With so many trendy investment opportunities available in today’s day and age, it’s easy to be skeptical of new products that boast promises of “saving you tons of money.”
ENERGYSAGE — Solar panels are no different – saving money through reducing your electric bill is one of the main appeals and selling points for solar as a product and home upgrade.
The simple answer to the question “do solar panels really save you money?” is yes. That being said, how much you’ll save depends on a number of factors. Direct hours of daily sunlight and size of roof are both important, but local electricity rates play the biggest role in determining how much solar can save you.
How much do solar panels save on electric bills?
The first step to understanding how much solar can save you is to calculate how much you are currently spending on electricity every year:
When you compare the cost of utility electricity with home solar, you should keep in mind that you can expect electricity rates to increase annually. Over the past decade, national electricity costs have increased at a rate of 2.2% per year. Utility rate inflation is an added incentive for solar: when you generate your own energy with a rooftop PV system, you’re taking control of energy costs so that you are no longer victim to changing utility rates.
To provide a snapshot for typical bill savings from a solar installation, the following table offers state-by-state data for 20-year savings estimates with solar. The data incorporates a number of assumptions:
Solar panels reduce your carbon footprint
Financial returns are a major incentive for going solar, but money isn’t the only thing that solar panels save. When you install solar, you’re also improving the environment and reducing greenhouse gas emissions. That’s why the question “How much can solar panels save?” can be answered two ways: how much money solar can save and how much CO2 it can save (avoid being emitted into the atmosphere).
Solar panels can create big savings
Ultimately, regardless of whether you’re looking at finances or carbon emissions, a solar panel system will generate big savings for homeowners.
As the first data table illustrates, 20-year electricity savings from solar can be significant, ranging from the low end of $7k to upwards of $30k. The deciding factor will primarily be the cost of electricity, which varies significantly depending on where you live. Nonetheless, a good rule of thumb is if you live in a state with middle- to upper-level utility rates, solar will be a risk-free investment with major returns.
On the emissions side, as panel system size increases, so do the CO2 reductions in the surrounding environment, making solar an eco-conscious investment.
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James The Solar Energy Expert