Solar panels are an excellent investment if you want to make your home greener and save money on your electricity. But, your financial savings can vary based on several different factors.
Before investing in solar panels, it’s crucial to estimate solar savings.
To save you time, we’ve broken down how you can estimate your potential savings on solar installation.
Is Your Home Solar Friendly?
Not all homes are created equal for solar panels. If your home is in a shady area and you don’t get a lot of sunlight during the day, you’re not going to save money with solar.
The solar panels need to go on the least shady part of your home, typically a rooftop. If there are many trees or buildings nearby that block sunlight to your roof, you may want to reconsider.
Do You Have Net Metering?
If you have net metering with your utility company, you can save more money. Utility companies give you full credit for any extra solar electricity that you send into the grid.
The average price of electricity in the United States is 10 cents per kilowatt. If you have net metering available to you, you’ll be credited for that same rate when your solar panels generate electricity. Net metering provides a significant cost saving, but it’s not available to everyone. You’ll want to consult your utility company and ask them about their options.
Compare the Cost for Power With the Cost of Solar
To estimate solar savings, you need to breakdown the cost of your power and compare it to the price of solar panel installation. You can either pay in cash for the panels, take out a loan, or get a solar lease or power purchase agreement.
Be cautious about solar leases and power purchase agreements because they can have hidden costs down the road.
The state you live in will dictate both the cost of your power and the cost of solar installation. Regardless of your location, you should expect to pay several thousand dollars. If you’ve just moved to a new state, it can help look at the average electricity price and consumption in your state. It’s crucial to look into your electricity cost to understand if solar panels are worth it.
Take a look at your electricity bill and find out how many kilowatts of electricity you use in a year. Though your bill typically breaks it down by month, it’s more important to know the total cost for the full year.
You can compare these costs with the price of solar. Keep in mind that solar panel costs will vary each year depending on the year the weather, so you’re going to be getting an estimate.
If the benefits of solar outweigh the cost, you can be confident that solar panel installation is a smart investment for your home.
Now You Know How to Estimate Solar Savings
If you know how to estimate solar savings, you’ll have a much clearer idea of whether buying solar panels is a smart investment. Because solar panels are expensive, it’s important to cross-reference the cost of solar with the cost of power.
This can save you a future headache when you’re calculating your monthly bills!
So why not start configuring these costs today?
And if you found this article helpful, be sure to check out the rest of our recommended housing blogs. We cover a ton of other topics, including other articles related to finance that you’ll love!