How To Calculate Your Home Solar Savings

One of the most common questions about home solar systems is whether or not the cost is really worth it. It is true that some people would not benefit as much as others from the installation of a solar energy system, but those situations are extremely rare. This typically occurs when there are buildings blocking your exposure to the sun. As long as you have (or can create) a clear view of the sky somewhere on your property, a solar system will probably save you money. The following guidance will help you calculate the cost of solar energy for your specific location.

Calculate Your Initial Cost

You might be surprised when you first inquire about the cost of a solar energy system for your home. On average, they can run from $25,000-$50,000. Needless to say, that can cause a serious case of sticker shock for a great many would-be customers. Still, it is important to remember while you are making your initial calculations that the long-term savings of solar energy will more than offset its high initial cost. Another important thing to remember is that the federal government and most states offer tax credits to offset those costs even further. You just need to check your state's tax code to find the right numbers for your bracket.

Calculate Your Continuing Cost

It has already been mentioned that the home solar systems will save money in the long run. In order to find out how much money they will save you individually, you will need to look at your monthly power bill for the total number of kilowatt-hours used. You should subtract 120 from that number, because your solar panels will generate at least 4 kilowatt-hours per day for you. Multiply the remainder by the price per kilowatt-hour and you will have calculated your new bill for that month. This makes it easy to see how much you will save.

Account for Other Factors

There is at least one factor that could save you even more money. In certain locations, you can actually sell back any surplus power you generate to the grid. You just have to check with your power company to see whether or not this is the case in your specific location. If it is, the way this is typically handled is that the wholesale price of the power you generate is credited to your account. At the end of one year, you have the option to apply that credit to your utility payment or cash it out. While you cannot calculate these savings precisely ahead of time, you can estimate them by calculating your average energy consumption for an entire year.

On average, the return on such an investment amounts to more than 200 percent over a 25 year period. Given the fact that other energy costs will definitely continue to rise, the future could be even brighter than that.

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