Most homes and businesses can eliminate the monthly electric bill with a solar power system. The utility cost savings can be calculated by multiplying the kWh production of the system times the billing rate per kWh charged by the utility.
For example, a system that generates 1,000 kWh of electricity per month X a utility billing rate of $0.15 per kWh = $150 in monthly savings. Whether for a home or business, this translates into real monthly cash-flow savings.
The monthly savings can be multiplied by 12 for annual total savings; in this example $150 x 12 = $1,800 yearly savings.
Because solar panels have a 25 to 30-year warranty period, and a longer useful life, the annual savings can be multiplied by 25 or 30 for lifetime savings. In this example, $1,800 x 25 = $45,000, or x 30 = $54,000.
It is important to note here that this is not a precise estimate of savings because it does not take into account solar panel degradation or utility inflation over time. Solar panels will typically degrade less than 0.87% per year for 25 years, so that by year 25 the panels still operate at 80% of the original rating.
Next, we can count on utility rate going up over time. Government studies show that utility rates increase an average of 4% per year during a 25-year timeframe. Therefore, in the savings example used above, the lifetime savings could be greater than the simple calculation.
You'll enjoy a $0 or very low power bill for the 25 or 30 year life of the solar panel system. For example, if you spend $200 per month for electricity with a utility, then you will spend $81,979 over 25 years, including a low annual price inflation rate of 2.5%.
No matter how you calculate it, you will save money with a low-cost solar panel system. Remember, you can pay the utility for 25 years, with annual price increases, or you can pay a lot less for solar power.
You'll also get some great tax credits and solar rebates
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