Solar Energy Bills: Understanding the Impact and Savings
Most home improvement projects, including solar panel installations, are started and completed during the spring or fall seasons—when the weather is more comfortable and predictable. As homeowners watch their utility bills steadily rise as the winter months give way to spring, lower solar energy bills become especially enticing.
In a March 2021 Modernize survey, 40 percent of homeowners said they are actively pursuing home improvement projects to save money on their utility and electric bills. Solar energy is a reliable way to save money on energy bills in the long-term.
In California, for example, electricity usage is about 50 percent higher in the summer than in the winter, according to the LA Times. However, it’s important to note that installing solar panels does not happen overnight. From finding a contractor and evaluating quotes to ordering and waiting for supplies, the project could last weeks—or even months.
Powering your home with solar energy is an investment. As you vet and select the best solar energy contractor for your project, be sure you understand the scope of your future solar energy bills and cost of utilities.
Solar Energy Bills: How Much You Can Expect to Save?
There is no one-size-fits-all to describe or break down an electric bill with solar panels. Really, what you will save on your utility bill depends on many factors. The best way to get as close an estimate as possible is through the reliable, local, and expert contractor installing solar panels for your home.
Regardless, prepare yourself with important questions and informed expectations for your solar paneling project as you vet contractors. For example, while a little tongue-in-cheek, you could ask a contractor if you might expect a really good month of savings every once in a while that mirrors the astonishing savings a couple in Long Island, New York, experienced last year.
“A year and a half ago, Melanie and John Maiorca’s electric bill topped $200 every month. Last month, they paid [the local utility company] a whopping $11,” the local newspaper Newsday reported. And while that amount was uncommon (even newsworthy, in fact), average savings were sizable. The Maiorcas told Newsday their post-solar-panels electricity bill is “$80 less a month.”
Interestingly, that figure correlates with California’s savings projections for its upcoming requirement that homes built after January 2020 be equipped with solar panels.
“California projects the new initiative will save consumers about $80 on monthly heating, cooling and lighting bills,” according to CNBC. That figure is based on a 30-year mortgage and so the average figure is spread over time, which is how massive savings are calculated when accounting for solar paneling for homes. One reason is the system itself, which is an initially high-price investment, as significant home improvements often are. And even that number has dropped drastically in recent years.
Where Solar Panels and Electricity Bills Intersect
Today’s solar energy market has contractors stepping up their game to compete in an increasingly saturated arena. For example, consider the 10 states CNBC deemed to be “leading the way in solar.” Each of them has seen a 47 percent drop in solar panel installation prices over the last five years, according to the Solar Energy Industries Association. Learn more about solar panel installation in those states, and find pertinent information to help you save on your solar installation.
Take a look at the 20-year savings detailed in the table below to get an idea of what long-term savings can measure up to.
This data serves as guidance for your journey to home improvement. Use it during your conversation with contractors in your area. Ask for this level of detail in your estimates and if jargon or complex wording seems confusing, ask for clarification. A trusted contractor will be glad for the opportunity to explain what everything means and, more importantly, what it specifically means to you.
When it comes to solar energy, for example, existing financial incentives could further increase the value of that post-solar-panels bill because you’ll hold it against a potentially much lower initial investment.
Savings with Solar Energy Policies
Chief among the incentives is the Residential Renewable Energy Tax Credit, which applies to up to 30 percent of your installation (that’s hard and soft costs combined). For example, Solar Energy International reports that a typical five-kilowatt solar system installation in September 2018 would drop from $15,428 to $10,800 after the rebate is applied. While such a discount is tempting, tax incentives apply during tax season—not before. Some contractors agree to take on the full cost during installation and wait for the rebate themselves. Whatever the case, it’s important to have a clear understanding of how this and other incentives will apply to your present and future solar panel system costs—and your electric bill with solar panels.
With all of these figures in mind, be sure to ask your contractor for an individualized assessment your solar roof panels—or ground-mounted solar paneling if that’s a more favorable route to avoid shade where you live. A trustworthy contractor will examine your current utility bill and study the physical properties and opportunities your house presents to best save you money after installing solar panels for your home.
At Modernize, we frequently speak to homeowners about their home improvement projects. In our recent interviews, 90 percent of homeowners requested a checklist to help them find and vet contractors. Modernize now offers homeowners a free, digital Contractor Checklist as a simple, step-by-step guide to assist with your solar panel project. In a sea of noise, our tools can help you navigate so you can save the highest amount of money in the short term and see the highest return on your investment in the long-term with a switch to a solar energy-powered home.
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