Cost of Going Solar: How it Will Impact Your Electric Bill
When making changes to your home and lifestyle, it is important to ensure it will be a valuable change. To determine the value of the change, there are several factors to consider, but one of the most relevant is cost. Will this change result in lower expenses and a better quality of life? Are there additional benefits? How impactful are they?
Installing solar panels is an excellent way to make a valuable change and reduce your electric bill. Many homeowners have made the switch, now powering their home on clean, reliable, renewable energy. Measuring the impact of solar varies for each homeowner. There are a few elements to how we estimate your potential savings, including efficient system design, energy consumption changes, connection fees, and ownership with additional storage solutions.
According to the United States Energy Information Administration (EIA), the average household uses about 886kWh of electricity per month.1 As a national solar provider, Blue Raven Solar understands utility costs vary in different regions, powered primarily with traditional energy sources including fossil fuels like coal, oil, and gas in every state. In 2022, residential electricity averaged about 16.09 cents per kWh with some areas as high as 25.68 cents per kWh.2
The average cost multiplied by the monthly average household energy usage is about $143 per month and over $1,700 per year.
Calculating an Efficient System
When requesting a solar estimate, you will be asked to provide utility bills from the past 12 months. This allows our team to analyze your average energy usage and costs to create a custom proposal to offset your monthly bill by 100%.
We also look at your geographic location and the average amount of sunlight your roof receives. Through utilizing tools like Google’s Project Sunlight, we identify the optimal installation placement and calculate how many kilowatts are needed to power your home. These factors help our team design a cost-effective and valuable panel array for each homeowner’s unique home, lifestyle, and needs.
Change in Energy Usage
Sometimes, after energizing their custom solar system, homeowners will use more energy than before because they feel their solar panel system is covering all their usage. They may also invest in new power-hungry appliances or devices, like a hot tub or an electric vehicle. These homeowners are confused when they receive an electric bill with solar panels installed that has not changed or has decreased slightly. They often worry their systems are under performing. However, if they are using more energy than the system can account for, they will undoubtedly have electricity bills reflecting their usage, and it is difficult for an estimate to predict an uptick.
This change in cost with solar panels is especially relevant in winter months, when sunlight hours are lessened and in colder regions like Washington, Minnesota, Idaho, and other states which experience a large amount of snow. Luckily, net metering programs help offset the cost of energy from the grid. Through more hours of sunlight in the summer and any efforts homeowners make to be energy efficient, net metering benefits are available to most homeowners across the country. We try to account for seasonal usage changes as well.
Every state and utility company has different policies for net metering benefits, so check if your state provides these benefits or contact your local utility company for more information.
When you receive your electric bill once solar panels are installed, it will show you how many kWh you pulled from the grid in that period. If your system covers all your electricity usage, it will show 0 kWh, and if the number is negative, that is how many kWh your system sent back to the grid, setting you up to take advantage of net metering.
Monthly connection fees differ depending on the utility company. The connection fee ensures your home can access the utility grid when necessary. You will continue to have a monthly bill from your utility company, regardless of your solar production and offset. This fee is generally around $10-$15. Check with your local utility company to find out the average connection fee amount in your area.
Utility costs are not easily predictable or consistent. In 2022, nominal residential electricity prices grew 10.3%, a 6.5% increase from the 2021 growth rate of 3.8%. Though the growth rate is predicted to slow, 2023 costs are still rising.3 The future is uncertain, so it is difficult to know what utility rates will be. Inflation, regulation, foreign conflict, and availability are a few factors affecting energy prices.
Solar Ownership and Home Storage Solutions
Owning a solar panel system can help homeowners avoid rising costs and the price escalators often built into leases and power purchase agreements (PPAs). By financing their own system, homeowners can lock in their monthly payment for the next 10-25 years. Compare this to annual price increases from your local utility company compounding over the same time period, and you can see how going solar will maximize your energy savings long-term. If you pay for your system up front with cash, it increases the long-term savings by avoiding interest from the solar loan.
Adding a battery backup storage system, like the SunVault by SunPower, is a great option for homeowners who want to pull less electricity from the utility grid. A custom solar panel system with storage will charge the battery with any excess energy production before sending it to the utility grid.
At night when the sun isn’t shining and home energy usage is often at its peak, you can pull excess energy from the battery your system produced during the day and avoid pulling more expensive energy from the grid. Homes without batteries are still affected by power outages, however, homes with batteries can smoothly transition to using their stored energy.
Experts in Estimates
Determining the exact amount of your electric bill with solar panels is difficult considering the various elements; however, through our team of experts, homeowners can determine an approximation of their average monthly savings. Other efficiency efforts, like energy usage awareness, updated appliances, better insulation, and other general home improvements can impact your energy consumption and electric bills.
At Blue Raven Solar, we prioritize our customers’ savings and satisfaction. Our experts give each homeowner a customized savings report to give them the best look into their future with a customized solar system.
Get yours today and see how much your electric bill can decrease!