How Much Do Solar Panels Save – Our Experience

How much do solar panels save, is a question I’m sure you’ve asked yourself if you’re interested in solar energy. Well, after going on the DIY journey of installing solar panels ourselves, we began to track our savings. Read on to see how much we’ve saved over the first two years!

Updated 3/12/2024

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I’m sure you’ve heard solar panels are good for the environment, but you can also benefit from saving money over your solar panel system’s lifetime! You might be wondering if it’s true. In our experience, even with not ideal conditions, we have been saving money each year through the use of the renewable energy.

This is the final article in our Going Solar post series helping anyone on their solar journey. If you missed the previous articles, check them out!
First article: Are Solar Panels Right for You?
Second article: How Much Do Solar Panels Cost? What is Their Payback Period?
Third article: How to Buy A Solar Panel System – Our Experience
Fourth article: How To Install Solar Panels On A Roof & Connect Them

In this last article, we want to share how our system is truly doing after two years of running. The article covers the whole solar viability analysis from the initial production estimates to the actual system cost and payback period. Then shows how much the solar panels at home are saving us and our revised payback period after 2 years.

These are real numbers and specific to our case, but these will generally give you an idea of solar panel savings over time, especially the first couple years. 

Do You Really Save Money With Solar Panels?

The short answer is yes, solar panels save you money on your bills monthly. However, how much one saves will depend on a number of factors. The orientation of your house, angle of your roof, the hours of direct sunlight, and even the local electricity rates all affect how much you will save.

Energysage estimates that the average home can save between $10,000 and $30,000 over the solar panel system’s lifetime. With the average lifespan of solar panels being 25 to 30 years, that’s a potential savings of $400 to $1,200 a year on your electricity bill.

Solar Viability Analysis

To understand our home solar savings, first we needed to know our previous electricity usage to compare. Below is a table showing our energy usage and billing from our utility company prior to solar panels. All this information you should be able to get through your utility company’s online account or your bills.

The previous two years before solar panels, we paid an average of $1,340 a year for 8398 kWh of electricity. There was a slight energy usage increase in 2019.

If you haven’t already, grab our FREE solar panel system cost estimation worksheet below if you want to track your previous energy usage and calculate your own payback period for solar panels. That way you know if solar panels at home are right for you.

Home Solar Estimated Production

Next, to do an accurate comparison, we have the estimated production and payback periods prior to installing the home solar system.

GoGreenSolar’s estimated production was 8,885 kilowatts per year (kWh/year). 
Project Sunroof’s estimate was more conservative at 7,616 kWh/year. 

GoGreenSolar’s proposal was more idealistic. Its the value that our size system, on our pitch of roof, at our location on the globe could idealistically produce. Project Sunroof’s estimate is lower because it actually uses satellite imaging to gauge shade caused by trees and objects to come up with its projection for usable hours of sunlight. Using the Project Sunroof number two years ago, we were theoretically supposed to be able to offset 91% of our energy usage.

Estimations are exactly that. Estimations. It’s the best guess based on what is known at the current moment with the data. The Project Sunroof projection actually turned out to be high compared with reality. However, if we look at the value again now two years later, we see it is more accurate compared to what what we produced. So their algorithms must be getting better and better.

Our Solar Panel System Cost & Payback Period

Below are our costs for the solar panels, including our discount for not financing (aka paying all at once), the solar rebates, and federal tax refund.

So after some revisions to our system based on our utility company’s limitation requirements, our final cost was $6,812 with an estimated 75 month payback period.

Now let’s breakdown our solar panel savings. We’ll use our previous energy usage numbers, the estimated energy productions, and our overall costs for the system.

Home Solar Panels Savings Breakdown

Okay, now to the super nerdy details and spreadsheets that my husband loves to make!

The following shows our yearly production for the last two years, the cost of electricity per the utility company, and the solar panel savings each month.

Two Year Breakdown

As you can see our savings each month varies and that’s for a variety of reasons. We have the highest savings in the summer months when the sun is high and hits our solar panels for longer hours. Fall and winter are lower saving months because the sun is at a lower angle and our multitude of trees shade out some of the panels causing lower production rates. 

Luckily, we do participate in net metering. It’s where any of our extra electricity produced that we don’t use immediately is sent to the grid. The utility company monitors how much we produce and how much we consume each month. Then only bills or credits our account for the difference. If we were to over produce, then the utility company would pay us at a lower rate for that extra electricity. We could then use that credit for a month when we under produced.

That said, we never over produce. In order to have net metering and a rebate from our utility company, we had to agree to let them limit our system size. Their goal was our system’s maximum yearly production is never more than 95% of our yearly consumption. This way they never have to pay us a credit. But their math doesn’t take into account for shade or predicted increases in electricity consumption. So our 95% is actually more like 52%.

Home Solar Savings Takeaways

So as of two years, we have saved $1,247 with 18% of our solar panel system paid back. Our payback period has adjusted to a total of 10.93 years instead of the original 6.2 due to lower production than estimated.

Although we had hopes for a shorter payback period and higher production rates, we were prepared for the reality of it. We knew from the beginning our roof didn’t have the ideal solar panel system orientation, and that our property had trees that could affect production.

However, it’s still saving us money and there is room to grow as we increased our electrical usage by purchasing an electric car and converted some appliances to electricity only. Also, our system just started running right at the start of the Covid-19 pandemic in 2020. This meant we were working from home and consuming even more electricity than in previous years.

Solar panels are continuing to get cheaper and more efficient. They are only becoming a better and better option for anyone who wants to electrify their house and power it with renewable energy. Compare that to homes using heating oil or natural gas or grids powered by coal or natural gas. These fuel prices fluctuate constantly and kept artificially low by our tax dollars. However, they have been trending upward recently and will only continue to rise.

Just charting the electricity rates from the utility company, electricity costs have pretty much held steady. In fact, lately, the cost has dropped and stayed lower. All the more reason we are slowly converting everything away from gas and towards our renewable solar energy.

Reducing Our Carbon Footprint

Saving money is definitely one of the reasons we made the leap to go solar, even if our property conditions weren’t ideal. But it was not the only factor. Our goal as a family is to live big while striving to leave a little footprint on our environment. Converting to solar energy at home helps reduce carbon emissions. 

A formula by the Environmental Protection Agency (EPA) can calculate how various sustainable practices result in carbon emissions reductions. It’s pretty fun to play with to see how you impact the environment! Additionally, Energysage has a table that converts solar power energy production into greenhouse gas offsets to give you an idea how your home solar is offsetting carbon emissions.

With our home solar system producing around 5,150 kW per year, it results in around 4.2 metric tons of carbon emission reductions each year. A typical gasoline vehicle emits about 4.6 metric tons of carbon dioxide a year, according to the EPA. So we are almost completely offsetting the carbon emissions of one car each year. That is extremely exciting and a great feeling of accomplishment for our family!

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We’ll keep tracking our progress probably forever because we’re nerds like that. It also helps us know the utility company is billing us correctly. Hopefully, this helps you understand the payback period and how much solar panels save you money over time.

Again, we really loved working with GoGreenSolar. They truly helped us with our DIY solar journey and highly recommend working with them!

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So are you ready to Go Solar!? Have you already!? If so, how much do solar panels save, you? We’d love to hear your story in the comments!

Disclaimer: This post includes affiliate links, and I will earn a commission if you purchase through these links. Please note that I’ve linked to these products purely because I recommend them and they are from companies I trust. There is no additional cost to you.