The amount you save by installing solar panels depends mainly on the prices you avoid paying your utility provider for power. The higher your utility rate is, the greater your potential for savings. Even in areas with fewer sunlight hours, people can still benefit from solar savings.
High electricity costs result in solar savings
Any solar-generated electricity you use lowers the kilowatt-hours (kWh) you must obtain from the power grid. As a result, your avoided expenses depend on the amount of energy your system produces and the price of the electricity your solar panel generation is replacing.
The Department of Energy’s National Renewable Energy Laboratory has developed a tool that helps determine the results of solar energy that you can get from a solar panel system.
Savings potential from solar will increase
Solar panel systems can produce electricity for over 25 years. When considering the potential for savings with a solar panel system, you should consider how much you will save in the first year and throughout the system’s lifetime.
This brings up another crucial aspect of solar energy savings: the escalation of electricity rates. Over the past ten years, residential energy prices have climbed by 21 percent, and some states are more heavily impacted than others by these rising costs. Your avoided utility expenses and solar savings will increase as rates increase. Using solar power to create electricity, you effectively pre-purchase your electricity at a much lower rate if you buy the system in cash. You lock in lower monthly payments if you purchase solar panels with a solar loan buybuy solar panels with a solar loan, you lock in lower monthly payments. 
Other variables that influence solar savings
Aside from power prices and sunshine, what other factors influence solar savings? Here are a handful of the most crucial ones to remember:
- Electricity use offset: how much electricity do you use, and can your solar panel system provide enough energy to suit your needs? The more you balance your electricity consumption with solar, the more money you save.
- The cost of installing a solar panel system is determined by various criteria, including system size and equipment quality. Although a smaller system will be less expensive initially, you’ll continue to overpay the utility company if it can’t generate enough electricity to meet most of your needs.
- Financing: Your savings over time may be impacted by your chosen solar financing strategy. Understanding your financing options can help you pay for the solar system through installments.
- Incentives: Other incentives vary by location, utility, and other details. The federal government and utilities offer financial incentives that can help lower your solar expenditures by up to 30%. Solar incentives exist in various forms; depending on where you reside, you may be eligible for tax credits (such as the federal ITC), rebates, or performance-based incentives.
Questions & Answers regarding Electricity Rates and Solar
How does solar energy save money on electricity bills?
You can power your home with solar panels using solar energy without using the electrical grid or paying a utility company. Some solar users may cover 100% of their power needs using solar, which means they pay only minimal interconnection fees for being hooked up to the utility grid.
How much electricity would solar panels save me?
Your overall savings will be determined by numerous factors, including your energy usage, the amount of energy you can create with solar panels, your electricity rates, your average monthly bill, and any incentives available in your area.
How long do solar panels take to pay for themselves?
How much power your home can generate with solar energy, the total cost of installing solar panels, your energy usage, and any incentives or rebates contribute to your payback period, which is based on the same factors as your savings. To find how many years before the payback period starts, you can divide the solar installation costs by the annual amount you will save. If you invested $20,000 in installation costs and your system will save you $2,000 a year on energy bills, your solar panel payback period will be 10 years.
DroneQuote can help you understand how solar can save you money
We act as fiduciary agents to serve your best interests and have a strong reputation for doing right by our clients. If you want to start saving by going solar, then DroneQuote can help you on your journey. Try our services, as we provide multiple quotes, so you’ll have more options and see how much you’ll save with our hassle-free process. Let’s get you started by clicking here.