How Much Electricity Do Solar Panels Produce?

How much electricity solar panels produce comes down to one formula and a few real-world adjustments. Whether you're checking a quote, sizing a system, or just curious what your roof could make, this guide walks through the output math per panel and per system — and why the number swings by season and fades slightly over the years.

The core output formula

A solar system's production is well approximated by:

Annual kWh ≈ system size (kW) × peak sun hours × 365 × derate

• System size is the panels' combined DC rating in kilowatts.
• Peak sun hours is your location's daily average of full 1,000 W/m² sunlight — about 6 in the Southwest, 4–5 across most of the country, and 3.7 in the Pacific Northwest.
• 365 turns a daily figure into a yearly one.
• Derate (~0.8) accounts for losses the nameplate ignores: inverter conversion, wiring, heat, soiling, and panel angle.

So an 8 kW system at 4.5 peak sun hours produces about 8 × 4.5 × 365 × 0.8 ≈ 10,500 kWh a year — roughly an average home's entire usage.

Per panel

The same math scales down to a single panel. A 400-watt panel is 0.4 kW, so at 4.5 peak sun hours and 0.8 derate:

0.4 × 4.5 × 0.8 ≈ 1.4 kWh per day, or about 525 kWh a year.

In the sunny Southwest that same panel might top 2 kWh a day; in a cloudy northern climate it might make under 1.2. Panel wattage matters too — a 450-watt panel makes about 12% more than a 400-watt one in the same spot.

The derate factor, explained

The derate is where a lot of confusion lives. Panels are rated under ideal lab conditions (Standard Test Conditions) that a real roof never quite matches. Between the inverter (~96% efficient), wiring losses, heat (panels lose efficiency as they warm), dust and soiling, and imperfect tilt and orientation, a real system delivers roughly 80% of nameplate over a year. NREL's PVWatts tool uses 86% before shading; 0.8 is a sensible all-in default. Lower it for hot climates, heavy shading, or a poorly angled roof.

Output swings by season

The annual average hides a big seasonal range. Long summer days with a high sun produce far more than short winter ones:

• A system averaging 28 kWh/day over the year might make 38+ kWh on a long June day and under 18 kWh on a short December one.
• Cloud cover, storms, and snow on the panels cut output further on any given day.

This is why solar is sized and judged on annual production, not a single day. Our solar panel output calculator shows the daily, monthly, and yearly figures along with a rough summer-to-winter swing.

Output fades slowly over time

Panels don't produce the same forever — they degrade about 0.5% per year. After 25 years, a panel typically still makes 85–88% of its original output, and most carry a performance warranty guaranteeing around 80–85% at the 25-year mark. Over a panel's life that adds up: a system rated for 10,500 kWh in year one averages a bit less across 25 years once degradation is counted. It's a small effect year to year, but worth including when you estimate lifetime production or savings.

From output to value

Production is only half the picture — what it's worth depends on your electricity rate, since each kWh you generate offsets a kWh you'd otherwise buy. A system making 10,500 kWh a year saves about $1,680 a year at $0.16/kWh, but only $1,050 at $0.10. To turn output into payback and lifetime savings, run the numbers through the solar panel payback calculator.