Solar Panel Savings
There are two main ways to receive solar panel savings: financial returns and greenhouse gas emissions. The financial return depends on your location and electricity rates, but is usually higher than most homeowners expect.
Start by finding out how much your state’s average utility rate is. Then, factor in annual price increases.
Cost
Energy related solar panel savings depend on your location and electricity rates, but it can save you money over the long-term. It can also help you reduce your carbon footprint.
The first step in calculating your potential savings is to figure out how much you spend each month on electricity. You can do this by looking at your recent bills or finding your local electricity rate on the U.S. Energy Information Administration’s website.
Next, determine how many kilowatt-hours (kWh) your solar panels produce each month. You can then use this information to calculate your monthly and yearly savings. You should also factor in any solar incentives, including rebates and tax credits. For example, homeowners in the US who install solar power can receive one SREC for every 1,000 kWh of electricity their system generates. This can significantly shorten your solar payback period. Additionally, you should consider storing your solar energy using efficient storage options.
Energy Related Solar Panel Savings
In addition to saving on electricity bills, solar panels reduce greenhouse gas emissions and conserve water. They also improve air quality. The more solar energy is produced in a given area, the less coal power companies must burn to produce the same amount of electricity. This reduces harmful pollutants, which can cause lung problems in humans and animals. Additionally, the energy saved by going solar helps preserve ecosystems and reduces stress on local wildlife.
The amount of money homeowners can save with a home solar system depends on their electricity usage and the local electricity rates. It also depends on the average number of daylight hours in the area. A solar array that receives six hours of sunshine per day can generate twice as much energy as one that gets three hours of sunlight. The temperature in your area can also affect solar panel performance. It is best to invest in a solar system that will perform well in the climate you live in.
Net metering
A solar power system can reduce your utility bill significantly if you live in a state that offers net metering. In addition to increasing your energy savings, it can also help you recoup the cost of the installation more quickly than you would in a state that doesn’t offer this program.
Most states have net metering policies that allow solar homeowners to credit their home’s electric usage for any excess energy they send to the grid. These credits can then be used to offset the cost of pulling electricity from the grid during times when the sun isn’t shining, such as during the winter.
While the results of individual cost-benefit studies may vary, a growing body of research by PUCs, national labs, and think tanks has found that net metering is often a win for the grid, utilities, and non-solar rate-payers. This is an important finding that should be taken seriously by state public utility commissions as they consider future policy options for distributed generation.
Tax Related Solar Panel Savings
The federal solar tax credit can reduce your upfront solar costs by 30 percent. It’s available for homeowners and businesses that own their solar power systems, or that lease or purchase them through a PPA. It’s also available for homes that have an energy storage system rated three kilowatt-hours or more (starting in 2023). The tax credit is not a rebate but a dollar-for-dollar reduction in your income taxes.
The amount you can claim depends on your tax liability and how many credits you have accumulated. You can claim up to $6,000 in one year and roll over any unused credits to future tax years. If you have questions about your eligibility, consult a licensed tax professional.
In addition to the federal solar tax credit, some states offer additional incentives. These can include upfront cash rebates, property tax exemptions, waived fees and expedited permits. Check out the Database of State Incentives for Renewables and Efficiency to find the right incentives for you.
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If you are interested in learning about how solar panels can help you save money, contact us today!