The number one question consumers ask when considering a solar power system is: How much money will I save? While plenty of consumers are highly motivated to install solar power systems for their myriad environmental benefits, expensive initial costs can be a significant deterrent for signing on the dotted line. Find out how much money you could save with solar power to help weigh the costs of investment with your potential returns.
Calculating Your Savings
Each household is different, and will therefore see varying rates of savings depending on energy usage and the cost of initial investment. A solar power system costs around $15,000 for an average three-kilowatt system. This price can rise to $50,000 or more depending on the system.
While the initial cost can be hefty, homeowners see immediate monetary benefits that make the investment worth the price. Many solar companies offer plenty of financing options to make paying the initial costs easy.
If you install a three-kilowatt solar panel system in your home, it would create about 450 kWh per month if it received the average amount of sunlight. The costs of your energy bill varies state by state, but on average is about $0.10 per kilowatt. At 450 kWh per month, this amounts to a savings of about $45 per month. If your price per kilowatt is higher than the average, or if your solar panels create more energy, you’ll save more money accordingly.
Google recently partnered with Project Sunroof to help homeowners calculate how much they would save over a 20-year solar lease based on their location. Using the same technology that makes Google Earth possible, this service creates a 3D model of your home’s roof, estimates how much sun the panels would receive throughout the year, and how much money they would save you in the next 20 years. This tool is incredibly helpful for homeowners looking for a basic idea of what they would save, although actual amounts may vary.
Unlike traditional electricity systems, solar power has a solution for cutting costs on energy your household doesn’t use. The net metering system enables homeowners to receive credits on their electricity bills through their utility companies for energy their solar power systems produce but that they do not use. This electric meter runs forward and backward, so the company only bills the homeowner for energy used based on the net reading. In turn, a homeowner can use the money he or she saves during months of low energy usage to finance times of higher usage.
Federal Tax Credits and Rebates
On top of the average monthly savings you’ll enjoy by cutting down on energy consumption, you’ll also receive significant financial benefits from federal and local governments. The federal government issued an extension for a 30% tax credit until 2023 for those who decide to switch to renewable energy. In addition to this credit, local agencies may also offer additional rebates and incentives. Find out if your state offers a tax credit. Keep in mind that these incentives are only available to homeowners who purchase their solar power systems, not those who lease.
Safeguard Against Rising Electricity Costs
Electricity costs in the United States are constantly fluctuating, but U.S. Energy Information Administration projections anticipate a consistent rise in residential electricity price in the next few years. Part of what drives the climbing cost of fossil fuels is the limited amount of coal and natural gas available on Earth. Unlike the sun’s energy, which will last as long as the sun stays alive, fossil fuels have a cap. As the price of electricity continues to increase, consumers who opt for solar power will enjoy a safe zone of permanent price stability.
A Positive Impact on the Environment
Many homeowners who opt for solar power aren’t only thinking about how much they’ll save in electricity costs. They’re also taking into account the positive outcomes for the environment. Solar panels power households with clean, renewable, and sustainable energy. It reduces the globe’s dependence on fossil fuels and helps fight against greenhouse gas emissions. Reducing your household’s carbon footprint and creating a better tomorrow are priceless.