How Solar Energy Saves You Money
Electricity bills are a mess. Unless you’re an engineer, you probably don’t understand how they are formed, what they include, and why the amounts listed are so different from month to month. It’s almost as if the electricity providers want to keep you in the dark.
Solar is different. We are able to explain—in basic terms—how the system works, how it helps you save money, and how you can get it installed. Let’s start with the most obvious question.
How Solar Systems Produce Electricity
Solar panels are made of silicon photovoltaic cells, electrical devices that convert light energy directly into electricity by the photovoltaic effect. When exposed to the sunlight, these cells absorb and convert solar energy into direct current electricity, which is then turned by the solar inverter into alternating current electricity and used to power your home.
So far so good. But our headline didn’t invite you to read about photovoltaics. So let’s get to the point: how does solar help you save money on electricity?
Renewable Energy Incentives
To help decrease carbon emissions and protect the environment, the state and federal authorities subsidize the adoption of renewable energy sources. Different types of incentives are available to homeowners who purchase solar panels. Additionally, some states offer solar rebate programs: they refund the percentage of your solar project costs.
Many local authorities offer incentives, too. Connecticut Green Bank, for example, covers a fraction of the PosiGen Solar Program for homeowners.
But even without any subsidies, solar panels will still save you money. And it’s all thanks to net metering.
How Net Metering Works
Every home that has electricity also has a kilowatt meter. This is a device that measures, in kilowatts, how much electricity is consumed. Every month, the number of kilowatt-hours used—as measured by the meter—is multiplied by the price of electricity per kilowatt to calculate your energy bill. Your provider may include additional charges, such as delivery or restoration fees. With this in mind, the formula for your energy bill looks like this: number of kilowatts used x price per kilowatt + additional charges = your electricity bill.
For homes that don’t produce any electricity on their own, this operation is one-directional. They have a simple meter that only needs to measure how much energy is delivered to the home by the provider. This is called gross metering.
Homes with solar, on the other hand, don’t just consume the electricity from the grid, they also produce electricity. They need to be able to calculate the net amount of electricity consumed: the total number of kilowatts used, minus the kilowatts the home has produced by solar. This way, the homeowner will be credited for the amount of electricity they produce independently. This is where net metering steps in.
The amount of electricity produced by the panels will vary from month to month. In most cases, solar will satisfy the energy demand of the home partially. The rest of the electricity will be delivered from the grid. Thanks to net metering, the utility bill will be decreased for the value of electricity the home has produced on its own. If the panels were able to satisfy 30% of the home’s energy demand, your bill will be 30% lower.
Sometimes, the panels will produce more energy than the home will need. In that case, the excess amount of energy will be delivered to the grid, and the homeowner will be awarded an equivalent amount of free electricity that can be used in the future.
This way, homeowners with solar can ensure a stable energy supply. If they produce excess amounts of energy during the sunny days, they will be able to pull it back from the grid during the long periods of gloom.
Thanks to net metering, solar has got you covered come rain or shine.
What Does Your Utility Bill Look Like With Solar?
If you decide to purchase your solar panels upfront, you will keep receiving a single utility bill from your energy provider.
If, however, you follow more than 15,000 U.S. homeowners who have already signed up for the PosiGen solar lease, you will be receiving two separate bills:
- the regular utility bill decreased for the amount of solar you produce, and
- your monthly PosiGen bill with a fixed, non-escalating lease price
While you will receive two bills, the total amount you will be paying for electricity will be lower and you will receive a written guarantee of how much money you will save with our program for the first year. Here’s an example.
PosiGen’s engineers run a mathematical analysis for every home before we offer the solar program. We will only make the sale if we are certain you will be able to save money. For example, if you enter a monthly $60 lease for your solar panels, we guarantee that you will save more than $60 on your electricity on average every month, allowing you to easily cover the cost of the lease.
And while the electricity providers increase the cost of electricity as the years go by, our lease program allows you to lock-in your discounted rate for solar panels for 20 years. Imagine if you could ensure the same price for car fuel 20 years from now. Fixed-rate, no surprises.
Free Energy Efficiency Improvements
Installation, maintenance, and optimization are all included in the monthly cost of the lease. And because it’s in our best interest that you save more money, we will also provide free energy efficiency improvement. With simple services such as sealing air leaks, we could save you between 5% and 30% of the monthly cost of electricity. On top of that, if your state or utility services offer efficiency services, we can provide those too. That means you’ll receive state, utility, and PosiGen efficiency services all in one simple visit. Not too bad for a free service, are we right?
Want to Learn More?
We hope this post helped you get a better understanding of how solar helps homeowners save money.
No two homes are alike. Would solar work for yours? How much money would you be able to save? How long would it take to install?
Reach out to us and we will schedule a demo with our expert. You will get a detailed overview of how solar could work for you, and even if you decide not to move forward with us, you will have a better idea of the ways to make your home more energy-efficient. We will be happy to help.