The Truth About Saving Money with Solar Panels

Feb. 27, 2024

There’s no denying the fact that solar panels save you money. But just how much money do solar panels save, and are they worth the cost? 

There’s a lot of misinformation out there about solar energy savings. If you want the facts, keep reading. We cover exactly how solar panels save money and how much you can expect to save with a solar panel installation for your home. 

The Cost of Going Solar 

The cost of your solar panel installation will impact your overall savings. When you install residential solar panels, you will start saving money on your electricity bills right away, but you won’t break even until you save more money on your bills than you spent on your installation. The sooner you break even, the more you will save throughout your solar system’s lifespan. 

How you finance your solar installation will also impact your overall solar costs and ultimately, your savings. There are a few options for solar panel financing

  • Cash - A cash payment typically yields the highest savings because you don’t have to worry about fees or interest. However, you will have to make an upfront investment. 
  • Loan - A solar loan is a great option for many homeowners. With a loan, you have no initial investment and spread your payments out over time. But, you will have to pay interest. 
  • Power Purchase Agreement (PPA) - A PPA is an affordable option with no upfront investment. With a PPA, you do not own your solar panels but buy the electricity they generate at a predetermined cost per kWh. 

Solar incentives like the federal solar tax credit will also impact your upfront costs. When you go solar with a cash purchase or solar loan, you will own your solar panels and therefore be eligible for a 30% federal tax credit. The tax credit reduces your upfront costs so you can save more over the lifetime of your system. 

Understanding Solar Energy Savings 

Solar panels save you money by reducing (or eliminating) your electricity bills. They generate electricity using free and limitless energy from the sun so you can meet most or all of your electricity needs without buying power from a utility company. There are, however, times when you can’t generate solar energy, like when it’s dark out. That’s where net metering comes in. Net metering is an incentive system that allows you to trade electricity with your utility. When your solar panels overproduce, you can export the excess to the main electric grid and receive a credit that can be used to purchase electricity from the grid when your solar panels are not meeting your needs. 

How Much Do Solar Panels Save? 

Depending on local electricity rates and your overall electricity consumption, you could save anywhere from a few hundred to several thousand dollars on electricity every year with solar panels. It’s also important to consider the future savings solar panels provide by shielding you from electricity rate increases. When you go solar, you essentially lock in what you pay for power, so you don’t have to worry about inflation and price hikes driving up your costs. 

However, savings vary. For an accurate estimate of how much you can save with solar panels, reach out to Boston Solar for a free assessment! 

Factors that Affect Your Solar Savings

Solar panels save you money, but they save more money in some instances than in others. System size, sunlight access, and local electricity rates will all impact your overall savings. 

System Size - The more solar panels you have, the more electricity you can generate. If your roof is not large enough to support the number of solar panels you need, you may not save enough money for solar panels to be worth it. 
Local Electricity Rates - The more money you spend on electricity, the more you will save with solar. In New England, we have some of the highest electricity rates in the country, making solar worth it for most local homes. 
Sunlight Access - To generate solar power, you need sunlight. Houses with good sunlight access stand to save the most with solar panels, while shade can reduce savings. 
Electricity Consumption - If you use a lot of electricity, you will save more with solar than you will if your consumption is low. As we transition to all-electric appliances and vehicles, solar energy is becoming increasingly valuable and savings will increase accordingly. 

How to Estimate Your Solar Savings 

Solar energy savings can vary significantly from one house to another, even for homes in the same area. The best way to find out how much you can expect to save with solar panels is with an assessment from an experienced local solar panel installer. Boston Solar offers free solar assessments and can provide an overview of your estimated installation costs and lifetime savings. Our solar experts are here to answer your questions and help you decide whether solar makes sense for your home—no pressure, just facts! 

Find out how much you can save with solar! Call 617-858-1645 or contact us for a free estimate. 

The Truth About Saving Money with Solar Panels

How much will solar save you?
Find out with a free assessment! 

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