DIY Cost HQ

How solar sizing works

Installers size a system from one number: your annual electricity usage in kWh. Everything else is geography and physics.

The sizing equation

kW needed = annual kWh ÷ (peak sun hours × 365 × derate)

• Annual kWh — from your utility bills, all 12 months. A home using 900 kWh/month needs 10,800 kWh/year.
• Peak sun hours — your location's average daily solar intensity, 3.0 (Alaska) to 6.5 (Arizona). State averages are a starting point; your roof's tilt and azimuth move the real number.
• Derate (~0.80) — the real-world haircut for inverter losses, wiring, dust, heat, and panel mismatch. A 7 kW array behaves like a 5.6 kW one.

Why panels come in whole numbers

kW ÷ panel wattage rarely lands on an integer, so installers round up to whole panels. That slight oversize is normal and harmless under net metering — the extra kWh become bill credits.

What the equation ignores

Future usage changes (EVs, heat pumps, kids leaving), panel degradation (~0.5%/year), and rate structure changes. If you're buying an EV within a few years, size for it now — adding panels later costs more per watt.

A worked example

Take a home that used 10,800 kWh last year — 900 kWh a month, a common US figure — in a state averaging 4.5 peak sun hours a day. The equation runs: 10,800 ÷ (4.5 × 365 × 0.80) = 10,800 ÷ 1,314 ≈ 8.2 kW. With 400-watt panels, that is 20.5 panels, so an installer quotes 21 panels (8.4 kW) or trims to 20 (8.0 kW) and accepts covering about 97% of usage. Neither answer is wrong; the right one depends on your utility's net metering policy, covered below. Run the same home in Arizona at 6.0 peak sun hours and the answer drops to about 6.2 kW. Move it to the Pacific Northwest at 3.5 and it climbs past 10.5 kW. Geography is not a detail — it is a third of the answer.

Finding your real usage number

Use a full 12 months of bills, never a single month. Summer-peaking homes (air conditioning) and winter-peaking homes (electric heat) can swing 2-to-1 between seasons, and sizing off one bill mis-sizes the system in both directions. If you have lived in the home less than a year, your utility can usually provide the previous occupant's usage history. New loads matter too: an EV driven 12,000 miles a year adds roughly 3,000 to 3,500 kWh, and a heat pump conversion can add several thousand more. List anything electric you plan to buy in the next five years before you size, not after.

Why nameplate watts are not production watts

A panel's rating is measured in a lab at 25°C under a standardized flash of light. Your roof is not a lab. Panels run hot — often 25 to 35°C above ambient on a summer afternoon — and output falls roughly 0.3 to 0.4% per degree above the test temperature. Add inverter conversion losses of 2 to 4%, wiring and mismatch losses, dust and pollen between rains, and production that starts and ends each day at an angle, and the gap between the brochure number and the meter number is structural, not a defect. That is exactly what the 0.80 derate is for. Systems quoted without a derate, or with one above 0.85, deserve a second look.

What happens after year one

Panels degrade slowly, about 0.5% of output per year, so a system sized to exactly 100% of today's usage covers roughly 95% by year ten and 90% by year twenty. Most installers answer this by rounding the panel count up, which is why the slight oversize mentioned above is standard practice rather than upselling. Your usage will drift too — degradation and lifestyle changes usually matter more than any single piece of equipment in the design.