Can switching to solar power really help you save on your electricity bills? Let’s talk solar energy savings and how much your utility bill could decrease.
So you’ve heard that switching to solar energy is awesome. But maybe you’re not exactly sure why that is.
Sure, solar panels are good for the environment and even raise your home’s property value thanks to their popular, cutting-edge technology.
And unlike an expensive kitchen reno or backyard pool, adding solar panels is one of the few home improvements that actually saves you money and provides a solid return on your investment.
But can switching to solar energy really help you cut or even eliminate your electricity bill every month?
To find out, today today’s mini crash course will cover:
- What you’re really paying your utility company for
- How solar panels work to power your home for a fraction of the cost
- Why you’ll save money on your electricity bills from day 1 when you switch to solar energy
So let’s start by establishing a baseline. Do you know how much you’re paying for traditional energy supplied by your power or utility company?
How Much are You Spending on Electricity Every Month?
According to the US Energy Information Administration (EIA), the average price of electricity across the country is 13.12 cents per kWh.
Stats also tell us that the average American household uses 911 kWh of electricity every month.
So if we combine both those averages, we have an average monthly electricity bill of $120 in the US, or a yearly total of $1,440.
[bctt tweet=”The average American spends over $120 for electricity every month and over $1,400 per year! ” username=”1stLightSolar”]
And that’s just the nationwide average.
Live in California, Connecticut, Alaska, New York, Massachusetts, or any other state with a higher-than-average cost of living and you’ll be paying a lot more every month (and every year) for electricity:
Here’s the worst part: Electricity prices don’t ever stay the same and they’ll never decrease on their own.
Electricity rates have been increasing at least 2–3% every year, which is higher than both inflation and the cost-of-living wage increases most Americans receive at work.
Why is Electricity So Expensive?
There are several reasons your electricity bills are so high, but the biggest one that’s out of your control is the rate your utility or power company is charging you for electricity.
See, electricity rates have a lot packed into them.
Besides being completely different state-by-state, the EIA says there are several factors affecting the price of electricity, such as:
- The cost of generating fuels like coal, natural gas, etc.
- Business operating expenses of the utility companies, such as paying their employees, advertising and marketing costs, etc.
- Costs to distribute electricity via power lines and grids, and maintaining them.
- Extreme weather conditions and seasonal changes, which create spikes in demand for electricity and raises rates for everyone. Natural disasters can also damage infrastructure and the expense of the repairs gets passed on to customers.
- Complying with government regulations can be costly even though they’re designed to protect our environment.
The largest expense of all these is the cost of acquiring and generating the fuel we use for that electricity:
But what if that 57% cost just disappeared?
There’s no cost to generate solar energy once your solar panels are installed on your property.
The sun’s energy is totally free and will remain so forever.
All you have to do is install solar panels to capture the sun’s rays (that are basically being wasted) and turn them into usable electricity.
Besides following these money-saving hacks to lower your electricity bill, the only way you’ll see smaller monthly bills is by switching to solar energy.
Now’s the time to take your energy needs into your own hands.
How Does Solar Energy Work to Lower Your Electricity Bills?
Without getting too technical and boring, let’s cover the science behind how solar panels actually power your home.
The solar panels themselves house groups of photovoltaic (PV) cells, which are made of highly semi-conductive material. When the sun’s UV rays hit the solar panels, it excites the electrons in the cells and creates electricity.
The electricity that’s generated by your solar panels isn’t exactly friendly for all the devices in your home. It’s DC electricity instead of AC.
So you’ll need to install an inverter to make your generated DC electricity usable AC.
Once the electricity passes through the inverter and becomes AC, it will behave just like regular power you’ve been purchasing from the utility company: it will pass through your wiring to your electrical box and then flow freely to your home.
You won’t even know the difference between solar-generated energy and what you’ve been using all your life when you switch on a light or turn on the TV. You’ll just be happy it’s cheaper.
So How Does Solar Energy Save Money?
Instead of drawing your home’s energy from the power company, you’ll be using the sun’s energy via your solar panels.
Unless you decide to store your generated solar energy on your property in batteries (not totally recommended because they’re expensive), your solar panels are going to produce a ton of electricity.
Instead of wasting all this free energy, you’ll be sending it back to the power grid for the utility company to spread around to the other customers also on your grid.
Don’t worry, your solar-generated energy isn’t being used for free.
You know the electric meter on your house that currently measures how much energy your home is consuming?
When you switch to solar energy, you’ll have an electric meter that works both ways: you’ll be able to see how much you’re consuming from the grid, but also how much energy your solar panels have been contributing every month.
Will you still need to buy electricity from the utility company?
That’s because your solar panels only work when the sun is out (duh!), which means they can’t generate energy for your home to use at night or when there’s a dark, cloudy thunderstorm overhead.
Stay on the power grid and you’ll still be wired for electricity from the utility company as normal.
Only you won’t have to pay so much for it.
See, the process of net metering means you’ll only have to pay the difference (or net amount) between the electricity your home generates and what your home consumes.
So let’s say you generated 1,600 kWh of electricity from your ultra-efficient solar panels during the month and you only used 900 kWh.
While you’ll be charged for using 900 kWh, your account will also be credited for generating 1,600 kWh.
Your energy credits never expire, kind of like rollover minutes in your cell phone plan, and work to lower your electricity bill.
The goal with solar energy is achieving a zero net bill.
You’re still going to have to pay for the costs associated with staying connected to the grid like we discussed earlier. But you’ll be earning significant discounts so paying your electricity bill won’t hit your wallet so hard every month.
The average homeowner is able to offset 70–90% of their home’s energy use with a properly-sized solar array. That means solar owners, on average, save at least $100 every month.
[bctt tweet=”The average solar energy adopter cuts their electricity bill by 70–90% every month.” username=”1stLightSolar”]
That $100 solar savings means you’ll bank $1,200 in one year; $6,000 in five years; $12,000 in ten years; and $24,000 in 20 years.
That’s money you would have normally given to the utility company for nothing!
And homeowners who live in states with much higher-than-average electricity rates will see the greatest monthly savings and speed up their overall ROI.
Think about this: If you lived in Hawaii and faced a $266 electricity bill each month, you could save anywhere from $186–$239 every month by switching to solar energy.
That’s solar savings between $2,232–$2,868 for just one year!
Plus, if you live in a state that offers solar renewable energy certificates (SRECs), you can actually sell the energy your solar panels produce for extra income.
Since solar panels are virtually maintenance free, have zero moving parts, and are built to last, they’ll save you money for the long haul. The longer you own your solar panels, the more you’ll save overall, making your solar investment a breeze to pay off.
While the savings are great and all, you may be nervous about the upfront cost of adding solar panels to your property.
Are the Discounts of Switching to Solar Worth the Initial Investment?
If you want to purchase and own your solar panel array, you’ll need to make an upfront investment to buy and install them on your property. But once they’re on your property, you’ll have free energy for as long as you stay in your home.
Mass production of solar panels overseas means solar panels have dropped nearly 80% in price since 2008.
In fact, the solar energy market grew faster than any other fuel in 2016.
And don’t forget that 48 states offer credits, incentives, and rebates for switching to renewable energy like solar power to discount your installation even further.
Yet as the market continues to saturate, solar panel manufacturing will stop so suppliers have a chance to sell off their inventory. And that means prices will slowly creep back up.
Now’s the best time to make the switch to solar energy and eliminate your electricity bills.
So how do you bypass that upfront investment and skip straight to the saving cash part?
Switch to Solar Energy for As Little as $0 Down
If you don’t have the funds available to purchase a solar installation — even though you still want to score the discounts — there are options like zero-down solar ownership financing, zero-down solar leases, and Power Purchase Agreements (PPAs) to make your dream a reality.
With these solar financing options, you could have a solar array installed on your property for little to no money down and start saving money on day one.
Ready to Start Saving Money with Solar Energy?
Now that you know how much money you could save with a solar array, don’t fall for these all-too-common excuses people use to delay switching to solar energy.
When you’re ready to explore your options, use our tips to do your homework and learn what to look for in a trusted solar energy provider.
Our team of experts at 1st Light Energy will help you determine the best size for your solar system, go over your financing options, and be there every step of the way through installation.
We know you care about protecting the environment and creating green jobs, but your main focus is saving money on your electricity bills. Let us help you save money every month the smart way: by letting the sun work for you.
Got plans for all the money you’ll be saving when you switch to solar energy? Check out this infographic for ideas about how to spend your solar savings if you need a little inspiration: