Do You Still Have an Electricity Bill with Solar Panels?

Short on Time? Here’s The Article Summary

The article discusses the impact of installing solar panels on your electricity bill. While solar panels can significantly reduce your bill, it's unlikely to completely eliminate it. Factors like service fees, gas bills, and varying energy consumption throughout the year affect your overall bill. Solar panels can help offset these costs, especially if you understand and manage your household's energy usage.

To optimize your system, calculate your energy consumption, consider a production ratio based on sunlight hours, and select efficient solar panels. You can gradually increase your solar system to become more self-sufficient. Additionally, investing in a solar battery can store excess energy for later use. Federal tax credits can also make solar panel installation more cost-effective. Finally, in areas with limited sunlight, a solar generator can provide backup power.

Introduction

When installing solar panels, one of the big upsides is that your electricity bill will go down. But it’s not as simple as having no electricity bill.

As long as you rely on any municipal energy, you’ll always receive a bill, but may not actually have to pay money. 

We are going to break down the costs you will have to pay as well as how to reduce them.

What Makes up Your Electricity Bill

There are a number of factors that go into your electricity bill apart from your actual consumption. The most important of these is your service fee. This is normally a flat amount independent of your usage.

This bill won’t go away just because you’re using solar energy, but it can be offset - we’ll explain how later. 

Secondly, you will still get the same gas bills. These will be unaffected by using solar power.

But most of your electricity bill comes from the grid energy that you use, and this will be reduced by having a solar system.

Understanding Your Household Consumption 

When working out how solar will impact your electricity bill, it is vital to know your household’s annual energy uses.

The U.S. average is around 10,715kWh (kilowatt-hours). However, averages vary between states.

It’s also important to know your monthly consumption. Maybe you use more energy in summer because of air conditioning, or in winter because of heating.

Another factor to take into consideration is the changing seasons and how they affect the amount of sun your solar panels receive. 

These factors are important in determining how much energy you need to produce from your solar panels to eliminate your reliance on the electric grid, and what system you need to achieve that.

Why Go Solar?

Going solar helps to keep your electricity costs down while also doing your part to save the environment. You can protect the planet while saving money, a real win-win. 

Another financial benefit is that it frees you from being so dependent on grid electricity with its fluctuating rates. The higher your current rate is, the more you will save with solar. 

It also means that you will have power during emergencies and when the power is out. 

Becoming Totally Self-Sustaining

Using what you know about your energy consumption, you can tailor your solar system to fit your needs. 

If you want to be totally self-sustaining, you need to install a solar system that can exceed your total consumption

While your consumption won’t be the same every month, there is something called net metering that you can use to your advantage. 

Because your solar panels still connected to the electric grid, if you produce more energy than you consume, you will have a net credit on your electricity bill.

This means that you have put more energy into the system than you have consumed using your solar panels, so the electricity company then effectively owes you money on your bill.

While you don’t get paid out, this reflects as a credit with your electric company.

That credit can be used to offset costs when you either use more energy or receive fewer sunlight hours. It is possible to avoid paying an electricity bill at all using solar panels. 

You can also manage to break even on your solar panels. 

Rather than having to do complicated calculations, you can purchase off-grid solar kits that are designed to get a whole house to run on solar energy. 

What to Install

So the question becomes, what do you install to optimize your system to meet your needs?

Luckily, installing solar is not a complicated process. You can even do it yourself with a solar panel kit. While there are many different components, a kit covers all your bases. 

While it may be a bigger upfront cost, using high-quality solar panels will cut costs in the long term.

Solar panels will save money in the long term and are much better for the environment then relying on energy produced by burning fossil fuels.

Work out how much of your consumption you want to convert to solar power. We have a helpful calculation later that will show you how many panels you will need to do that. 

Going Off-Grid

In order to achieve 11,000kWh, you don’t need an 11,000kW system. Two factors influence how many panels you need - the wattage of each panel and their production ratio.

A 100-watt panel receiving 6 hours of sunlight will produce around 600 watts per day. 

The production ratio indicates the efficiency of your solar system. An average production ratio is between 1.3 and 1.6. More efficient panels can have a production ratio of 1.9, like these 200W solar panels.

This ratio depends on the amount of sunlight your solar panels get. Sunnier areas have a higher production ratio, making each solar panel more efficient.

Some solar panels are designed to be more efficient, so that will also impact the production ratio. 

Inverter

An inverter is an important part of your solar power system. It takes the direct current (DC) produced by the panels and stored in the batteries and converts it into AC that can be used in your home.

How Many Solar Panels Do I Need?

The way to calculate the number of solar panels you need is to take your total power consumption (in kWh), divide it by the production ratio, and then divide it by the wattage of your solar panel.

So if you are using the panels we just mentioned, at 200 watts and a production ratio of 1.9, and your house needs 10,000 kWh in a year, the formula works out as follows:

10 000/1.9/200 = 26 solar panels.

While 26 panels may sound like a lot, this is the number you need to make your home entirely self-sufficient. 

One of the best parts of solar systems is that you can gradually grow them over time to move more and more of your energy consumption over to solar power. 

Ways to Reduce An Electrcity Bill with Solar Power

If your electricity costs are still high after installation, there are a few things that could be wrong.

Malfunctions

Firstly, it could be an issue with the performance of your panels. In this case, get a technician over to look at the issue.

Miscalculated Consumption

But the most likely problem is that your consumption is higher than what your solar power system is producing. 

If the average household uses around 11,000 kWh of energy in a year, that works out to around 900 kWh per month.

There are a variety of different panels on the market and you will be able to find something that works for your price point. 

The higher wattage of your panels, the fewer you need.

Overall, solar panels have a big return on investment. 

Invest in a Battery

Something else that can help you to reduce your costs over time is investing in a deep-cycle solar battery.

These batteries store solar energy, allowing you to make the most of your sunshine hours.

This means that you are not wasting unused solar energy generated on a home. 

One of the main advantages of a complete solar system is that they are expandable, allowing you to add as many batteries as you need to.

This means you can continually adapt your system to ensure that it is meeting your household’s needs. 

Federal Tax Credit

As an incentive to help more people move toward clean, renewable energy, the federal government has implemented a federal tax credit.

For solar systems installed between 2020-2022, you can claim back 26% of the cost of installation back.

This, on top of all the other benefits of solar, makes it a real no-brainer to make the switch.

Taking advantage of these tax credits will massively increase the cost effectiveness of your solar panel.

Buy A Generator

Maybe you live in an area with limited winter sun. In that case, something like a solar generator would perfectly suit your needs. 

It is effectively a portable power station, able to be charged alongside your rooftop solar panels.

This generator, with its 3,000-watt power inverter, allows you to store a large amount of power, and have easy access to it at any point. This is especially useful in emergencies.

The Ultimate Solar + Storage Blueprint (Mini Course)

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