Ways to Know How Much You Saved From Solar Panels

If you’re considering solar energy, one of the first steps is calculating how much you’d save each month by using solar panels. To do this, log in to your electric company account and average your last few electricity bills. You should go back at least six months to account for seasonal temperature changes and fluctuations in price. 

Calculating Your Return On Investment

Maybe you wonder how much do solar panels save and their ROI. The return on investment (ROI) for solar panels is calculated by dividing the system’s total cost by the amount of money it will save you every year in electric bills. For example, if you spend $20,000 on solar panels, you can save $2,500 per year in electric bills, making your solar ROI approximately 10%. This would mean you can recover your investment in solar panels within 8 years. The costs of solar panels are the upfront costs, and annual financial benefits are the avoided electricity bills plus additional incentives. Divide the total cost of the solar panel system by the amount of electricity you save each year, and you will have the estimated number of years it will take to pay off your investment. You should also factor in any costs associated with batteries and grid-tie systems, which will allow you to calculate your ROI by comparing the amount of electricity your solar panels will save you.

Getting An Accurate Estimate Of Your Savings

Whether you have installed solar panels on your home or are still debating the purchase, getting an accurate estimate of your savings is vital. Your savings will depend on the size of your solar system and how much energy you use. In addition, your location can affect your savings as well. A solar panel system can drastically cut your monthly electricity bill. This is especially true if you live in a sunny region. Depending on your location, a solar panel system can save as much as $2,200 per year. In addition, these panels can save you anywhere from ten to forty thousand dollars over their lifetime.

Selling Excess Energy Back To The Grid Via Net Metering.

Selling excess energy from solar panels back to the utility grid is a great way to offset your electricity bill. In most cases, you can sell your excess energy at a discounted rate, which is good for you and the utility. The utility will install two meters at your home, one for your solar panel system and one for your traditional electric meter. The utility will then bill you for the difference between the energy you generate and the amount you use.

While net metering can be profitable, you should not expect to make a significant profit. The money you make on net metering is often only a few dollars. If you’re unsure, ask your neighbors if they’re making money by selling their surplus energy to the utility.

Getting A Tax Credit For Solar Panels

If you have installed solar panels on your home, you may be eligible for a tax credit. The federal solar tax credit, also known as the solar investment tax credit, allows you to deduct 30% of your solar panel installation costs. Congress introduced this tax credit as part of the Energy Policy Act in 2005. Although it was initially set to expire in 2007, Congress has extended the tax credit several times. The current credit rates are 30% from 2016 through 2019 and 26% for the rest of the year. The credit is available for products directly connected to the solar power system and for products needed for installation. In addition, it covers labor and assembly costs, sales tax, and inspections. Depending on the state, the federal tax credit may cover up to 30% of the solar power system’s cost.