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The rising electricity costs around the country are leading consumers to look for alternative solutions. One of the most trendy solutions these days is solar energy. Even though solar panels aren’t the cheapest investment, they can save you money. But the question is, “how much do solar panels save?”
Well, this depends on several factors that we’ll cover in this article. Let’s get started!
Why You Should Go Solar in 2021
2020 was a strange year for everyone. One of the less talked about financial damages the pandemic caused was higher electricity bills. This makes sense considering millions of people working remotely or simply spending more time at home due to restrictions or precautions. This is one of the reasons homeowners are investing in solar energy not knowing when the pandemic will end.
Apart from COVID-19, there are many reasons why residential solar panel installation is becoming popular. The cost of solar panels has been decreasing steadily. You can not only lower your electric bill but also become more energy independent. However, people are becoming more environmentally conscious and investing in solar energy for their environmental benefits. Here’s how going solar can help the environment:
1. Free and Abundant Energy Source
Apart from installation and maintenance, your solar system will generate free solar power for decades. The longer you have a home solar system installed, the more money you’ll save as the equipment will pay itself off with the bills you save with solar. How does this affect the environment? With more homes running on solar power, the demand for conventional energy sources would decrease, leading to less energy production and damage to the environment.
2. The Future of Energy
More Americans are now playing their part in saving the planet by demanding the government to take action. As a result, renewable energy has become one of the top priorities in 2021. In 2020, the US produced over 2.7 gigawatts from solar panels, and this number is set to rise every year from now as solar panels cost less and less every year. With the demand for clean energy steadily increasing, solar energy might become the main energy source for the future. And when that happens, we’ll rely less on fossil fuels that contribute to greenhouse emissions and global warming.
3. Significantly Low-Carbon Footprint
The truth is that we’re slowly killing our planet and need to change. Maybe the damage wasn’t too visible a few decades ago, but with earthquakes, wildfires, rising sea levels, and air pollution, things are escalating quickly. So, instead of asking how much do solar panels save on your bills, you should focus on how they could save your life and the lives of future generations. Since solar energy is a renewable energy source, you can significantly reduce your carbon footprint following the installation.
Solar panels produce little or no emissions when they convert light to electricity. The average American household produces nearly 15,000 pounds of carbon dioxide each year per kilowatt, hence you can reduce your carbon footprint by 3,000 pounds per kilowatt annually by going solar. So, imagine how much a 5 kilowatts residential system would save, especially during summer during which we consume more energy.
4. Reduced Water Usage and Wastage
Apart from solar energy, there are other renewable energy sources, including hydropower and nuclear energy. These sources require a lot of water to generate electricity and leave a large carbon footprint initially during plant construction. For instance, hydropower generation involves constructing dams to control the water flow, resulting in a significant impact on the local ecosystem.
Solar panels do not need water to generate electricity so they don’t hurt the ecosystem. Apart from usage, solar panels can play a big part in solving water scarcity and wastage issues. With less reliance on hydropower, nuclear power, and other conventional energy sources, we can save more water for human use.
5. Reduced Air Pollution
Fossil fuels emit greenhouse gases upon combustion, including carbon dioxide, sulfur dioxide, nitrogen dioxide, carbon monoxide, and methane, etc. The impact of these gases is visible in major cities like Beijing, California, New York, and New Delhi, etc. Dirty air and smog are extremely dangerous for our health and also make our cities look bad.
Solar panels can help with this problem. With more clean energy generated, we can reduce our dependence on fossil fuels. By reducing power generation from fossil fuels, we can reduce air pollution significantly.
6. Fight Climate Change
Solar energy is among the most effective ways to prevent or reverse the effects of climate change. By reducing the continual dump of pollutants and greenhouse gases in the air, land, and water, you can allow nature to heal itself. This way, you can prevent climate changes, hot or cold, and make weather patterns more stable.
If you are interested in more details, here we have a thorough discusson on the sustainability of solar panels.
Factors That Determine How Much Solar Panels Save Homes on Energy Bills
There’s no denying that solar energy can help you save money on bills. But the question is, how much do solar roof panels save? The answer to this depends on many factors that influence your monthly energy costs and thus your solar savings. These include:
1. Your Household Electrical Demand and Consumption
Your household electrical demand is one of the most essential factors in determining how much you can save using solar panels. It is also the factor you have the most control over. Every house has several electric appliances, such as central air conditioning and heating, microwaves, computers, TVs, and washing machines, etc.
Prospective solar homeowners generally estimate their potential savings by looking at their utility bills over the years. Theoretically, savings can be equated to the amount of electricity your system is generating. Most solar homeowners don’t generate all their full energy from solar panels. Instead, they reduce the amount of electricity they buy from the grid. The equation is simple: the more appliances you need to power, the more electricity you’ll need.
Let’s look at the wattages of some common household appliances to give you an idea:
2. Insolation
Northern states in the US typically get fewer sunlight hours than the annual national average. This means you’ll generally need more solar panels in Alaska than Texas or California to produce the same amount of energy. As a result, your initial investment would be higher, and depending on the power costs in your area, it would likely lead to reduced savings. Moreover, a bigger solar panel system would require more space. So, you’ll need a bigger roof to go solar in Maine than in Virginia.
3. Usage Pattern
A solar power system generates electricity during daylight hours. This power can be consumed directly, stored, or fed back to the grid. The amount of money you save on bills depends on how much energy you consume from solar panels as well as how much credit you earn from the electric company if you feed the credit with excess power.
4. Local Regulations
How much you save from a solar panel system will also depend onlocal regulations. Utility companies in America offer net metering, and it allows you to make money from solar panels from the surplus energy you generate. If you produce more than you consume, through net metering you have a balance in your favor. You’re not only saving, but using your solar power system as a small-scale power plant.
5. Solar Battery Storage
Homeowners in states with higher electric rates can save more money using solar panels if they install battery storage. Battery storage can offer round-the-clock free power, meaning you can go completely off the grid. Most solar homeowners don’t opt for a 24-hr power system and use it during daylight hours only.
This is useful in states that regularly experience power outages, including Colorado, Ohio, Texas, New York, and California.
6. The Size of Your Solar Power System
The larger your solar power system, the more power it will produce, depending on the insolation, of course. This, as a result, will have a great impact on the amount of money you save. So, you should choose one that is large enough to offer a return on investment. If you install a large enough system to produce energy in surplus, you can export it back to the grid.
This way, you not only save money on your utility bill, especially if you have battery storage. In short, you need to find a system that suits your usage pattern and consumption to save money. Even though you’re not going to save a lot of money by just powering up a couple of ceiling fans and lights with solar power, it can still be worth it as long as you plan it accordingly.
7. Government Incentives
Another reason to invest in solar panels is the solar incentives, such as the Investment Tax Credit. You can set yourself up for up to 26% tax credit up through 2022 and 22% in 2023.
So, if you pay $10,000 for a solar system in 2021, you’d be eligible for a $2600 tax credit. So, no matter how much you invest in solar panels, you will get a decent reduction in your taxes, thereby indirectly saving money.
Plus, depending on your state, you can get more tax credits, and other rebates to save more money on a solar installation.
How Much Do Solar Panels Save Homes on Energy Bills?
From 2019-2020, the average annual electricity consumption was 10,649 kilowatt-hours, which amounts to an average of 887 kWh per month. Multiply this by the average electricity rate as of December 2020 (12.8 cents per kWh), and you’ll find that Americans are spending over $113 a month on electricity.
This means that if you install solar panels that are enough to generate this amount of electricity, you can save $1363 every year.
However, different states have different electric rates so your saving will depend on this. If the tariff is high, even a small solar power system can cut your electric bill significantly. On the flip side, generating 1500 kWh with a tariff of 10 cents will bring you the same result as generating 750 kWh with a tariff of 20 cents.
Most prospective solar homeowners understand that solar panels are expensive. However, they’re not as expensive as they were 20 years ago. More importantly, the savings they achieve in the long run will easily outweigh their upfront cost. In the US, installing solar panels in a home typically costs around $3 per watt. Assuming you install a system with a 5 KW capacity, your expected budget would be around $15,000.
However, if you deduct the 26% federal tax credit, your expected price would now be around $11,100. Depending on your state and the incentives they provide, you can cut this cost further. Lastly, the government can also make solar panels cheaper as a green initiative. Following installation, a 5-kW solar panel system can save over $25,000 during its service life, as long as the conditions are favorable. So, you can see that the long-term benefit is potentially 2-3 times higher than the initial investment.
High-quality solar panels generally last around 25 years with proper cleaning and maintenance. So, your investment can potentially last this long with minimal maintenance costs. Plus, who knows what the electricity tariffs will be 25 years from now with 2-4% annual increases?
Did you know that you can reduce your energy bill by cooling off your attic with zero energy fans? In this article, we reviewed the best solar attic fans out there.
Conclusion
Solar energy is yours to control, and you can join thousands of Americans in using our sun’s abundance to save on electric bills. By changing the way you power your home, you can play your role in saving the planet by reducing your carbon footprint. With the prices of electricity not dropping anytime soon, solar panel installation offers you a financial lifeline.
How much do solar panels save homeowners on energy bills? Now you know!
For more information on solar energy visit 10 things to consider before installing solar.