Friday, November 18, 2022

How Much Do Solar Panels Lower Your Electric Bill

Contact Your Local Solar Contractor For More Information

Do Solar Panels REALLY Lower My Electric Bill?

If youre having trouble understanding what to expect from your utility bills after solar panels, contact a local solar contractor. Here at Sandbar Solar, our team specializes in solar installation and is here to help you learn the ins and outs of your new residential system.

After more than 14 successful years, Sandbar Solar maintains its position as the most established solar company in Santa Cruz. Thanks to our experience in the industry, weve got the knowledge and background to help you understand why your energy bill might seem higher than it should be, and identify the proactive steps you can take to get the savings you deserve.

Contact us today to learn more.

About the Author

Scott is the founder of Sandbar Solar & Electric. With a Bachelors Degree in Economics from UC San Diego, Scott has an NABCEP certification, and has lectured on and taught many high-tech construction practices and solar PV technical concepts to education institutions, including Stanford University and state-recognized electrician apprenticeship programs. Scott enjoys sharing his knowledge of the evolving renewable energy space and making a difference in his community.

How Much Money Can Solar Panels Save You For Your Specific Home

One of the easiest ways to find out how much you can save with solar panels is by using our solar calculator. SolarReviews has the worlds first solar power calculator that shows the system size thats right for your home and what your return on investment could look like.

Estimate your solar savings

Our calculator provides savings estimates based on the following:

  • Your location
  • Your energy usage
  • Current average price offered by solar companies in your area

We also outline what solar tax incentives and other rebates are available in your area that will help bring down the upfront cost of a solar power system.

Solar Power: A Clean Way To Sidestep Rising Retail Energy Prices

Solar power saves between 200 and 300 MtCO2 of global emissions every year thats the equivalent of three-quarters of Australias annual CO2 emissions, so the environmental benefits of solar energy alone may be enough to make you think about adding solar panels to your rooftop.

But thats not all: installing a solar panel system can also reduce your electricity bill and save you precious dollars. Over the past five years, the overall cost of solar power has fallen so dramatically some 58% that its now cheaper than retail power in all Australian capital cities except Canberra .

Weve been quick to get on board: the Australian Energy Council reports that nearly 15% of the countrys households have installed solar panels thats more than 1.6 million homes enjoying the benefits of producing their own solar energy, reducing both their carbon footprint and their electricity bills.

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Charges And Fees On Your Power Bill

As most people that pay for power know, the fees make up a sizeable portion of a power bill with the actual energy charge accounting for less than half of the total amount due. This is typical across Alberta, so dont feel like you are the getting the short end of the stick.

Lets examine the major components. Bullets 1 and 2 relate to your energy retailer, and bullets 3 and 4 relate to your WSP. The orange numbers on the image correspond the ensuing points:

1. Energy Charge This is the fee for the energy itself, measured in kWh and charged to you per kWh of use . Solar power will directly reduce this charge.

2. Administration Charge This fee covers internal costs for the energy retailer. This is typically charged in $/day.

3. Distribution Charge This charge has 2components, a fixed and a variable charge. The fixed charge is typically billed in $/day, the variable charge is tied to your usage, typically billed n $/kWh. Your power bill will likely not provide a breakdown of the fixed vs variable portion of you distribution charge but it is easy to look up the breakdowns for different WSPs. Solar energy will directly reduce the variable portion of this charge.

4. Transmission Charge Transmission charge is based off your usage as well and billed in $/kWh. Solar energy will directly reduce this charge.

These 4 components will make up 90% to 97%of the average residential power bill.

The remaining charges are not as crucial but lets touch on them anyway:

How Much Money Do Solar Panels Save On Your Electricity Bill

How Solar Panels Can Reduce Your Energy Bills

Solar energy is the future. There are just no two ways about it. The world is fast-depleting its fossil fuel resources.

Research estimates our existing reserves for coal, oil, and natural gas will no longer be around as early as 2060. The world will have to turn to renewable energy resources like solar energy.

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Making Up For Downtimes

The drawback of solar is that those power-producing hours are not evenly distributed. Solar arrays overproduce power during the day but provide nothing at night. For this reason, many solar users choose to stay connected to the grid. In some states, you can take advantage of net metering contracts that let you sell excess electricity back to your electrical utility when you have it, offsetting your power usage at night. This also has the benefit of letting you pay for power at off-peak rates.

The alternative for those without a net metering option or who want to eliminate their grid dependency altogether is to install batteries. Modern lithium-ion battery technology has come a long way. These units can store your excess power during the day and keep your home running at night. They’re designed to handle your essential loads, and larger units can typically store up to around 100 KWh of energy.

Batteries are useful for more than night-time energy, providing a useful backup for power outages. They also boost your safety by providing an alternative power source for things like home security systems that normally rely on the grid. That prevents people disabling your burglar alarm by flipping a breaker. Using a battery also enables you to regulate your use of grid power to avoid higher prices during times of peak demand.

Do Solar Panels Save Money

Solar energy is the new thing in conscious energy these days, and with so many trendy investment opportunities, its hard to know if investing in something is really going to save you tons of money. So, do solar panels save money? Is solar worth it? How much do solar panels for the home cost?

Saving money by reducing your electricity bill by cutting down the amount of energy you use is no fluke. Solar panels give you the ability to save money by creating a natural source of energy that has the ability to power your home and heat your pool. If youre looking to save a ton of money, it really depends on a few key factors:

  • Direct hours of sunlight
  • Size of your pool

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Combatting Rising Electricity Rates With Solar

Its probably not news to you, but Australias household energy prices have skyrocketed over the last decade. For most of us, that translates as extra strain on the family budget.

Although electricity prices remained relatively stable for nearly 30 years, by 2013 we saw them swell by an average of 72% on 2003 figures, and gas by 54%. These surges were largely due to investment in the network and the implementation of a carbon price in2013. We had a short-lived respite in 2014 when the carbon price was repealed and the average national residential electricity price dropped, but between 2016/17 and 2017/18, prices climbed nationally by some 10.8%.

And much to the anguish of Australian families, it looks like this trend is going to continue. The closing of Victorias Hazelwood power station and South Australias Northern station has meant that the Australian Energy Markets Commission has gloomily forecast an annual average increase of 2.5% from 2016/17 to 2107/18.

Pay With A Credit Card For Extra Safety If You Can

Solar Panels – How To Lower Utility Bills

Pay by credit card for something over £100, and Section 75 laws supercharge your consumer rights. Unlike with debit cards, cheques and cash, pay in full or in part on a credit card, and by law the lender’s jointly liable with the retailer.

This means you have exactly the same rights with the card company as you do with the retailer, so if it goes bust, you can simply take your complaints there instead and get money back if there’s no delivery. See our Section 75 guide for a full explanation.

If paying by debit card, there’s also valuable hidden protection that means you may be able to get your money back if something goes wrong. It’s called ‘chargeback’ and applies to most debit and charge cards, as well as Visa, Mastercard and American Express credit cards though it isn’t a legal requirement. See our Chargeback guide.

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If You Already Have Solar Panels And Get The Feed

If you already have solar panels and get the feed-in tariff, the closure of the scheme won’t affect you. Depending on when your panels were installed and certified you’re guaranteed to get the payments for at least 20 years:

  • 25 years if installed and certified before 31 August 2012
  • 20 years if installed and certified between 1 September 2012 and 31 March 2019
  • Average Solar Bills In Qld

    Households with solar in Queensland pay an average of $260 for electricity per quarter, our survey found. Queensland residents are more content than most with their feed-in tariff, with 68% reporting they are happy with the rate they receive. This has led to almost all Queensland survey respondents agreeing that installing solar has been a good financial decision. For context, Queenslanders on average paid $6,358 for their solar system.

    Read Also: How To Be A Good Solar Salesman

    Tax Incentives Can Help A Lot

    Homeowners can receive a one-time tax credit of 26% off the purchase price of a solar system. If the initial solar panel investment typically costs around $20,000 in your area, the tax credit would net you $5,200 when you next file taxes.

    What’s more, some utilities offer incentives and rebates for installing solar power. Check with your local energy supplier to see if they offer any incentives.

    Commonly Asked Questions Related To How Much Money Solar Panels Save

    How Solar Panels Can Help Cut Costs On Your Utility Bill ...

    Why is my electric bill still high with solar panels?

    Although solar panels are a form of renewable energy, they still produce a finite amount of electricityan amount thats consistent with the size of your system. If you require more energy than your solar panels are capable of producing, you will still owe money on your electric bill. And in some cases, it may still be high if you significantly increase your energy usage or if your system was not sized properly to meet your energy needs. If your bill suddenly increases and you havent increased your usage, make sure to contact your installertheyll likely want to inspect your system to ensure everything is working properly.

    How long does it take for solar panels to pay for themselves?

    There are many factors that affect a solar panel systems payback period including the initial cost of the system, financial incentives, your average electricity usage, and the estimated electricity generation. Some of these factors are easier to calculate than others, but on average, it takes between 7 and 8years for most homeowners who shop for solar on EnergySage to get their solar panels to pay for themselves. Read this article to find out if switching to solar is worth it for you.

    What are two disadvantages of solar energy?

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    Your Local Electric Rates

    Finally, you must factor in what your electric company charges and its rate structure. Todays U.S. average cost of electricity is predicted to rise in the short-term by 3% each year. Then, you guessed it, energy prices are likely to continue rising incrementally.

    Speaking of average, the average energy consumption in a U.S. household multiplied by the average electric rate per kilowatt hour equals an average American monthly electric bill of $113.20.

    Your Average Energy Consumption

    You can easily determine how much electricity you use by looking at the back page of your last power bill. The amount of electricity you consume will be shown in kilowatt hours . This is the first step in determining how much you can save with solar energy as well as which system is right for you.

    Typically, larger properties or households with higher energy demands will require a solar energy system around the 5kW range or higher.

    A 5kW system in Australia generates between 18kW/h – 25kW/h of solar electricity on average per day. Refer to your bill to see how many kW/h or units you are currently using.

    Some regions are limited by the size of the system they can install to find out more information, contact us.

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    Your Homes Solar Energy Potential

    The amount of sunlight your home receives annually will be a major factor affecting your savings from solar panels. Homes in the Southwest, including Nevada, receive a high amount of intense sunlight throughout the year, giving them a high solar energy potential. However, nearby obstructions that shade your home can reduce its solar potential. In addition, south-facing roofs in the Northern hemisphere have a much higher solar energy potential than north-facing ones.

    How Do I Read This Bill

    Can I Reduce My Electricity Bill With Solar Panels?

    Clean energy and a reliably comfortable home starts by controlling your energy costs with solar. Most electric bills cover a few standard components. With a home solar system, these components are generally up front and center:

    Service Fees

    A home solar system wont remove standard service fees. Service fees are the electric companys charges for connecting your home to the grid. Generally, its a flat monthly cost not based on how much electricity you use.

    Taxes

    Benjamin Franklin said nothing is certain in this world but death and taxes. Yet, a solar installation sure makes living in your home a lot more fun and financially secure.

    Taxes from electric companies are typically based on the amount of grid power used. So, the more electricity generated by your home solar system, the less you pay the tax man.

    Here, the financial benefits of using a storage battery are readily evident to reduce your draw from the electric grid.

    Electricity Use

    After the bottom line on your energy bill, electricity use is the component we look at. The electric company charges based on a volume rate .

    However, with a home solar system, your electric bill only includes the number of kilowatt hours youve used from the grid. They dont add in any electricity used from your solar panels.

    In fact, they dont even see how much solar energy youve used. So, if you only used power generated by your solar panels, the amount of electricity use on your bill would be zero.

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    How Does Solar Energy Save Money

    If your average monthly electricity bill is high, and youre living in an area with high energy rates then its worthwhile installing solar panels in your home while the 26 percent tax break is in place. It is not only amazing for your wallet but also good for the environment. Here are a couple of reasons why you should invest in solar panels:

    • The price of energy is not dropping
    • The cost of installing solar panels has improved and prices have fallen
    • Installing solar panels provides a long-term subsidy benefits
    • Save money on your pension by reducing energy costs on your monthly electricity bill
    • Solar panels are long-lasting and require little upkeep

    Are There Any Other Schemes I Can Use

    Yes, there are some schemes that can help you recoup some of the costs.

    Firstly, if you are aged over 60 or receive disability benefits, you could get a 5% VAT reduction on the cost of buying or installing the panels.

    To check if youre eligible, contact your energy supplier.

    A new scheme was also introduced in January 2020.

    The smart export guarantee pays you for any solar energy you export. This is electricity you generate but dont use yourself.

    This surplus energy can be sold back to the grid and could add up to hundreds of pounds over the course of the year.

    The kWh rate you get will depend on your supplier.

    SEG isnt as generous as FIT, but MoneySavingExpert estimates you could save up to £360 a year through the new scheme.

    That would mean you could cover the cost of the panels in about 15 years.

    But as previously mentioned, that will depend on where you live and how much sunlight you get.

    MSE says for homes further north it could take as long as 26 years to break even.

    If you do not have an export tariff set up or a storage unit, any additional electricity you generate that you do not use immediately will be wasted

    Research by Which? In 2020 found the price you could get per kWh varied from 1p to 5.5p.

    That compares with a rate of around 17.2p/kWh if youre buying energy on a standard tariff at the moment.

    The disparity between the best and worst tariffs highlight the importance of shopping around.

    Thats on top of the savings on your bill too.

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    Electric Bills: How Much Money Do Solar Panels Save

    The first step to understanding how much money do solar panels save is understanding how much money youre spending right now on electrical power. The goal of the solar panels is to cut down or eliminate your electrical bill as much as possible, so the principal method that youll experience savings is through elimination of that bill.

    With an understanding of how much youre paying right now, you should get an idea of how much electricity your solar panels will need to generate in order to eliminate your bill.

    The average electric bill in the states is somewhere in the range of $100-$120 per month. This translates to about $1200-$1440 per year for a total of about 12,000 kW-hr.

    To experience the full savings of $1200 a year, your solar panel installation will have to be able to support that level of electricity consumption.

    Another way that solar panels help you save is via a tax credit. Federal regulations stipulate that you receive 26% of your solar panels installation cost back at the end of the year as a tax credit applied directly to your liability.

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