Wednesday, June 19, 2024

How Much Can Solar Panels Save Me

Estimate Residential Solar Panel Cost

How much can solar panels save me over time?

The brunt of the expense with solar panels is in installation and the purchase of the actual panels.

» MORE: Compare solar loans and apply

Minimal long-term expenses can make up for the upfront costs. Most systems dont require much maintenance and are designed to last for 20 years or more with little change to the amount of electricity produced, Nilsen says.

When calculating the total price, consider how much energy you regularly consume your usage is listed on your monthly utility bill and what size system will generate the amount needed. Some tools, like the SolarReviews calculator, estimate the system size for you.

With installation, an average residential 5kW size system costs between $3 and $5 per watt, according to the CSE, which results in the $15,000 to $25,000 range. That cost is before any tax credits and incentives.

If you know your current energy usage, you can calculate how much youll need to pay for solar panels.

» MORE: Calculate your monthly payments on a solar loan

Then comparison shop for solar panels as you would other big-ticket items, such as a car or TV, says Vikram Aggarwal, CEO of the solar marketplace EnergySage. Some companies lower installation costs through rebates and other programs.

Aggarwal recommends getting quotes from three to five contractors. EnergySage compiles solar companies customer reviews, certifications, Better Business Bureau profiles and other information to help you find reputable providers.

How Much Money Do Solar Panels Save You On Electricity Bills

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On average, solar panels will save you over $1,100 per year on your electricity bills. This is assuming a system size of 6 kilowatts, which is common in the US. The estimate also considers the average sunshine available in the country, and the average electricity price of 13.34 cents per kilowatt-hour reported by the Energy Information Administration.

The US is a large country, however, where sunshine and electric tariffs change a lot from place to place. For this reason, average performance values can be misleading. Solar panels offer increased savings in places with abundant sunshine or expensive electricity. California has both conditions, for example, and the annual savings from a 6-kW solar system can reach up to $2,000.

Solar panels have become popular thanks to their simplicity and excellent return on investment. When you install a home solar system, the long-term savings can be up to 3 times higher than the upfront cost. Also consider that electricity prices tend to increase each year, making solar energy more valuable over time.

How Much Money Can Solar Panels Save

State and city
$13,066 $22,212

Once inflation has been factored in, if you are in a location like San Diego, California, then it is pretty clear that you are going to be loving life if you bank all of your savings over the 25-year usage period of your system.

Even if you are in a different location, the profits look pretty fantastic across the board. Except for those living in Seattle, Washington, where sadly, going solar is not a viable option unless it is for ethical reasons.

In a worst-case scenario, should inflation rates steeply decline well below the 2.8% annual figure, the initial sting of paying the upfront costs for a solar system in some states and cities absolutely would not be worth it unless your primary interest in having a solar system is to reduce your carbon footprint and protect the planet.

Examples include the aforementioned Seattle and even locations like Portland and Tulsa where the savings over the lifetime of the system do not really justify the upfront spending. Inflation rates for utilities tend to be pretty predictable, meaning that any decline would be very gradual if there were one at all. This means that the above figures are likely to remain accurate for a considerable amount of time.

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How Much Electricity Will Solar Panels Save

Solar panels are one of the best and fastest advancing forms of renewable energy on the market, and its easy to see why they are so popular. They help to save energy that would have otherwise been taken from the grid, they cut your energy bills, and they can make you an excellent financial return. While the initial costs can be a little high, the payback period is comparably short, so dont cut them out just yet.

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How much would solar panels save me?

Solar panels generate their own power and can therefore greatly offset your monthly electricity bill, if not eliminate it. The higher your bill, the more likely you’ll benefit from switching. But you should note that electricity rates and usage the main charges on your statement are volatile.

“If a utilitys electricity prices fluctuate, so could the amount of savings,” says Garrett Nilsen, deputy director for the U.S. Department of Energy’s solar energy technologies office. “Similarly, if energy consumption changes, the amount of savings can also vary.”

Visit the EIA website to view the most recent prices per state.

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Estimating The Solar Panel Install Cost

The national average cost for electricity consumption in the US according to statistics is around 1kW per hour, with the national price of 1 kW per hour of electricity at $0.12. There are 730 hours in a month, which means the average electric bill floats around $87.6. If you got much higher than that, dont be surprised! The cost of electricity diversifies state by state. Of course, what we use in our homes play a big role in what our electricity bill averages per month. Also, think about all the other appliances in your home that run in the background. These are all the small things that cost your utility bill to move up. And with the increase of electric bills by 3% every year, you might want to hear more about the solar energy system.

How Local Sunshine Affects Solar Panel Savings

The savings achieved by solar panels are directly related to the sunshine they receive. To visualize the concept, assume you have two identical solar systems in different states, where one gets 50% more sunshine. Since the panels simply convert sunlight into electricity, you can expect them to produce around 50% more kilowatt-hours as well.

  • The local sunshine cannot be changed, but you can make solar panels more productive with smart placement.
  • Ideally, they should be installed in an area that does not get shadows from surrounding objects or buildings.
  • Avoiding shadows can be tricky: their position changes throughout the day depending on the suns position in the sky.

In the US and other Northern Hemisphere countries, most sunshine comes from the southern portion of the sky. To take advantage of this and save more energy, solar panels should be tilted slightly south. If you work with qualified solar installers, they can arrange your panels so they avoid shadows, while having an optimal orientation to increase the sunlight received.

Solar companies use a metric called the specific yield to describe solar panel productivity under the sunlight conditions of a given site. The specific yield provides the annual output in kilowatt-hours, for every kilowatt of installed capacity. Since the metric is expressed per kilowatt, it applies for solar power systems of any size.

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Can Solar Panels Save Me Money

In the short term, solar panels are very expensive, but in the long term, they can actually save money for their owners, sometimes a lot of money, assuming that the solar panels are installed and maintained properly. In fact, in some instances, a solar array can even generate money for its owners, creating a return on the initial investment.

The initial outlay of cash involved in a solar panel installation can be high, although the cost of solar technology is constantly decreasing. Before installing solar panels, homeowners and renters installing with the permission of their landlords should look into available subsidies and credits. Sometimes, tax credits or rebates are offered to people who install panels, and in other cases subsidies are available from the government or community agencies.

Another option is rental of solar panels. Some power companies and solar organizations offer solar panel rental, in which people pay a modest fee for installation and then rent the panels as long as they want to use them. Some of these programs are rent-to-own, allowing people to make the initial investment in solar panels over an extended period of time. Both of these options can help people save money from the start with solar panels.

Keep An Eye On Trade Policy

How Much Money You Save with $30,000 Solar Panels | How Much you Save with Solar Panel Per Month USA

Changes in government trade policy also impact prices. In January 2018, President Trump imposed a four-year tariff on imported solar cells and panels that started at 30% and was set to drop 5% each year until February 2022. In 2020, the tariff rate for the fourth year was raised from 15% to 18%. The tariff resulted in a 16 cent per watt increase for the average consumer in 2018, which translated to an overall increase of $960 for a six-kW system, according to EnergySage.

The cost of foreign-manufactured panels may still drop, lessening the tariffs effect over time.

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How Much Are You Willing To Pay For A Solar Power System

If you only want to pay $4000 for a solar system, it might not be worth it. The cheaper end of the solar industry is plagued with issues from under-performing panels, to no-name manufacturers in China going out of business , to unprofessional installers that dont respond to service requests, to misleading marketing, and fake testimonials and so on. It can be a nightmare and we know all about it from the dozens of calls we get every week from households that have been ripped off by other installers and are looking for help.

It is also quite easy to strip $500 out of an install, which is something no reputable installer would do, however, we know it happens with these cheap solar systems offered by certain installers. You cant get a $6000 5kW system on sale for $4000, in fact, there are significant differences between the different price points in the solar industry that should be understood before signing up for an installation.

Are Solar Panels With Battery Storage Worth It

One of the downsides to solar panels is that you usually have to use energy immediately. In most cases, if you’re not actively using it, the power your PV system generates is lost. You can remedy that situation with solar batteries.

Solar battery storage works just like any other battery: you store any electricity you don’t use so that you can go back and use it later.

You don’t need to know the ins and outs of solar batteries to use them, but their complexity does affect you. A solar battery system can cost you roughly £4,000, which may almost double the cost of your solar panels. If you’re comfortable spending that much, though, it will help you save more money.

Solar batteries will enable you to use PV power at night, further lowering your energy bill. Similarly, they make it easier to sell any energy you don’t use back to the grid. Keep in mind, though, that the added initial cost will mean it will take longer to make a return on investment.

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It Starts With Your Mindset

Investing in solar is for future planners.

If youve got a sunny roof, your solar panels offset your electricity use pretty evenly, and your utility company offers a good net metering system, youre probably in good shape to save short term on your utility bills. Perhaps significantly. Many of our clients do. But still, the biggest financial gains are long-termtypically, 8-12 years down the roadwhen youve paid off your solar investment but your electricity is still mostly covered each month.

So before even looking at how sunny your roof is, ask yourself:

Are you thinking short-term right now? Like a robin digging for worms for breakfast?

Or are you in a long-term frame of mind, like when the same robin flies up high to find the perfect branch to build a nest?

Once your solar panels are up and running, what youll pay each month depends on several factors.

Homeowners tend to land in one of three categories.

How Much Do Solar Panels Save

South Australia

If youre interested in understanding how much money solar panels save on your electric bills, you first need to calculate how much youre spending on electricity every year. For example, the average annual electricity usage in a U.S. household is 11,000 kilowatt-hours . If you were to multiply that by the national average electricity rate . You would get how much youre spending on electricity every year. The typical American household spends around $1,430 dollars a year on electricity alone.

2018 Solar panel savings estimates by state table

State

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How To Save Money Going Solar

One of the biggest advantages of installing residential solar panels is a 30% federal tax credit on the total cost of a system. That means homeowners but not renters can subtract the credit from the federal income taxes they owe, in effect reducing the price of their solar purchase by nearly one-third.

Congress authorized the credit through 2019, but it will decline to 26% in 2020 and 22% in 2021 and then disappear. The credit could save the average homeowner $5,000 or more , according to EnergySage, a solar marketplace with a calculator to help estimate savings.

It may seem obvious, but access to sunlight is important. If your roof is deeply shaded by trees, mountains or buildings, solar panels wont work well. Unsurprisingly, California leads the nation in residential solar capacity, but some of the others in the top 10 may surprise you.

Its important to have a basic idea of how the panels work as well. Also known as photovoltaic panels, they are mounted on the roof of a house and use sunlight to produce electricity. An important part of any solar system is a box called an inverter, which often is installed in the garage and converts electricity produced by the panels into the kind thats required to operate home appliances .

How Much Will Your Electric Bill Be After Installing A Home Solar System

The truth is, it depends on a few aspects. Your solar installations energy production, your local electric rate, and your households energy consumption.

With optimized household energy consumption and a maximized home solar installation, you can develop a financial equation that balances your electric bill and energy needs. Then, add up the thousands of dollars youre not spending over the years by using home solar.

Plus, there are bonus points. Because of the costs you avoid in going solar, your benefits will be even greater in states with high electric rates.

And, as energy prices spiral upward, your financial security will become even more advantageous over the 25-year lifecycle of your home solar system. Take control with solar. Its your home, your energy.

See if you qualify for the26% federal tax credit

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Average Solar Bills In Nsw

In New South Wales, we found that the average electricity bill for solar customers is $372. While less than half of solar panel owners said they are happy with their feed-in tariff, 92% agreed that installing solar was a good financial decision. The average cost for a solar system in NSW was $5,893.

Not Regularly Cleaning Your Solar Panels

How Much Money Can Solar Panels Save You? | Solar Run

Not regularly cleaning your solar panels or having them cleaned is foolish for one particularly important reason. Solar panels rely on photon ray absorption in order to produce as much energy as possible. Considering that you are already aware that solar panel efficiency can be reduced when they are obstructed by trees or buildings that block the photon rays as they travel to the panels, surely it only makes sense that dirt on panel surfaces also is a major obstruction.

Since the weather can be unforgiving in certain areas, every few months you may find that your solar panels get coated with a thick film of dirt. What is the end result? They are going to operate with less efficiency and save you less money. Because this is completely avoidable, you should really do everything that you can to make certain that your panels remain clean at all times.

You might raise the point that rainwater will clean them naturally, but as rain does not scrub the surface of the panels hard as it falls, it only makes sense that you are going to need a more direct form of intervention to do the job properly. It is theorized that panels that are cleaned thoroughly operate with 12% more annual efficiency than panels that are cleaned purely through natural rainfall. This means that you could lose 12% efficiency every year if they are not cleaned.

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What Equipment Will I Need And What Does It Cost

How many panels you need depends on how big your premises are and how much electricity you would like to generate. PV systems are much more affordable than they used to be. A typical small set-up is a 4kW system, with 16 panels and a grid connector. This costs an average of £5,890 excluding VAT, according to the Energy Saving Trust. A decade ago, this would have been nearer £14,000. Larger, 10kW commercial systems are popular with businesses because they generate more power. However, with 40 panels, they do take up a lot more space.

Solar panels should last for at least 25 years, and have low maintenance costs as there are no moving parts. Cleaning is required to keep them operating efficiently, so factor this into your estimates. You may also have to replace the inverter every 10 years or so.

You will also need a smart meter so that you can measure the energy that you export to the grid. Many energy companies will now offer these to business customers at low or no cost.

Investing in a battery storage system will store up your generated electricity so you can use it later, such as when its dark. A battery system could benefit you if your business uses a lot of electricity outside daylight hours or if you run electric vehicles that need charging. Batteries used to be prohibitively expensive but prices have fallen dramatically in recent years. Learn more about how solar panels work.

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