Does Home Solar Save You Money?

Written By Alla Levin
April 12, 2021
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Does Home Solar Save Money?

The trend toward solar power has grown in momentum, as evidenced by the over 2 million solar systems installed in the US alone. It’s a move that makes sense for anyone looking for ways that they can limit their carbon footprint or just do the environment a good turn.

Yet, one big selling point for solar panels is that they’ll save you money. So, that raises the obvious question: Will a home solar system actually save you money? If you’re considering solar panel installation, keep reading to learn whether home solar panels will save you money.

Initial Cost

One of the realities of a solar system is that it costs money and not a negligible amount. The average cost for a solar system on an average house runs around $13,000, give or take. Federal and state programs can help defray that cost with tax benefits or rebates. Even so, your system will still mean a sizable initial investment. That means that even if the system saves you money on bills, you must expect to use it for long enough that you reach the break-even point. There is also the possibility that solar companies will need contractors to reinforce roofs before installing the system, which can drive up the price.

Location

Solar panels today enjoy efficiency levels that average 15 percent to 20 percent. That’s a massive leap from even 20 years ago when good panels topped out at around 12 percent efficiency with substantially higher solar panel costs.

While better efficiency makes location slightly less important, your location does matter. Solar panels need direct sunlight to maximize conversion. Southern and southwestern locations still offer the highest return on investment. The farther north you get, the less electricity your system will produce annually. This is especially true during the short, cloudy days of winter.

Electricity Needs

Another factor is how much electricity you need for your home. The more electricity you need annually, the bigger the system you need and the higher the initial cost. By contrast, if you use less than the average, you can conceivably sell the excess electricity to the electric company or get a bill credit.

Does Home Solar Save Money on Bills?

If your primary consideration is whether a solar system will lower your utility bills, the answer is generally yes. Even if the system doesn’t work at peak efficiency, it will still offset some of your electricity needs on a month-to-month basis.

Home Solar Systems and You

The question of whether or not a home solar system will save you money doesn’t provide any easy answers. You must weigh several factors. There is your initial cost, your location, and the size of the system you need to meet your needs. Then, you must weigh whether you’ll live in that location long enough to recoup your costs. As to the question of whether home solar can save you money on your utility bill each month, it can. Curious about other home improvement options? Check out the articles in our Home Improvement section.

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