One of the first questions someone considering solar asks is: How much money do solar panels save?
While the question might seem one-dimensional, it is a bit more complex than just saying: “you’ll save on your electric bill.”
Let’s dive deeper into how solar saves:
How Much Do Solar Panels Save on Electricity Bills?
Most of the initial attraction of going solar is to reduce the cost of monthly electric and utility bills. How much does solar save on these bills? It depends on how much photovoltaic (PV) energy your system currently produces. The more your system produces, the more you can save with solar panels.
Typically, a residential solar setup produces anywhere from 350-850 kilowatt hours (kWh) per month. The average home uses approximately 909 kWh of energy per month, so owning solar can save you upwards of 90% on your monthly electric bills.
Shop Renewable Energy is committed to help connect our customers to the best solar company in their area so they can experience the savings immediately. There are even financing options that will pay for customers’ first 18 months of solar loan payments. During these 18 months, the only cost the customer will have is a small monthly charge to have your panels connected to the utility grid, typically around $10.
How Much Do You Save Through Solar Tax Incentives?
By owning your own solar system, you qualify for tax deductions from federal, state, and local governments. The federal government gives solar owners a tax credit for 30% of the cost of installing a rooftop solar-electric generator, including the cost of any necessary remodeling or retrofitting work associated with the solar installation, from your federal income taxes. Thus, if you were to spend $10,000 dollars on your system, you would receive a $3,000 tax credit. As a bonus, many states allow households with solar systems to qualify for a deduction on their state income taxes as well.
How Will You Experience Those Solar Savings?
Solar Savings come from many angles, but most of them fall to one big question: who owns your power?
Right now, the power company owns your power. They can regulate and decide when the price goes up and how much power you get. A solar system installed in your house allows you to generate your own power.
How you install your solar system and who you get it installed can impact your future savings.
This gets into purchasing options, which on the surface might seem straightforward:
- Power Purchase Agreements (PPAs)
- Solar Leasing
- Solar Purchase
Each of these purchase options can impact your savings in big ways and often not great ways depending on which one you select.
Solar Purchase is the easiest to understand. You buy it, you own it. Solar Leasing is a lot like leasing a car where you essentially own it all, but instead of paying to own, you are paying to rent.
Power Purchase Agreements are where you shift your electric bill to a solar developer. They own the system, install the equipment, and you pay them for power instead of the power company.
Any company who sells you one of these previously mentioned methods might offer a low buy-in and make it easy for you to jump into an agreement.
However, you will jump past most of your solar power savings too.
OWN YOUR POWER
With direct ownership of your equipment and power, you benefit from all tax incentives, and you benefit from the power savings—which can have a big impact on just how much solar panels save you in the end.
Whether you finance overtime or make one big investment, it is your power. Over the years, you will be paying whatever flat amount you agreed to at the beginning. The only reason you pay more for power is if your usage goes beyond your system size (and there are ways to address it before it happens).
GET THOSE TAX BREAKS
Another big factor of solar savings is tax deductions. By most statutes, if you do not own your system, you lose out on the savings entirely. Your developer or power provider gets to turn around and apply it to their own costs instead.
AVOID PRICE INCREASES
Instead of paying the power company, you pay a developer, or you pay on your lease every month. Depending on the contract you sign, there could be price escalators or other clauses leeching for those precious dollars you thought you would save with a solar system.
As we discuss in are solar panels worth it, the price of electricity has increased by more than 60% in the last 20 years. With how much the world relies on electricity now, it’s foolish to think it won’t continue for the next 20 years. Whoever is leasing or hasn’t gotten into solar power at all will be bound to whoever owns their power.
About Shop Renewable Energy
Shop Renewable Energy started because of a simple question: Which company should we go solar with? As we navigated going solar for our own roofs, we discovered that there were dozens of local and national companies offering different discounts, solar panels, ownership agreements, and more. With hours of research, we made our decision, but we recognized that many homeowners are choosing their solar installers blindly. That’s where we came up with the idea for Shop Renewable Energy. As a small business, we look to improve the lives of our customers by making the solar journey more simple than ever. We do this by connecting homeowners with the best local solar companies in your neighborhood. We hope that you can utilize our business to shop for the best renewable energy in your area!