How Much Can I Save with Solar Panels?
Net Metering: Sell Your Power Back to the Grid
One way you save with solar power is referred to as “net metering” or NEM. Net metering is a billing setup that allows solar energy system owners to be credited at the same cost that the utility is changing them. And to send excess electricity generated by their systems onto their utility’s grid and get credited or paid for doing it. Although NEM allows the solar producer to be credited at the same rate they are charged, any excess energy produced – over what is consumed- is only bought at wholesale rates- typically 2-3c/kWh). The energy utility’s home meter will actually run backward (arrow points to the left) whenever the solar system is producing enough electricity to send back onto the grid.
Once you become a solar producer in California, you switch to annual billing. You will get a monthly statement showing your net production or consumption and on the anniversary of going solar, you will ‘True-up’, meaning either you owe the utility, or if your solar system has been sized correctly, the utility company pays you. And, assuming that you produce more energy than you use, the utility credits the net excess generated (NEG) electricity on his or her next bill. There is a 1MW system capacity limit and 5 percent aggregate capacity limit. The customer owns the Renewable Energy Certificates (RECs), but if the customer receives NEG payment at end of year, then the utility owns the RECs associated with the NEG. – Sound confusing? Give us a call and we will go over exactly how it works and how it relates to your home.
Other ways you save with solar panels include:
Tax Incentives and Rebates: There are often packages of federal and state tax incentives associated with new solar installations which include credits and/or rebates designed to encourage solar energy usage. See if you qualify for a rebate here.
Protection Against Rising Utility Rates: When it comes to electricity costs, solar energy offers a competitive and more price-predictable alternative to public utilities. Historically, electricity prices have risen substantially over the last decade for those getting their power from a public utility. Not so, however, for consumers with solar systems on their homes because their fixed costs are predictable.
Increased Home Value: If you own your panels (does not apply to leased panels): Solar panels increase the value of a home. A 2019 report from Zillow concluded that homes with solar panels will sell for 4.1 percent more than homes without.