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You’ve heard that solar panels are great for the planet and can save you money, but just how much will you actually save? Are they really as cost-effective as everyone says?

In this guide, we’re giving you the straight facts about what happens to an electric bill with solar panels. We’re deep-diving into all the technical aspects so you can understand exactly how it works. 

We want to make sure you feel like a pro when it comes to solar panels and your electric bill. Learning all about the benefits of solar panels will have you ready to schedule your consultation and installation! Let’s get started.

Do Solar Panels Eliminate Your Electric Bill?

Even with the assurance that you will save money on your electric bill with solar panels in the long run, the upfront installation costs may put you on the fence. Plus, solar panels are a decades-long commitment that you want to make sure are as good as they sound.

Do solar panels really eliminate your electric bill completely? The answer depends on your situation.

Homeowners can save thousands over the lifespan of their solar panel system. On a monthly basis, the savings vary based on a number of factors.

If your solar panels produce enough energy to power your home 24/7, you can completely eliminate your electricity bill. However, here’s why it doesn’t always quite work this way… 

Understanding Solar Panels and Your Electricity Bill

If they don’t produce enough energy, you can still draw electricity from your local grid. How much you need to do that each month will impact the size of your bill. 

Luckily, even if you still have to draw some electricity from your local grid, the utility company will only charge you for what you use, so it’s drastically reduced thanks to your solar panels.

In fact, you may even have months where your solar panels produce more energy than you need, so you will see a credit on your electricity bill. Throughout the year, you can bank your credits together and cash in on them during times when your solar panels aren’t producing as much energy.

Whether or not solar panels completely eliminate your electric bill depends on how much your solar panels produce vs how much energy you consume. Let’s look at why your solar panels may not cover your total energy consumption.

Why Is My Electric Bill So High With Solar Panels?

If your electric bill still seems high after your solar panel installation, it’s because the solar panels are not producing enough energy to keep up with your household consumption. This is an important part of the consultation and assessment process that determines how many panels you need to completely power your home. Not having a large enough solar system is one of the main reasons you may still have a high electricity bill. 

Your System Isn’t Working Properly

Another reason you may have a high electricity bill is that your solar system isn’t working as efficiently as possible. Solar panels are famously low maintenance, which is a major selling point for switching to green energy.

However, it’s possible that your system may need some tweaks or repairs. Have a solar panel technician do a full investigation of your panels to make sure they’re working properly to produce the energy your home needs.

It’s also possible that your solar panels need to be cleaned. Routinely cleaning your panels will keep them functioning at their full capacity and extend their lifespan. 

Your Energy Consumption

You should also be aware of how much energy your household consumes every month. The following large appliances use up the most energy:

  • Washing machine
  • Clothes dryer
  • Dishwasher
  • Air conditioning
  • Heater 

You can reduce how much you use your large appliances by only running them when it’s absolutely necessary. For instance, only run the dishwasher with full loads, and get into the habit of turning off your air conditioning when you aren’t at home. You might consider investing in a smart home thermostat to control that from your phone.

Turning off unused lights and unplugging devices you aren’t using will also keep your household energy consumption down. 

How to Read Your Electric Bill After Solar Panels are Installed

When you install solar panels, your electric bill won’t look the same as it did before you made the switch. Getting used to a new bill takes time and can be confusing. If you read it wrong, it may look like you still have a high electricity bill even though you don’t.

An electric bill with solar panels will have three new sections:

  1. kWh used by the meter
  2. kWh received
  3. Net metering summary

Let’s break these sections down. The kWh used by the meter section displays the amount of electricity you pulled from the grid after you consumed everything your solar system produced.

Essentially, if your solar system didn’t produce enough for your monthly consumption, this shows how much extra you had to use from the power grid.

Next, the kWh received section shows how much electricity your solar system overproduced this month. When your system overproduces, the extra electricity goes back to the grid, and this is when you get a credit on your utility account. 

Finally, the net metering section tracks your total kWh bank. It shows how much kWh rolled over from the previous month and how much was added this month.

This section will show whether you have a credit or owe a balance on your electricity bill this month.

It’s important to remember that even though you will still receive an electricity bill every month when you have solar panels, it may not be asking you to pay anything for your actual electricity usage. However, you will still have a monthly service fee and taxes.

How Much Do Solar Panels Save on Electricity in 2021?

To understand how your electricity bill will change after the solar panel installation, you need to look at how much you currently spend on electricity every year.

Most families in America spend between $1400-2000 a year on electricity. However, the average usage varies by state. In Utah, the average household spends as little as $93 per month on electricity, while the average household in Hawaii spends $283.

The rates for electricity go up every year, so in addition to saving what you were paying before, you are also saving the rate of inflation when you switch to solar panels. The current inflation rate is 2.2%. 

Before you install solar panels, you can calculate how much you will save every month by looking at your past electricity bill. However, keep in mind variations like the size of your solar system, the rate of inflation, and your household energy consumption. A solar panel consultation process will work through these numbers with you, but it’s good to come prepared knowing your current utility usage!

What is an Annual True-Up Statement?

When you have solar panels, you may receive an annual true-up statement from your utility company. It will outline the credits and charges from the previous year.

If you owe a balance on the electricity you pulled from the local grid throughout the year, it will appear on the true-up statement. However, most of the time homeowners do not owe a balance, and the true-up statement simply lists your reduced usage throughout the year (it’s pretty exciting!).

If you have any leftover electricity credits that rolled over from past months, they will expire at the end of the year. 

Understanding the Cost of Solar Panels

As you can see, there are huge saving opportunities with solar panels. If your solar system is large enough to cover 100% of your household energy consumption, it is rare to owe a balance on your monthly electricity bill.

However, even if you do owe a balance, you are still saving a ton of money. For example, if you start with a smaller solar system that covers 75% of your household energy consumption, you will only have to pay for the remaining 25% that you pull from the grid.

The Cost of Solar Panel Installation

The majority of the money you will spend on solar panels is for the installation process. Depending on the size of your system, installing solar panels costs between $20,000-$35,000+.

Thanks to the savings on your electricity bill, most families pay off their installation cost in under a decade. Since solar panels can last three or four decades when they are properly maintained, that leaves years of potential savings in your pocket.

Final Thoughts on Your Electric Bill With Solar Panels

Let’s review the reasons why you may still have a balance on your electricity bill with solar panels. You either don’t have a large enough solar system, your system needs repairs, or you are misreading your bill. 

At Primitive Power, we have processes to help you understand everything about solar panels from bills and installation to repairs and maintenance to avoid these common issues. Our energy consultants will determine exactly how many panels you need to offset your energy consumption and our free design proposal gives you a clear picture of how your home will look and operate with a solar system! We’ve anticipated potential issues and combed through the fine details to help you every step of the way.

The Primitive Power apps helps ensure your panels are working efficiently around the clock. We guarantee they work properly, and we can help you understand your new electric bill and make it work in your favor. Contact us to get started with solar panels today!