Energy Offset
The percentage of your home's annual electricity consumption that solar panels cover — a key system sizing metric, typically targeted at 80–100% for financial optimization.
Energy offset is the ratio of annual solar production to annual electricity consumption, expressed as a percentage. A 100% offset system produces as much electricity annually as the home consumes — though not necessarily at the same time (hence the need for net metering or storage).
Optimal offset depends on utility economics: under full net metering, 100–120% offset maximizes savings because excess credits have full value. Under net billing (low export rates), sizing for 80–90% offset avoids generating low-value exports — the last 10–20% of production would be exported at wholesale rates, reducing marginal return on additional panels.
Annual consumption can be found on utility bills (usually in kWh). Common US home consumption: 10,000–13,000 kWh/year for average homes; 15,000–25,000 kWh/year for larger homes or those heating with electric heat pumps. Adding an EV significantly increases consumption (a Tesla Model 3 adds approximately 3,000–5,000 kWh/year) — a common reason to oversize systems.
Real-World Example
The 11,200 kWh/year household sized an 8 kW system expected to produce 10,800 kWh (96% offset) — choosing 96% rather than 100% because the last few panels would produce excess exported at the utility's low $0.04/kWh buyback rate.