The cries of “do this and you’ll save money” are heard widely across all platforms. It’s natural—and wise—to be skeptical of these trendy investment opportunities. Solar panels boast the same mantra—go solar and you’ll save money. Is there research to back up these claims? Does going solar actually save money? The answer is almost always “yes”. However, it is more advantageous for certain homeowners to convert to solar power. This article will discuss how to calculate potential savings to determine if you’d be a good candidate for solar.
- Determine yearly electricity bill
The first step to is to calculate the current cost of electricity. The average American family spends about $1,500 a year on electricity. (Take yearly kilowatt-hours used multiplied by your local electricity rate.) This is the amount that will be saved year-to-year. Since it does take time to cover the initial investment of solar, receiving a return takes several years. To determine the breakeven time, use this formula:
Breakeven Point: Cost of switching to solar/yearly electric bill
For example, if going solar costs you $20,000 and your yearly electric bill is 2,000, it will take 10 years for the system to pay for itself. Sound like a long time? It’s important to note that the calculated time will probably be less. Utility costs are volatile. Currently, prices rise on average about 2.1% per year. When generating your own energy, you’re immune to the rising costs of electricity.
- Other Factors
Don’t live in a heat wave? That’s okay. Many homeowners incorrectly assume that solar is only worthwhile in sunny, hot areas. Actually, true savings are dependent upon local electricity costs. If the cost of operating off solar energy is lower than the cost of local electricity, solar is the way to go. Many areas with moderate sun exposure are highly populated with solar panels? Why? Electricity prices can be astronomically high.
Even if an “okay” location lacks direct and constant sunlight, it can be a hotspot for solar due to the high cost of electricity.
- Another type of savings
Who doesn’t love a little extra cash in her pocket? Although financial returns are a huge incentive for going solar, they aren’t the only “savings” attached. Greenhouse gases are either significantly reduced or completely eliminated. In fact, an average-sized system of 6kW prevents a whopping 6.3 tons of CO2 from entering the atmosphere. That’s 12,000 lbs every year. In addition to monetary savings, going solar also comes with the satisfaction of “taking a car off the road.”
For more information about the benefits of going solar, contact the National Solar Project. Fill out this form for a free quote.