5 Ways Solar Energy May Save You Money

What is Solar Energy?

Solar Energy is one of the most well-known and talked about renewable sources of energy. Solar Energy (also known as solar power) comes from the sun and is converted into either thermal or electrical energy by modern day technologies. Solar Energy is the cleanest form of energy and is the most abundant renewable energy source that is available to us.
Renewable energy provides us with the potential for a cleaner and more stable power source, rather than simply depending on power sources that are finite and generate harmful pollution. While a benefit of utilizing Solar Energy is the promise of a healthier environment, the benefits do not end there. Solar Energy is also very cost effective. For example, installing solar panels on your roof may save you more money then you realize, and you will be helping to promote clean energy! Wary of “going solar”? You are not alone on this. Many Americans fear that the installation costs of solar energy equipment, such as solar panels, are too expensive. The most asked question about solar power
is “does solar power really save you money?” The answer is yes. How much you end up saving will vary from household to household depending on a few factors. Just remember that cost savings of solar technology (i.e. solar panels) will outweigh the initial installation costs and you will also reap other economic benefits as well.

Five Ways That Solar Energy May Save You Money

1. Save Money on Electric Bills with Solar Panels

When you install solar panels on your house, you are no longer heavily relying on a utility company to provide you with electricity. After installing solar panels to use as your home’s primary source of power, you will receive free energy from the sun. When the sun is not visible, such as during a storm or at night, then your electricity may be provided by the local utility company in your area. But remember that if you power up enough solar surplus in your batteries during the day you can support yourself during times of shade or at night. This means you will not have to depend on your utility company for energy.
In the event of continued bad weather or shade at no point do you have to fear being left in the dark,
you can always depend on the local utility.

Calculating how much you are currently spending on electricity is a helpful step to understand how much money you will end up saving with solar energy. As of 2018, the average home in the U.S. consumes 897 kilowatt hours (kWh) of electricity per month. Bills vary by state and region, and the cost per kWh differs as well. To estimate your average energy bills, multiply the average home’s electricity usage (897 kWh) by the cost per kWh in your state for that given month. For example, the average cost per kWh in August for Iowa homes was 14.57 cents, which amounts to an average bill of about $130.70 (14.57 cents x 897 kWh) that month.

Your state may experience 100-degree heat waves in the summer or maybe you are more familiar with freezing cold winters. Your energy use is bound to be more expensive based on where you live. Oh, do not forget to add in the annual 2.5-3% rise in electric bills. Solar power is starting to look pretty cost effective huh?

Again, with solar panels you just have to worry about installation costs and the events when the sun is not accessible. According to Energy Sage, the 2018 solar panel installation cost is $11,380-$14,990 (after tax credits). This is 6.5% lower than 2017 installation costs, and this number is projected to continue to decrease as solar panels become more efficient.

2. Save Money with Tax Credits

Each state has an incentive program for installing solar panels, meaning depending on where you live there are various tax credits for making the environmentally- friendly decision of going solar. For example in the state of Maryland, residents are offered clean energy grants and Solar Renewable Energy Credits (SRECs) as an incentive for installing solar panels. Below is a breakdown of how much solar power installation will save you if you are in a state with SRECs (such as Maryland):

 

The Federal Government also has tax breaks available to those making the switch to solar energy. The government will pay for up to 30% of your solar panel installation cost, making the solar panel installation incredibly affordable. Would your utility company give you money back so readily? Didn’t think so!

3. Solar Water Heating Savings

 

Solar power does not have to be limited to simply solar panels. There are other incredible various forms of solar energy that can save you money. Solar panels will help reduce your electric bill, but what about your natural gas bill? A solar water heating system works similarly to solar power, as you can use the energy from the sun to reduce your dependence on natural gas or oil based energy sources. Solar hot water systems capture the thermal energy from the sun and use it to heat water for your home.
The payback and savings for a solar water heating system will vary due to how your water is currently heated. For example, the payback period for a solar hot water system that swaps the place of natural gas will be a longer period than one that replaces electricity or gasoline. This is due to natural gas being a comparatively less expensive fuel than the other two traditional energy sources. If you decide to install a solar water heating system on your roof, then you can expect significant annual returns dependent on your water use. Do not worry about the solar water heating system taking up too much space on your roof. They are much smaller than they were back in the 1970s, and many people have both solar panels and solar water heating systems fitting well together on their roofs.
As with solar panels, solar water heating systems are also available for tax credits and rebates. For example, a $5,000 top-of-the-line solar water system will end up cost you $3,500 after tax credits in most states.

4. Solar Panels and Electric Car Savings

Electric cars are no longer just a possibility for the future, they are now part of our reality. Multiple car companies, from Nissan to Tesla, are investing and investigating methods to bring more electric cars to the market. While electric cars are an ideal solution to gasoline guzzling ones, the price of charging them within your home can be quite costly. Solar panels may be an opportunity for cost savings if you own, or would like to own, an electric car.

You will need to calculate how much electricity your car will use in the future to decide the number of solar panels you will need to install. The EPA rates this based on how many kilowatt-hours (kWh) it takes for the car to drive 100 miles. Then they convert that number into which they convert to a “miles-per-gallon equivalent” (MPGe). You can use sources such as FuelEconomy.gov to find and compare the MPGe ratings for all of the electric vehicles on the market in the U.S.
Once you know how much electricity your car will rely on to charge, then you can install the necessary amount of solar panels to corollate with the energy use of the car. Do not worry, tax credits of 30% and other rebates will also apply to this investment and you will save money in the long run. Imagine how expensive it would be to charge your electric vehicle at home along with the other necessary appliances (ex: refrigerators and air conditioning) that are also relying on electricity. Solar panels would decrease your electric bills once again!

5. Metering Credits from Solar Power

Picture the perfect weather day. No one is home because they are outside playing at the park and the air conditioning does not need to run. At this time your house is at peak energy efficiency and your solar panels are still churning out green energy. What does this mean for you? Your home could be a beneficiary of net metering. Net metering is when electricity goes through your meter and out to the grid. A digital meter on your home will record the amount of electricity moving in each direction, i.e. into the home and as it leaves the home, and the “net” part of the term notates that the homeowner pays the “net” amount of electricity used by the home, minus the extra sold back to the grid.
From a homeowner’s perspective, this is a no-brainer. You use what you need to, and then you have a ready energy market to buy up your surplus energy. This means a lower electric bill and additional solar power savings.

Not every state allows net metering, and the ones that do have varying policies. There are 44 states that already have mandatory net metering rules. Alabama, Mississippi, Tennessee and South Dakota do not have net metering policies. Texas and Idaho do not have mandatory state-wide net metering rules, yet in some of their cities, energy providers offer net metering.
Most of the states with net metering rules have set retail rates for surplus electricity. This means that utility companies pay you the same rate it charges when it sells its electricity to you. About 10 states have a different policy where utility companies pay consumers “avoid costs rates,” which are basically what it cost the power company to make their electricity and these are always lower rates than the
retail rate.

Conclusion

Solar Energy is a renewable energy source that is getting cheaper and more energy efficient to use within our homes. If you are looking for a way to save money, and also save the environment at the same time, then do not hesitate to start investigating how much solar power will save you. You may be surprised at how much you will save by installing solar panels or a solar water heating system (or both!)

Sources:
“Electricity Rates By State”. Choose Energy, 2018. https://www.chooseenergy.com/electricity-rates-by-state/
“Solar Panels and Electric Cars: Can I Use Solar to Charge My Vehicle?” EnergySage, 2018.

Solar Panels and Electric Cars: Can I Use Solar as an EV charger?


“Solar Water Heating and Solar Space Heaters Explained”. EnergySage, 2018.

Solar Water Heating and Solar Space Heaters Explained


“Solar Energy Savings.” EnergySage, 2018, https://www.energysage.com/solar/cost-benefit/solar-energy-
savings/.
“4 Ways Solar Panels Help Lower Monthly Bills”. Home Selfe, 2018. https://www.homeselfe.com/4-
ways-solar-panels-help-lower-monthly-bills/

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