One of the first questions that comes to mind for someone considering solar is: How much money do solar panels save? While the question might seem one-dimensional, solar savings go far beyond reduced electricity bills. Today, we will be looking at how solar saves in three areas:
- Electricity bills
- Tax credits
- The environment
How Much Do Solar Panels Save on Electricity Bills?
Much of the initial attraction of going solar is to reduce the cost of monthly electric and utility bills. But how much does solar actually save on these bills? Well, a lot depends on how much photovoltaic (PV) energy your system is producing.
The more your system produces, the more you can save with solar panels. Typically, a residential solar setup produces anywhere from 350-850 kilowatt hours (kWh) per month. The average home uses approximately 909 kWh of energy per month (according to U.S. Energy Information Administrations), so owning solar can save you upwards of 90% on your monthly electric bills.
At Blue Raven Solar, we are committed to helping our customers start saving immediately. We provide multiple ways to finance your new panels. Blue Raven offers customers the Bluepower Plus+ option, which pays for customers’ first 18 months of solar loan payments. During these 18 months, the only cost that customers will have is a small monthly charge of around 10 dollars to have your panels stay connected to the grid.
All in all, it is our mission to help our customers save tens of thousands of dollars during their solar journey.
How Much Do You Save Through Solar Tax Incentives?
By owning your own solar system, you qualify for tax deductions from the government. In 2021, the government lets owners deduct 26% of the cost of installing a rooftop solar-electric generator, including the cost of any necessary remodeling or retrofitting work associated with the solar installation, from your federal income taxes. Thus, if you were to spend $10,000 dollars on your system, you will receive a $2,600 tax credit. As an added bonus, many states allow for households with solar units to qualify for a deduction on their state income taxes as well.
All Blue Raven Solar customers who have a federal tax liability qualify for the U.S. federal solar tax credit. These tax deductions can be daunting and confusing to figure out, so to make things simpler for our customers, we provide a simple step-by-step guide to make receiving these savings easier than ever.
How Much Will Your Solar Panels Save the Environment?
Another aspect to consider when you decide to go solar is the impact it can make on the environment.
The photovoltaic cells do a number of things for our environment—by which we mean they don’t do the harmful things. Many electric companies are still coal-powered and put out carbon dioxide as a byproduct. In its lifetime, the average residential solar system will offset the energy produced by burning over 80 tons of coal or 175 tons of carbon dioxide. Every system installed could be compared to removing two gas-burning vehicles that drive over 150,000 miles apiece.
Other alternatives to power generation include hydropower or nuclear energy, which both require massive amounts of water. Solar panels use zero water and so there’s no chance of altering ecosystems like expensive dams do or potential pollution via radiation risks. Avoiding unnecessary water consumption, in some states, could also seriously help with water scarcity problems.
The more solar panels a location installs, the less coal power companies burn, which means the air is cleaner. The US Office of Energy Efficiency & Renewable Energy estimated that the pollution reduction could mean the equivalent of saving over 25,000 lives.
The energy generated and the resources spared in doing so is equivalent to planting 4,000 trees. When you install solar panels, you’re not only saving on your bill, owning your power, and giving back to your power grid—you’re joining a larger whole in the effort to reduce pollution and preserve our ecosystem. You are making the difference.
But while saving the world is nice, what are you saving?
How Will You Actually Experience those Solar Savings?
Solar savings come from a lot of angles, but most of them fall to one big question: who owns your power?
Right now, the power company owns your power. And they can decide when that price goes up or how much you get. A solar system on your house gets you out of some or all of that relationship (some customers prefer to get systems that reduce their electricity need but not outright eliminate the need for the public power grid).
But how you install your solar system and who you get it installed through can really change up your future savings.
This gets into purchasing options, which on the surface might seem pretty straightforward:
- Power Purchase Agreements (PPAs)
- Solar Leasing
- Solar Purchase
Each of these purchase options impacts your savings in big ways and often not good ways depending on which one you pick.
Solar Purchase is the easiest to understand: you buy it, you own it. But we’ll get into how worthwhile this simple transaction gets later.
Solar Leasing is a lot like leasing a car where you essentially own it all, but instead of paying to own, you’re paying to rent.
Power Purchase Agreements is where you shift your electric bill to a solar developer. They foot the bill, install the equipment, and you pay them for power instead of the power company.
Those last two options lease equipment or power, your choice. Anyone selling you one of these methods might offer a low buy-in and make it easy for you to jump right into an agreement.
However, you’ll jump right past most of your solar power savings too.
Own Your Power
Without direct ownership of your equipment and power, you don’t benefit from those tax incentives and you don’t even fully benefit from the power savings—which can have a big impact on just how much solar panels save you in the end.
Buying to own, though, avoids all that. Whether you finance it over time or make one big investment, that’s your power. Over the years of saving, you’ll be paying whatever flat amount you agreed to at the beginning. The only reason you pay more for power is if your usage goes beyond your system (and there are ways to fix that).
Get Those Tax Breaks
Another big factor of your savings is your tax deductions. By most statutes, if you do not own your system, you lose out on it entirely. Your developer or power provider gets to turn around and apply it to their own costs instead. Instead of you getting the deductions for installing a green, renewable energy system, your provider gets the deductions for charging you.
Avoid Price Increases
When you don’t own your solar, you’re playing a shell game with your power bill. Instead of paying the power company, you pay a developer or you pay on your lease every month. And depending on the contract you sign, there could be price escalators or other clauses that leech you for those precious dollars you thought you’d save with a solar system.
As we discuss in our article Are Solar Panels Worth It?, the price of electricity has increased by more than 60% in the last 20 years. With how much the world relies on electricity now, it’s foolish to think it won’t do that again over the next 20 years. Whoever is leasing or hasn’t gotten into solar power at all will be bound to the whims of whoever owns their power.
So, What are the Actual Numbers?
At Blue Raven Solar, we’re determined to provide you the clearest picture of your potential savings as we can. We don’t want to give you the runaround. The fact is leasing denies you so many of the benefits you could gain.
We can help navigate you through the process from start to finish. Let’s sum up what we’ve learned so far:
- PPAs let someone install their own design on your house and charge you their own prices for your power. With solar panels you save money IF they’re charging you less than your power bill used to be. And they’re the ones who benefit from the tax deductions.
- Leasing Agreements let you rent a company’s solar system. Solar saves money IF their leasing agreement is a cheaper alternative. And, again, they benefit from the tax deductions.
- Owning lets you have a say in your solar system, your money goes to owning the system, and depending on your situation, that might be ALL you pay for in the years to come. Soon as you pay it off, you basically don’t have a power bill and something you own is contributing to a greener environment.
If you’re considering owning, then let’s talk about what you’d be looking at to get installed.
The Blue Raven Process
First, get yourself a free estimate here. All you have to do is submit your contact information and answer a few questions about your energy use, and our solar specialists will be able to give you an accurate, zero-commitment savings report.
If you take the next step, we’ll send a contractor out to your house to assess your unique home situation and design a solar system that maximizes your sunlight exposure and reduces your power bill by as much as you want. We’ll have you answer some questions about your financial situation and your available financing options. If we don’t think it’s a good idea that you get solar, we will absolutely tell you. We’re not here to make your life more expensive or complicated.
If everything looks good and it’s clear a solar system’s going to be saving you plenty of money to make your investment worthwhile, we’ll get started. Our contractors design your system, help you with the necessary local government permits, and get you installed. The process from decision to installation takes anywhere from 2 to 8 weeks.
Once installed, it comes down to one more municipal evaluation. If the government approves of the installation, we flip the switch and you’re harvesting electricity from the sun.
We’ll be with you every step of the way and can offer you insight and guidance if you’re ever confused during the process. Once installed, you only have to focus on paying down on your solar system bill. Solar power saves on today’s electric bill, tomorrow’s rising energy costs, and depending on where you live, you could even sell your power back to the energy grid (we can help you figure out the answer to that question too!).
Because there are a variety of factors to determine your savings, it’s hard to know how much money you’ll save exactly.
Luckily, at Blue Raven Solar, we’re here to make sure you’re saving as much as you can. We can help you start saving with our free estimate. Whether it’s saving on monthly bills, saving on reduced federal income taxes, or saving the environment, you can start saving with Blue Raven Solar today!