You're putting the cart before the horse.
Part 1: plenty of breaker spaces
First you decide how many breaker spaces you'll never, ever, ever need more than. The goal of this exercise is to make SURE you never run out of breaker spaces. Spaces are cheap; 30 spaces is not too many.
Once you have the breaker spaces, you will find panels with that many spaces have a certain bus limit or main breaker limit. Such as 100A, 125A or 200A. For instance my car has 105 mph tires. The judge put it very firmly that this is only a safety limit, and I don't need to install electrical feeder that big. I just can't install feeder bigger than that. So if I need 120A, a 200A panel yes, 100A panel no. Get it? That's all that is.
Part 2: The requirements of now and future loads
Now you look at the loads to be powered from there, and you do a mini Load Calculation for the loads to be in that panel. Allow for future possibilities. Don't work too hard since you'll probably be snapped to 90A just because of the way costing works.
Remember to apply a 125% upward derate to heaters, lights, EV charging and other loads which are continuous. So if the nameplate says 20A, count it as 25A.
Keep in mind electric vehicles are happening for real. Some time before you sell the house, you'll want to wire up a junction box ready for an EV outlet, because home buyers make higher bids on houses with them. Pencil in 30-50A for that. It's overkill for EV charging, but nobody ever got fired for fitting a NEMA 14-50 outlet, which happily can also serve large RVs.
While we're doing Load Calculations, also do a revised Load Calculation on your house to make sure your house can even support this additional load. If it can't, there are some options. In particular, this is not an impediment to electric cars because there's a bunch of tech for solving that problem. This doesn't affect the feeder size decision but may affect other parts of the project.
Part 3: Size that feeder!
Here we are at your question, and it's easier than you think with a likely default. Now that your now and future load amps, you select:
- 21-90A: 2 AWG aluminum
- 91-100A: 1 AWG aluminum
- 101-120A: 1/0 AWG aluminum
- 121-135A: 2/0 AWG aluminum
What is going on there? Real easy. Large aluminum heavy feeder is proven perfectly safe from 60 years of usage, because it is landed on lugs rated for aluminum (made of aluminum actually).
You may have heard of a crisis with small branch circuit aluminum wires, that was because a) the lugs were not properly rated for aluminum and b) nobody was torquing small connections in those days, and that matters! But they were torquing large connections. Use a torque wrench on your lugs.
Anyway, aluminum is perfectly safe, but #2 is the size at which everyone agrees on that. It is also used widely for service wires, so it lives at a pricing "sweet spot".
What about smaller aluminum if you don't need 90A? Not really worth it. #4 isn't any cheaper due to rarity, and #6 is only 50A.
Do I really need to run a #1 copper wire to this subpanel (which is what code calls for on a 125a panel). It seems completely overkill for my use-case.
Nice to meet someone who can read the ampacity charts correctly!
You absolutely do not need copper wire, no. If your head popped off after seeing the price of #1 Cu, your head's gonna pop again when seeing the price of #2 Al. It's about the price of #10 copper (30A). This is why a 21A feeder might as well be #2. Gives expansion room and doesn't cost any more.
What size breaker should I put in the main panel? Do I really need to put a 150a (or more) breaker which can be quite expensive?
The breaker must physically fit the wire. So #2 feeder needs at least a 60A breaker (won't fit on the small frames used by 10-50A breakers).
The breaker must be large enough for the Load Calculation (which includes those 125% continuous derates)... and can be as large as the wire ampacity. If the exact size of breaker is not offered, you are allowed to "round up" to the next available breaker size.
Suppose your load is 57A. You cannot use 55A wire with a 60A breaker since 55<57. But you can use 90A wire with a 60A breaker since 60>57. And 60A breakers are cheaper than 70-90A breakers lol.