Solar power is a popular choice for many people who want to reduce their electricity bills. The idea is simple: if your solar panels generate more electricity than your home needs, you won’t have to rely on the utility grid and can avoid an electric bill altogether, right?
However, the reality is more complicated than that. Your electricity bill takes into account not only your energy usage but also other fees charged by your utility company. This means that even if you produce more energy than you consume, you’ll still receive an electric bill.
Despite this, solar power can still help you save money in the long run. In this post, I’ll explain why you’ll still have an electric bill after installing solar panels, but also how solar energy can help reduce your overall energy costs.
Could Solar Power Completely Eliminate My Electric Bill?
While solar power systems can significantly lower your electricity bill, they may not eliminate it completely. In optimal conditions, however, you may generate more electricity than you need, and your utility company could pay you for the excess power you produce. This credit can be applied to your future bills or paid directly to you. Despite this, your utility company will still charge a minimum fee to cover their losses due to scheduled energy production that goes unused.
It’s important to note that installing solar panels is a significant investment and typically takes a few years to break even. Therefore, if you plan to move within the next few years, solar panels may not be the best choice. However, if you do decide to invest in a solar system, studies show that it can raise your home value by around 4.1%, according to Zillow. If you sell your home, you may recoup close to the cost of materials and installation, but not much more. Nonetheless, in ideal conditions, a solar installation can generate returns equal to or several times its cost, making it a wise long-term investment.
The Energy Produced by Your Solar Panels
Homeowners have the option to install a few solar panels to lower their reliance on the grid or to install a more comprehensive system that can cover most or all of their monthly energy needs. The greater the share of solar energy that powers your home, the lower your monthly electricity bills will be.
However, accurately estimating your monthly electrical costs requires calculating the total energy output of your solar panels, which can be a complex process. For this reason, we advise consulting with a solar panel specialist. They will consider various factors that are specific to your location and property, such as:
The Quantity and Wattage of Your Solar Panels
Similar to how some cars are more fuel-efficient than others, some solar panels are capable of generating more electricity from the same amount of sunlight. Opting for high-efficiency solar panels may require a larger initial investment, but it can result in lower monthly energy expenses.
The electricity output of individual solar panels can range from 100 to 400 watts per hour. A professional will tally up the wattage of each panel in your solar energy system and convert that amount into monthly kilowatt-hours (kWh), which is the standard unit of measurement used by utility companies to calculate consumer bills. This number will indicate the maximum energy output your panels can generate in optimal conditions.
However, since not all regions and homes receive the same amount of sunlight daily, the actual energy output of your panels will depend on the factors listed below.
The Roof Angle for Your Solar Panels
The majority of residential solar panels are mounted on rooftops to capture optimal sunlight. However, the amount of sunlight that the panels receive, and consequently their energy output, is influenced by the angle, or pitch, of the roof. Your solar panel specialist will consider the pitch of your roof when determining the total energy output of your panels.
The Amount of Sunlight in Your Region for Solar Power
The amount of sunlight that an area receives can vary naturally based on climate and weather patterns. A greater amount of sunlight results in a higher energy yield, which can decrease the dependence of your home on grid electricity. To determine the energy output of your solar panels, specialists in solar panels will assess both the number of sunny days annually in your area and the daily peak sun hours.
The Cost of Electricity in Your Area
Even in regions with abundant sunshine, there are typically some days each year that are overcast or rainy. On such days, solar panels will not produce as much energy due to reduced sunlight, and your home will have to rely more heavily on grid electricity to power appliances. Electricity rates can differ between states and even cities, with high rates leading to more costly bills for residents. You can examine your most recent electricity bill or contact your utility company for more information about rates in your area.
Installing a solar battery can be one approach to decrease reliance on grid electricity. Solar batteries accumulate excess energy produced by your panels, which can then power your home during overcast days or at night, decreasing or eliminating the need for grid electricity.
The Net Metering Policy of Your Utility Company
Homeowners with solar panels may be eligible for a net metering policy offered by some utility companies. With net metering, homeowners can earn credits for the excess power their solar panels generate. These credits can be applied when grid electricity is needed, which can lower overall electric bills.
If your utility company provides a net metering policy, you will receive a bill at the end of each month or year reflecting the net amount of electricity you produced and consumed from the grid. The more power your panels feed back into the grid, the more significant the reduction in your electric bill.
To estimate the savings that can be achieved through net metering, a solar panel expert can assist in determining the amount of excess electricity that your panels are likely to generate.
What is the Typical Monthly Electricity Bill with Solar Panels?
Determining the average monthly cost of solar electricity is difficult because various factors can influence the final amount, such as the size of your solar array and your geographic location. Additionally, there is a smaller sample size of households from which to derive an average figure. Currently, solar power accounts for roughly 3% of the nation’s total electricity production, including residential and commercial installations. According to the EIA, renewable energy production is expected to grow from 20% in 2021 to 24% in 2023.
Despite the challenges of determining an exact figure, solar power is becoming increasingly attractive for utility companies due to its cost-effectiveness. While fossil fuels cost between 5 cents to 17 cents per kWh, solar energy costs only between 3 cents to 6 cents per kWh. Expanding solar energy production, whether through residential, commercial, or utility-scale installations, could ultimately decrease electricity costs for all customers.
How Does Your Electric Bill Change After Installing Solar Panels?
After installing a photovoltaic array, what can you expect from your utility bill? Various factors can influence the extent to which your electricity costs are reduced.
Your Electricity Consumption Level
The amount of energy you consume is a fundamental factor that influences your electric bill. Your energy usage serves as a foundation number for other factors that can impact your overall electricity costs.
Electricity Rates, Net Metering, and Connection Fees in Your Area
Numerous utility companies in the United States utilize a form of net metering credit to reimburse customers with solar power for any excess energy they generate and contribute to the grid. Additionally, your utility company’s connection fees and potential costs for using electricity during peak hours, known as time-of-use (TOU) charges, can also influence your electric bill.
The amount of Solar Energy You Generate
Your solar panels will probably generate enough energy to significantly offset your electricity usage. For instance, the average monthly electricity consumption is around 893 kWh. On the other hand, a typical home solar panel system can produce between 720 kWh and 900 kWh of electricity each month.
Since grid-tied homes rely on the grid for electricity at night and during overcast days, the amount of electricity you generate and draw from the grid, in addition to your utility company’s policies on customer generation and TOU charges, will influence your potential savings.
The Setup of Your Solar Panel System
A “solar plus” or hybrid solar system enables homeowners to utilize a solar battery during peak periods, which helps them avoid high time-of-use (TOU) charges. To achieve this, homeowners may need to use a load management system or an energy storage system (ESS) that enables a smart inverter to discharge the battery during peak hours. A well-configured solar-plus system can also keep a home powered during an outage.
Frequently Asked Questions
How much power does a 5kW solar system produce per day?
On average, a 5kW solar system generates approximately 20kWh per day. However, the amount of power produced may vary depending on the season and weather conditions. During sunny summer days, the production can go up to 30kWh, while on cloudy winter days, it may drop to less than 10kWh. Nevertheless, the yearly average should remain around 20kWh.
What happens to solar panels after 25 years?
A National Renewable Energy Laboratory (NREL) study reports an average degradation rate of 0.50% for all solar panels. This suggests that even after 25 years, the solar output could still be approximately 89% of its original output.
How much power does a 2kW solar system produce per day?
A 2kW solar system produces around 8kWh per day.
Is solar with battery worth it?
Solar batteries require a substantial initial investment, but can eventually lead to savings on energy costs when used at night or in emergency situations. For those living off-grid, they can be essential components of their energy system. Therefore, it’s worth considering if solar batteries are a worthwhile investment.
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