Yeah, you are thinking about "present value" not inflation.

With 3% inflation, the electric bill you'd pay in 25 years if you didn't have solar panels would be $1,675 so the savings are higher as you go forward in time.

Edit: So no, you don't use the rate of inflation to correct for the fact that money is less valuable to you the farther into the future you receive it. You should use the, inflation adjusted, rate of return from the alternate investment you'd put your money into if you didn't spend it on solar panels.

Here's an example. Let's say I say I'll pay you $800 in 25 years. You know the long term inflation adjusted CAGR of the stock market is 6.8% so you can calculate that the value of an investment, in real terms, would increase 5.18x over the next 25 years. This in turn means that if you invested $154.44 today, you'd have $800 in 25 years. So the present value of $800 in 25 years in $154.44 today, because if someone else offered you more than that amount of money today in exchange for the $800 I'd be paying you in 25 years, you'd be better off. Inflation rates really don't enter into the equation (except that you need to correct for them in calculating the expected return of your next best investment).

Edit Edit: You don't necessarily want to use the long term growth rate of the stock market, because you could argue the return on investment of solar panels is safer than the stock market. This example was for illustrative purposes only.