The increasing cost of electricity from various traditional sources makes solar panel installation seem like a no-brainer for many Americans. However, the actual cost of solar power and the full scope of solar panel savings depends on many factors. The Centre for Sustainable Energy (CSE) estimates the average cost of solar systems and installation ranges from $15,000 to $25,000. Prior to making the leap, it’s essential to understand your current utility bills, financial incentives, tax credits, and the overall return on investment of your solar investment.
Location affects electricity rates significantly. The national average electricity cost is about 13 cents per kWh, according to a 2019 report from the United States Energy Information Administration. Consult with reputable PV system installers to determine the expected solar panel savings.
Solar panel savings on electric bills
Do solar panels save homeowners money? The most straightforward answer to this question is “Yes.” But how much solar panel savings are you likely to get?
An important step to determining how much solar energy can save you is to calculate the amount of money you’re spending on electricity bills every year. Suppose the average power bill for a United States household is 10649 kilowatt-hours. Multiply this figure by the estimated average electricity rates of $0.13per kilowatt-hour. You will realize that a typical American household spends less than $1,450 per year on power bills.
Next, consider the volatile nature of electricity costs and calculate the expected cost of electric power in the future (years). When comparing the current cost of utility with the expected solar panel savings, you must consider the expected utility rates increase in the past decade annually.
In the past ten years, national electricity prices have increased at a rate of approximately 2.2% annually. Keep in mind that utility rate inflation is considered an added incentive for property owners who choose to go solar. When you generate sufficient energy from your roof PV system, you will be locking in energy-related costs at a constant rate. That means you will no longer consider variable utility costs.
Think of a PV system as an upfront investment. That means a functional PV system is likely to cost thousands of dollars (PV systems acquisition and solar system installations). You should also add the cost of electricity in case your panels don’t entirely offset your household’s use of electricity. Whether or not your PV system will entirely offset your power needs is majorly determined by the system’s accuracy.
Consult with a reliable solar power company or reputable solar installers to determine the number of PV panels you need to offset 100% of your household’s electricity needs. A reliable installer can also help you choose the right roof PV panels, install them, and ensure your home’s solar energy system is fully functional. Generally, a solar installer company is your best partner if you intend to go solar.
Here are four steps to determine solar panel savings.
Evaluate your energy costs
Solar systems generate their own electric power and can offset monthly electricity bills, if not eliminate them. Property owners with high utility bills are likely to benefit more from switching to solar energy investment. Keep in mind that each utility company charges varying prices, which means solar panel savings are likely to vary from month to month. Similarly, if your household energy consumption changes, the amount of solar panel savings is also likely to vary.
Evaluate your PV system’s exposure to sunlight
More sunshine means more energy produced and a higher potential to save on utility costs. States like California and Arizona get more average sunlight hours daily compared to cold regions like Alaska. Note that solar arrays or orientation towards the sun, roof type, and the amount of shade also affect a PV system’s overall output.
Estimate residential PV system cost
Generally, the brunt of the expense with renewable energy is in the acquisition of panels and solar installation costs. The long-term solar savings outweigh the initial solar costs, making solar energy a cost-effective way to power your household appliances and other aspects of your home. According to thousands of homeowners who prefer alternative sources of power, most PV systems require minimal maintenance and are created to last for more than two days.
When estimating the total cost of your residential PV system, work with a reputable solar company to make accurate estimates. Keep in mind that your home’s PV system is a big-ticket item. So, it makes sense to get solar quotes or price quotes from a top-rated power company in your area. You may want to compare prices and choose a highly effective PV system that suits your budget.
Both federal and state governments offer strong incentives to plenty of homeowners for installing PV systems. Some of the so-called solar incentives include solar tax credit, manufacturer rebates, metering credits, and additional rebates, depending on where you live.
Depending on your state, you may get a huge incentive or additional rebates. For instance, some states offer solar-related incentives such as property tax exemption, expedited permits, cash back, and waived fees. Property owners whose PV system power generation exceeds household energy usage can sell the excess energy to a utility company.
Make the call
Now you have all the facts about solar panel savings. If you live in a region with high energy rates, suitable for PV system installation, and can afford the initial investment capital, it’s worth going solar. In addition to making significant solar panel savings, you will enjoy an uninterruptable green source of energy (if you have batteries installed).
Once you decide to shift to solar power, consult with a reputable local solar company.