Are you thinking of installing solar panels on your home? You’re not alone.
According to reports, the first 3 months of 2022 saw the most residential solar panel installations of any quarter in the history of the US.
Most people think that one of the biggest benefits of solar panels is that they allow you to go green and reduce your carbon footprint. While this is true, installing solar panels can also be a very smart financial move.
If you’re wondering how much money you’ll save when you install solar panels, keep reading.
How You Can Save by Installing Solar Panels
When people think of solar panels and savings, they automatically assume that the only area a solar system can save you money on is your electricity bill.
While solar can drop your bill to nill, it can also save—or even make you money in a couple of other areas.
Reduced Electric Bills
Reduced electricity bills are the obvious benefits of installing solar panels. But, is the energy you get from your panels cheaper in the long run than from your utility provider?
In most cases, the answer is yes.
In the beginning, your system will still be paying itself off each year. Once you have recouped the cost of solar panels (via arguably free electricity each month), the system will usually start to generate a nice return on your investment.
The amount of time it takes for a solar system to pay itself off depends very much on energy prices in your area, the amount of sun your panels get, etc.
In some areas, it can take about 10 years for a solar system to work back its upfront cost. However, in sunny areas closer to the equator with energy prices (like California) homeowners can start seeing a return on investment in as little as 5 years.
Most types of solar panels have a 20-25 year warranty. Modern microinverters, such as the ones we install, can also have warranties of up to 25 years.
If you opt for a grid-tied system, the only thing you’ll need to replace before the 25-year mark is the monitoring hardware. Our monitoring hardware comes with a 10-year comprehensive system guarantee.
This means that besides any monitoring hardware replacement costs, your solar system can produce free energy for a decade or two after it has recouped the initial cost.
Also keep in mind that most types of solar panels will continue to generate power after their warranty period is up.
Higher Home Value
Another area where you can gain if you install solar panels is in home value. Reports state that buyers are willing to pay roughly $15,000 more for homes with solar panels. This means that installing solar panels can produce a higher selling price for your home right away.
The cost to install solar panels can vary widely, depending on the size, types of solar panels, and whether you get a battery bank. With a an average 5kw system size your net investment will be less than 15,000 after federal tax incentives. This means you can see an immediate ROI when you factor your home equity increase into the equation
Potentially Lower Fuel Costs
Besides boosting your home’s value, solar panels can also save you significantly on fuel costs. For example, if you’re thinking of buying an electric car or have one already—the recent improvements in solar technology now make it feasible to charge an EV off a standard residential solar system.
For those who live in the San Francisco Bay area and have a grid-tied solar system without batteries, you can also take advantage of the EV2 time-of-use rate plan in PGE LAND.
Note: Your solar system can allow you to sell energy to the grid at the highest peak rates cost and then buy it back at the lowest cost between midnight and 3PM. This means you can actually receive a credit even if you consumed more energy than you produce in a given month. See our true up bill page.
Depending on how many miles you drive a month, when you have the right-sized solar system in place, this could allow you to run your electric car at basically zero cost, without any need to pay for gas or energy.
Thankfully new electric vehicles allow you to program in charging times so you can automate your vehicle charging to occur at the cheapest times.
If you have the right-sized solar system in place, this could allow you to run your electric car at basically zero cost, without any need to pay for gas or energy.
Potential ROI of Solar Panels
If you’re curious to know exactly how much money you can save by installing solar panels, here’s some quick math you can do to gauge the ROI on installation.
Let’s say you’re going to install $15,000 worth of solar panels on your home, after the federal rebate (which is above the national average cost)—if your roof gets plenty of sunlight, this should be enough to meet your energy needs and sell energy back to the grid to cover tariff charges.
Next, calculate your average monthly energy bill. The average household energy bill in the US is $122 per month. However, if you live in California, you’re probably paying a lot more than that. In fact, California’s electricity prices are among some of the highest in the US. PG&E customers pay roughly 80% more for their electricity than the national average.
Take your monthly bill and multiply it times 12
If it is a $250 monthly bill?
$250 X 12 months = $3,000 yearly.
In this calculation, the $15,000 dollar system will take just about 5 years In California, depending on shading, roof slant and/or azimuth to the sun. The good news is you can expect your system to pay itself off a lot quicker given our higher electricity costs and inexhaustible rate increases. If you live in Californians have endured electricity rate increases up as much as 10% per year average last 8 years. Our abundance of sunshine helps the cause and keeps us smiling!
As a result, you can expect at least another 1.5-3.5 decades of free energy.
In other words, with the right system you could easily quadruple the money you put in. Perhaps even more, when considering the rate in which energy prices typically increase over the years.
Are You Thinking of Installing Solar Panels? We Can Help!
If you want to put your money to work, installing solar panels is a great way to get an awesome return on your investment dollars. However, if you really want to maximize your return, we’d recommend that you fine-tune your system so you can achieve the best long-term return payback while receiving maximum savings.
Not sure how to do this? We can help! Here at the Solar Bill Review Team, we will come out and do a detailed energy audit of your home.
Once the panels are installed, we will return and do periodic reviews of your bill to make sure you’re on the best rate plan.
Ready to go solar? Contact us today for a free quote.