate plan:

• Basic rate plan: The simplest of them all. Utilities charge a rate per kWh that is the same throughout the entire month. These usually vary seasonally depending on which season your area uses the most electricity.
• Time of use: Time of use charges more per kWh depending on the time of day, time of year, and what day of the week it is. Although this sounds a lot more complex, the goal of rate plans like this is to incentivise customers to shift their energy usage to times when the energy is lower cost. 
• Time of use with demand: This is typically the most complex rate plan and generally isn’t recommended when adding solar only systems. Not only do you need to know when you’re using energy, but also the rate at which you’re using it. In this plan, utility companies are incentivizing end users to stagger usage over time instead of using it all at once. This allows utility companies to utilize their power plants more efficiently. Sounds complicated? We have exciting news for you: with energy storage products, such as the Tesla PowerWall 3, we can easily design a solar and energy storage system that controls charging and discharging to get you the most savings.  

Step 4. Calculate the size of your solar system

Finally, you can use the information gathered above to calculate the size of your solar system. We’ll walk you through this process step-by-step: 

• Start with your daily energy usage: We’ll use the average U.S. household energy usage of 29 kWh per day. 

• Find your daily peak sunlight hours: Use the NREL map above. In this example, we’ll say you live in Arizona and receive 5.5 peak sunlight hours a day. 

• Divide your usage by peak sunlight hours: We’ll divide 29 by 5.5 to get 5.272. 

• Convert to wattage: Multiply the last figure by 1,000 to get the total wattage. Our final figure is 5,272 watts, which is how much power you’ll need your solar panel system to generate each day. 

• Divide by wattage per panel in your system: If the solar panels you’re looking at generate 250 watts per panel, then you’ll need 21 total panels to meet your daily energy requirements. If the panels generate 350 watts, you’ll only need 15 to achieve the same energy goals. 

Other factors to consider when sizing a solar system

The above calculations provide a general estimate on how many solar panels you might need to meet your energy consumption. In reality, there are other factors to consider that might affect your solar system size. These include: 

• Utility rate plans
• The size, shape, and orientation of your roof
• Your energy goals
• Future-proofing your home
• The type of solar panels you buy
• Utility buyback programs
• Financial solar incentives. 

Considering each of these factors can help you get a more accurate estimate on your solar system size. We look at each in more detail below. 

Utility rate plans

Solar panels only generate power when they receive unobstructed exposure to sunlight. This means that they only produce power for 4 to 8 hours a day, depending on the time of the year. Shade and cloudy weather can all temporarily reduce your solar panel’s output and affect the amount of energy your solar system produces. 

For this reason, it‘s very important to know how rate plans and buy back rates affect your calculated savings. The old days of ‘everything is a one for one swap’ are over. Today, we are inputting your usage, your solar system and its production, and even energy storage into programs that simulate how your house plus solar plus energy storage will behave on the different rate plans and buy back rates. This is where it’s key to work with a trusted solar provider who has the right tools to simulate your house. Unfortunately, some solar providers still use the one for one math to calculate your savings and this just isn’t accurate anymore.

Your roof’s size, shape, and orientation

The efficiency of your solar panel system is determined by the size, shape, and orientation of your roof. South-facing roofs (in the northern hemisphere) receive maximum sunlight exposure, which means less panels may be needed. This doesn’t mean you can’t install solar panels on roofs that face east, west, or north - you may just need more solar panels to generate the same amount of energy. 

The size and shape of your roof can also impact solar system sizing. Larger roofs can accommodate more solar panels, while smaller roofs may mean you need fewer but more high-quality solar panels to generate enough energy. Finally, the size of your solar panel system can also depend on whether your roof gets shade at any time of day or has obstructions such as chimneys or skylights. 

Your energy goals

An important thing to consider when sizing your solar system is what you’re hoping to achieve with solar energy. If your home will remain connected to the electric grid, you’ll always have extra electricity available when you need it. Some solar customers want to produce as much solar power as their house uses and realize that unused portions will be sent to the utility grid. Others want to maximize their utility savings. Then there’s the highest level of energy independence, where you produce, store, and use all of your own energy.    

If you plan to live off the grid, however, then you’ll need to account for a solar energy system that’s big enough to meet all your energy consumption needs plus solar batteries to store extra energy for evenings and emergencies. If off-grid living is your goal with solar power, it’s best to consult with a professional solar company that can provide a customized system to meet your needs. 

Future-proofing your home

When sizing your solar system, it’s worth not only considering your current energy output but also anticipating your future needs. This can help you future-proof your home so your solar system continues meeting your energy needs into the future. Of course, you can always expand your solar system size later on, but this can cost more than installing a larger system from the beginning. 

Some things to consider when it comes to future electricity needs include: 

• Getting an electric vehicle (EV)
• Installing an air conditioning unit
• Adding a swimming pool
• Switching from gas to electric hot water and cooking
• Working from home
• Adding a second dwelling on your property
• Starting a family
• Installing a solar battery. 

If you anticipate some of these changes in the future, it may be worth adding extra capacity to your solar system upfront to avoid the added costs that can come with expanding your solar system later on. 

Type of solar panels

Today most residential solar panels can offer anywhere between 350 and 450 watts per panel, impacting the size of your solar system. Overall the solar panel efficiencies are about the same and the only difference is the size of the solar panel.  It’s more important to pick a brand that will be around to honor their 25 year warranty.  We always recommend picking a Tier 1 panel and a manufacturer that has been in business producing solar panels for over 10 years.

Utility buyback programs

Installing solar panels can be much more affordable when you consider utility buyback programs. Also known as net metering, these programs credit homeowners for excess solar energy sent back to the grid. This means that if you have a larger solar system, you’ll be generating more energy that you potentially won’t use and can sell back to the grid. You can then be compensated with credits off your electricity bill. 

Today, utilities are moving away from net metering and switching to buy back rates that vary based on a number of factors. The debate of solar’s value has been left to the decisions of utility companies, governing bodies, and solar customers/companies. One side of the debate argues that the value should be what the utility can buy a wholesale on the open market (ie. 4 cents a kWh), while the other end of the debate suggests it should be valued at the retail rate the utilities are selling their energy to the end user (ie. 15 cents a kWh). This is very important when choosing the size of your solar system and whether or not to invest in energy storage.

Leveraging solar incentives

Like utility buyback programs, solar incentives can make installing a larger solar system more affordable. Every household is eligible for the Federal Solar Tax Credit, which allows you to take 30% of the total solar system cost off your personal income tax return. 

Depending on where you live, your state government may also offer tax credits or rebates. For example: 

• In Arizona you can receive a state income tax credit of up to $1,000 for a solar purchase 
• In most states, but not all, solar systems purchases are exempt from state sales tax, reducing costs by 7% 
• Some counties offer tax credits against property taxes
• Some utility companies offer incentives for storage systems (batteries).

These solar incentives and rebates can affect how many panels you buy by making it more accessible to invest in a larger system or higher-efficiency solar panels. Speaking to a seasoned solar installer can help you maximize these incentives for your benefits. 

What size solar system do you need?

Ultimately, sizing a solar system starts with understanding your energy usage and including enough panels to generate the output you need. The exact number of panels you need will depend on your energy consumption, your roof’s size and orientation, the efficiency and type of panels you choose, and how much sunlight your location receives. 

Finally, it’s worth considering your future goals and building a solar system that can continue meeting your needs into the future. 

Summary: How to size a solar system

Switching to solar energy is more than just an environmental consideration, it’s a long-term investment that adds value to your home and creates independence from the grid. When making the move to solar power, take the time to carefully plan and consider your goals. When you’re ready for expert guidance, the team at Sun Valley Solar Solutions will be ready to help. 

Our friendly solar experts will assess your energy usage, roof characteristics, eligibility for financial incentives, and other factors to build a customized solar system solution that meets your needs - now and into the future. It all starts with a friendly, no-pressure consultation with one of our solar experts. Fill in the form on this page to get a free quote or call us on 480-576-5693 to get started now.