These days, solar power is fast becoming a go-to renewable energy solution for homeowners. It offers a reliable, environmentally friendly way for them to cut their energy bills and reduce their reliance on California’s sometimes shaky electricity grid. However, one of the biggest remaining problems with residential solar power is the cost associated with installing it. That makes it difficult for many homeowners to figure out if solar power will, in fact, benefit their budget. To answer that, here’s everything you need to know to decide if solar panels will save you money.
The Cost of Solar
To discuss the subject of saving money with solar panels, there’s no avoiding discussing their cost. Here in Modesto, the average residential solar system provides 5kW of power for an average installation cost of approximately $14,850. That’s a substantial investment for the average homeowner. However, there is a bright side.
The first bit of good news is that the average cost of installing solar panels has remained in decline for over a decade. This means that installing solar panels gets cheaper every year. Plus, the recently-passed federal Inflation Reduction Act extended and expanded tax credits meant to defray the cost of installation for individual homeowners. Right now, this means you could qualify for a tax credit worth up to 30% of your installation costs.
That reduces the average cost of installing a 5kW solar panel system to a more manageable $10,989. That’s still a significant investment, but one that makes far more financial sense when you factor in what you’d gain from your new solar power system.
Estimating Your Savings
The next thing you’d need to consider to figure out if solar panels will save you money is how much power you can expect your system to generate. That depends on how much sun your home typically receives each day. Ultimately, the best way to estimate your potential cost savings is to work with rooftop solar experts like our team at Honey's Air & Solar to figure out your home’s solar power production potential.
Without doing that, though, it is possible to come up with some ballpark figures you can use as a guide. To start with, the average 5kW solar system here in Modesto produces about 20.63 kWh of electricity each day. That means you can expect your system to produce about 7,500 kWh per year.
That number is instructive when you consider that the average home here in Modesto consumes about 8,500 kWh of electricity each year. That means a 5kW solar power system should produce about 88% of the electricity you use annually! Given the average utility cost of 18 cents per kilowatt hour for grid power here in Modesto, that translates into about $1,350 of savings each year.
The Importance of Net Metering
It’s worth noting that you’ll also need to switch to a grid power system known as net metering when you install a solar power system on your home. Since your panels won’t produce power when the sun’s not shining, you’ll still need to draw power from the grid from time to time. To make the most of your panels, net metering allows you to sell the excess electricity produced by your solar panels back to the electric company.
When that happens, your electric meter runs backward, and your electric provider credits your account for the power you’ve fed into the grid. Then, when you need to draw power from the grid, you don’t pay anything until the credits you’ve amassed get used up. In that way, you can maximize the value of your panels’ power production even when you’re not directly using them.
As an alternative, you could also opt to install a battery storage system in your home. That would let you store your excess power for your own use when the sun’s not out. It also provides you with a handy source of backup power to use if there’s a grid failure.
Consult the Solar Experts
As you can see, there’s quite a bit to consider when you’re trying to estimate the potential savings you’d realize from installing solar panels on your home. However, the experts here at Honey's Air & Solar can help. We can assist you in choosing a solar system that strikes the right balance between generation capacity and cost. And we can provide you with a more accurate savings estimate based on the specifics of your residence. That way, you’ll reap the kind of savings that suit both your lifestyle and budget. We can also help you to make your home more energy efficient by installing new windows, HVAC systems, and ventilation systems that will decrease your electricity usage. So, if you’d like to make solar power a part of your Modesto home’s future, call on the team at Honey's Air & Solar today!
