We get asked, “How much do solar panels save?” every day. While yes, you will either greatly reduce or eliminate your electric bill, determining your total solar savings is influenced by several other factors, including how you finance your solar system and whether you take advantage of tax incentives such as the 30 percent federal investment tax credit how much you currently pay for electricity and whether you plan to sell your home.
In general, the more photovoltaic (PV) solar energy you produce, the less electricity you have to buy from your utility company. That means your solar savings start as soon as your solar system is activated.
The easiest way to estimate your electric bill savings is to enter your home address into our online solar savings calculator. The next step is to call 1-800-SunPower to get some more details. An energy consultant will help you determine whether your average electricity bill is high enough to warrant the switch to solar ($75+ a month). Then, you can begin to find out: Is my home right for solar? For example, can you generate enough solar energy for your family’s needs, do you have excessive shading on your roof, and does your local utility have solar-friendly policies?
Answering those questions will help you find out how much solar panels can save each month. Then, we’ll set up a free in-person home solar evaluation with a SunPower dealer.
How Much Do Solar Panels Save?
Most people going solar want to know how much solar panels can save on electricity bills. But there are other financial benefits that determine how much solar really saves. Solar can help you:
- Protect yourself against electricity rate hikes. Easily, the biggest reason people go solar is to reduce their energy bills. A typical American family spent about $1,335 on electricity alone in 2018, and national electricity costs typically rise at a rate of about 2.2% per year. In some areas, energy prices spike sharply based on the weather or demand on the energy grid at certain times of day, so going solar can allow you to lock in a set energy price. So, how much will solar panels save you per year? While it varies by customer and time of year, many of our customers say they no longer have an electricity bill or pay just a nominal connection fee each month. (Read about a New Jersey homeowner with a $4.53 monthly bill.)
- Increase your home value. By reducing or eliminating your electric bill, adding a solar panel system is almost always a good real estate investment. According to a recent Zillow analysis, depending on where you live, solar can increase home values by 4 percent.
- Take advantage of federal tax credits. The federal solar tax credit, also known as the solar investment tax credit (ITC), allows homeowners who have their solar system installed by the end of this year to deduct 30 percent of the cost of their solar purchase from their federal taxes. The credit is set to scale down to 26 percent in 2020 and 22 percent in 2021. If your tax bill isn’t big enough in one year to accommodate the credit, it can be rolled over to the next year for as long as the credit is available.
SunPower California customer Paul Devoy was spending $2,200 a year on electricity. After he went solar, he often had just a $2.83 monthly service fee. He points out: What other home investment actually pays you money? A kitchen remodel? No.
“You tell me an investment that you can do that actually is going to pay you money,” Devoy said. “(With a solar system), I can calculate exactly what I’m getting back.”
He’s so satisfied, in fact, that he’s now putting a SunPower system on his new home.
Find Out How Much You Can Save With Solar
Your exact return on investment is also affected by which solar payment option you choose: cash purchase, finance, or lease options all have financial benefits and variable timeframes for you to realize your solar panel’s savings.
But given that you’ll be able to either reduce or eliminate your electric bill, lock in your electricity rate, increase your home value, and potentially take advantage of the solar tax credit and local solar incentives, the return is likely to be in the tens of thousands over the life of your solar system.
SunPower warrants its systems (power production and equipment) with a 25-year Complete Confidence Warranty, and our systems have an expected useful life of 40 years, so once your system is paid for, you’ll enjoy many years of savings.
Ready to see if solar power saves you money? Enter your address into our solar savings calculator or call us at (407) 901-9174.
This post originally appeared on the SunPower Resource Blog.