A team of budget-crunchers from California's Lawrence Berkeley National Laboratory put their calculators to work analyzing actual savings solar panel owners realize after installing a system.
Even after accounting for "all costs" of getting the suncatchers put in, the experts determined that the median household — 76% of those studied — saved about $691 each year, according to the report and a story from the Santa Cruz Sentinel. The study said the median household saves $1,987 per year on utility bills alone, which helps a homeowner not only pay for the installation but make a serious profit.
The story notes that low-income households in states with high electricity costs, such as Hawaiʻi and California, enjoy the most savings, at more than $800 a year even with payments for the installation.
What was studied?
The study included 500,000 households in 2021.
"This is one of the most comprehensive, household-specific, national estimates of rooftop solar impacts on household energy burden," lead investigator Sydney Forrester told the Sentinel.
The article notes that the study was "based on estimates of income, household utility bills, local electricity prices, and consumption." Most case studies were single-family homeowners. But some multifamily and rental properties were included.
Systems can cost up to $15,000 to $22,000 or more, depending on the size, according to MarketWatch. Fortunately, government tax breaks provide an up to 30% tax credit on installation costs. The amount was raised in 2022 after the study was completed.
Why are the findings important?
The study is a comprehensive look at how unique factors impact solar savings. In the South, electricity costs from "conventional sources" are lower, negating some of the savings from sunpower, per the Sentinel's report.
"For low-income Southern families, the cost of solar exceeded the benefit by $435 a year," per the story.
Rising power bills during the last decade — on average nationally from 13 cents to 17 cents per kilowatt-hour, according to the Sentinel — increases solar's cost-reducing potential.
Important factors to consider are long-term savings and tangential financial benefits, as well. Forbes reports that solar panels are expected to have life spans of up to 30 years, so in most cases sunpower will likely still be gathered after a system's initial expenses are paid in full.
What's more, they produce no air pollution once installed, reducing the production of heat-trapping pollution from alternatives (such as burning oil or natural gas) that NASA links to increased extreme weather risks. And, in turn, higher insurance costs in many areas.
When excluding installation and other upfront expenses, the savings are closer to $2,000 a year, on average, per the report.
The Sentinel also notes that the study doesn't account for savings realized by storing power in a home battery, such as a Tesla Powerwall, which is now eligible for government tax breaks. This is significant because the packs are opening up new revenue streams for homeowners taking part in virtual power plants, paying them for feeding the grid with their batteries during peak demand.
How does the study help me?
Knowledge is (sun)power. By better understanding all of the factors and costs associated with solar energy in your neck of the woods, you can make the best decision for your circumstance.
Fortunately, free services like SaveOnEnergy can help you compare quotes from installers to make an informed decision. Solar remains one of the best ways to switch from planet-warming, fossil-based energy sources.
Another option is community solar. The programs provide a way to avoid upfront costs and equipment. By subscribing to a nearby farm, you can earn up to $150 in power bill savings. Some quick online research can help you take the next step for that option.
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