How Much Money Will Solar Panels Save Each Month?

Utility Bill

Numbers in regard to solar panels, such as monthly savings, payback period, and others, depend on several factors. These include system size, placement in relation to the sun, location of your home, your energy lifestyle and local electricity costs, among others. The only true way to determine your specific monthly savings is to have a site analysis performed by a solar installer.

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There are also several online calculators that can give you a ballpark idea of monthly and long-term savings. However, using some national averages, calculating the general difference in monthly electric bills incurred by an installed and functional solar PV system is actually quite easy.

Let’s say you live on the temperate Pacific Coast, which includes Washington, Oregon, and California. According to the Department of Energy, the average household in this area pays about $63 per month for electricity. These numbers are for 2002, however, so, assuming a 7% increase in costs per year, that would put the average electricity bill in this region at roughly $108 per month in 2008.

So, assuming a 3 kW system is installed and there are roughly 6 hours of sunlight per day, we can then calculate the system output at 18 kilowatt-hours per day. That translates into roughly 540 kWh per month. After adjusting that number for cloudy or rainy days (decreasing it by 20 percent), we get a more realistic output of 432 kWh per month for the PV system.

The average home on the Pacific Coast consumes about 900 kWh of electricity per month. Therefore, a 3 kW system with an output of 432 kWh per month would save the system owner roughly $50 dollars each month on average. Note that in some months, these savings may be considerably less and in others considerably more.

It is important to reiterate that these are averages. But you can get an idea of how much monthly difference a solar PV system could make. There are a slew of factors that could make the system on your house save more or less than an identical system on the neighbor’s house next door, most of them personal. Remember that the average U.S. household is not nearly as energy efficient as it could be. So you can really stretch these savings and reduce your costs by improving your energy efficiency. Also remember that electricity costs will likely continue to rise at a steady if not increasing rate. Meanwhile your solar energy will continue to be free.

Starting on January 1, 2009, the cap on federal residential tax credits will be removed and PV systems will be as affordable as they ever have been. So talk to a local solar installer today and start saving now.

Posted on January 5 in Solar Electric by .

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