Ways That Solar Can Save Money - Methods For Solar Savings.

Team Solarblocks Energy
November 2, 2023
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Ways That Solar Can Save Money - Methods For Solar Savings.

Who does not want to avoid the soaring electricity bills?

The prices of coal, gas, and electricity prices have risen to an all-time high, with electricity prices undergoing a historic plunge in the recent decade. This, combined with the global surge in energy consumption, has staggered the prices of traditional forms of energy, therefore burning a hole in the pockets of many.

Do solar panels save money?

This is where going solar is one of the most ideal solutions to save money.

How much do solar panels save?

Solar panels can save you thousands of dollars in cost and utility bills for 25 years or more. Government incentives and rebates are attractive solar financings that draw householders to this option. On a 6 kW home solar system generating 9000 kWh energy, you can save ∼$1346 on annual energy bills. Moreover, leading manufacturers with a product lifespan of up to 30 years can help you save up to ∼$3000 in utility costs over time.

With a long-term solar investment plan, you can easily maximize potential energy savings and never worry about rising electricity bills.

Reason Behind Soaring Electricity Pricesin The US

The rise in the price of electricity started due to the Ukraine war. Post-Covid saw a sudden increase in energy consumption, bringing in a strong economic recovery but a sudden but weak increase in supply. Natural gas prices tripled since October 2022 while international coal prices went five times higher.

So, when the cost of coal and gas increased, it surged the cost of electricity as well. The price rise initiated pressure on American households as they struggled to keep up with electric bills.

Per the US Energy Information Administration (EIA), over the past 25 years, electricity prices in the US increased by 2.36%, from a national average of 15.12 cents/kWh in 2022, 13.66 cents/kWh in 2021, and 8.43 cents/kWh in 1995. The projected rise in prices for 2024 is 15.45 cents/kWh.

*Data is taken from Statista.com and Utilitydive.com

“Almost one in five New Yorkers are staring into potential multi-generational debt”, said Richard Berkley, executive director of the Public Utility Law Project.

Renewable energy sources like solar offer low-cost energy bills for a lifetime and help save money. In this blog, we will give you an overview of the same.

Do Solar Panels Save You Money?

The idea that you can power your home from electricity generated through sunlight is reason enough for people to shift to the use of solar panels. To understand the question — how much do solar panels save money, here is the answer.

Residential solar is a custom-fit product, which replaces power from the utility grid to kick savings into high gear. For most people, solar is a medium to long-term investment, depending on the payback period. How much money you can save depends on the solar system size, the overall energy stored, and your home efficiency. Like, most systems pay back the owner in 10 years.

A simple way is to break down the monthly cost of your home solar panels and check how much electricity it produces. Now compare it to the cost of electricity from the utility provider to compare costs.

A Solar Payback Period

At first glance, a solar system can seem costly. In New York, US, the average cost of solar panel installation ranges from $13,388 to $18,112. As of July 2023, to the thought — how much do you save with solar panels, the cost is $3.15/W.

Now, how long is the payback period?

A payback period is the amount of time calculated for the property owners to recover the total investment for solar system installation, through electricity savings. This is minus any Government rebates or credits that you get. In NYC, the average payback period is 8 years, per data.

Solar Savings

The first step is to find the combined cost of the solar panels before calculating if solar panels save money. Consult an energy advisor to understand the number of panels needed to power your home and get a quote. This is crucial so you do not bear any excess cost. Get all your questions and queries answered and verified. Once you can reduce reliance on the grid, you automatically save on energy bills by offsetting the pay for the solar panels.

Benefit From Tax Credits

Under the Residential Clean Energy Credit, all homeowners can claim credit after buying a solar energy system. Starting through 2022 till 2032, the credit is 30% without any cap on the total money spent. For example, if you buy a rooftop solar for $25000, after the tax credit, the total project cost will amount to $7500.

Save on Monthly Electricity Bills

Take this example if you want to know how much solar panels save.

  • You spend $400 on monthly electric bills.
  • Now, you install solar panels that cover 80% of your home energy needs. This means you will need 80% less electricity from the grid, so the bill narrows down to $320.
  • If your installation loan is less than $320, you are saving a huge sum of money even while paying for the solar system.
  • Once the loan payment is complete, your panels still produce electricity without trickling down savings.

If you are buying a system upfront with cash, here is how you save money on solar panels.

  • Suppose, your solar power system costs you $30,000 and its average lifespan is roughly 25 years.
  • Now take this cost and divide it by 25 years x 12 months which is $100/month.
  • Keep in mind that your electricity bill is around $80/month, from the previous example.
  • Now, add the $100 monthly pay on the solar system and the $80 electricity bill. You will pay a combined total of $667/month for electricity.
  • Since you paid for the system upfront, remember that $100 isn’t coming out of your pocket every month. Think of it as a return on $320 as that is the amount saved every month on electricity bills.
  • The pay was $100/month for your system, but it is saving you $320/month in energy costs. Hence, you save $220 per month.
  • Your savings will increase over time, which is a bonus. Therefore, as the system cost stays the same, the value saved on electricity increases over time.

Solar Versus Grid Electricity Cost in New York

If you are a Con Edison customer buying a solar system for $20000 and a 10kWh battery for $10,000, this is how much you can save with solar panels and a solar system.

**The format is referenced from Solar.com

Net Metering

With net metering, the utility company or energy provider tracks the excess solar energy produced by your system. You sell this surplus power to the utility provider in exchange for credits and offset the power utilized from the grid. The credit paid back is at the retail price of electricity. This is an efficient way to save money with solar panels.

Your house is metered separately, and for the excess solar generated, you are compensated with billing credits. This shows you the difference between the power you buy and sell.

Time-Varying Rate

If you are thinking if solar panels can save money, did you know this?

In many regions, many homes are on TOU or time-of-use rates. Residents pay different prices for electricity use, depending on daytime or nighttime. Typically, electricity utilized over the night is less expensive than during the day. In some places, electricity rates also differ based on the season.

If you face the same, install a solar storage battery to offset electricity drawn from the grid and utilize the stored solar power in the evening and night. Utilize your battery to consume as much solar energy as possible, to use during the peak hours, just after the sun goes down. This way, you can enhance savings.

Solar Batteries for Cost Savings

Amidst the popularity of lithium-ion batteries, the potential of solar energy storage has multiplied for solar panel savings. The Residential Clean Energy Credit also offers a 30% tax credit on solar batteries.

  1. Solar batteries are rechargeable and can store energy from the grid or panels to be utilized at a later time. Therefore, there is no pressure of constant electricity production and you can optimize power usage per requirement.
  2. In case of blackouts or power outages, battery systems provide essential power backup.
  3. When electricity demand is high and peak tariffs apply. You can switch to stored power from the solar battery to power your home.
  4. Solar batteries qualify for solar state and federal incentives, so homeowners can get a 30% tax credit and rebates on a battery purchase.
  5. They are functional, both during the day and night, and can be used during disasters too.

Consult Solarblocks to work with the best energy advisors and solar installers in the industry. With 25 years of expertise and a long-term warranty on products, we guarantee you unlimited support to transition your home to solar without pinching your pockets. Get your answer to how much do solar panels save. We believe in a direct-to-customer model, so you are everything for us.

We offer specialized services in solar panel installation, service, and maintenance, solar rooftops, and battery installation.

Going solar is a big decision but an easy process. We promise to make it happen for you.

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