You’ve probably heard about how solar energy can help save the environment, provide a sound investment for your home, and even reduce your monthly energy bills. But how much can really be saved by installing a solar energy system and where are those savings coming from?
While a home or business owner’s specific solar savings will vary depending on a number of factors such as system type and production, local incentives and the supplier used for any energy drawn from the grid – it’s a good idea to become familiar with where any potential savings actually come from. Once you understand how solar can impact your monthly energy bill, you can decide which solar proposal is right for you.
How Solar Can Help You Save
You draw less energy from the grid.
When you install a solar energy system, your home or business will begin to generate its own electricity from the sun – in effect your roof becomes a little power plant. As the system generates more electricity than your property can immediately use, excess power flows back to the utility grid. In states with net metering, utility companies will pay or credit you for the excess energy your system generates, which in turn helps to further offset your monthly energy bill.
Those credits come in handy when your solar system isn’t producing enough energy to supply your needs, like at night or other times when your system isn’t operating at full capacity. But remember, a solar system will still work to produce varying degrees of energy in cloudy or overcast weather – so you will be producing some of your own electricity on most days!
State and federal incentives help to limit your overall costs.
All around the United States leaders are recognizing that a shift to renewable energy is in the best interest of our country and our planet. In addition to curbing harmful, ozone-depleting emissions from traditional coal-, oil- and gas-fired power plants, solar energy has had a huge, positive impact on the U.S. job market: The solar industry employs nearly 209,000 people in the United States, between manufacturing, installation, sales, and development – and by 2020, that number is expected to double to more than 420,000 workers.
The potential for growth is incredible – and that’s why state and federal incentives – like the Investment Tax Credit (ITC), which offers a 30% credit of installed costs to those who own new solar systems – are available to encourage renewable energy adoption and preserve lucrative new “green” energy jobs. States can offer their own rebates and credits as well, like New York which offers two financial incentive programs: a rebate program for residential owners of $0.30/W, and a state income tax credit that can reduce the net cost by 25 percent (up to $5,000).
You can sell back the SRECs associated with your system.
Solar Renewable Energy Certificates, or SRECs, are a unit of measure used to account for solar electricity production and can become a great source of savings for your home or business. Depending on the solar system you choose, for every megawatt hour (MWh) of electricity that a solar energy system produces, a corresponding SREC is created and can be bought and sold to transfer the right to count that solar electricity.
In some states, solar panel system owners can sell their SRECs to third-parties that need to buy SRECs in order to meet specific renewable energy requirements for their state or territory. Your system will continue to generate SRECs throughout its useful life, and you’ll need to decide how to best manage them – whether its selling your SRECs on your own, or handing that task over to someone else to sell the SRECs on your behalf.
Long-term protection from changing utility rates.
No more surprises! Going solar can help you lock-in a known electric rate, that can reduce the overall cost of your monthly energy bills and provide price certainty into the future based on your system’s output. With locked-in rates, it will be easy to estimate the fixed cost for electricity for the life of your solar contract.
Now that you know the four main ways you can save with solar, you may be wondering what solar costs. Any reputable solar company should give you a detailed breakdown of exactly how much you will spend and save with a solar energy system. Most leading solar providers will also include monitoring services for your system. It’s also important to find a solar provider that closely monitors renewable energy policy on a state-by-state basis – in order to gauge and work through any impact for current or future customers.
In many ways, your solar power system is an investment – one that is capable of generating annual returns that can help you control your energy costs for the lifetime of your system, while enhancing your biggest investment: your home or business. The average U.S. household will likely break even on their solar energy system in just 7.5 years, but in many areas that number is even lower.
So while all of these factors have an impact on the amount of money you spend on your energy needs, the most important factor when going solar is finding a provider who is committed to helping you find the system and financing that works for you.
Explore your options and see how solar can help you take control of your energy use and budget!