You must have heard the average monthly electric bill with solar panels is very low, but how much can it save you? And how does the whole thing work? In this guide, we shed light on the facts and factors of electricity bills with solar panels to make you feel pro about this thing.

You’ll receive a minimum electric bill unless your home is disconnected from the grid. But going off-grid doesn’t sound like a convenient option. Being connected to the grid, you’ll be charged for the drawn electricity from the grid and other service charges.

So, let’s get started to get an insight into how electric bills work with solar panels and the average monthly electric bill with solar panels.

Different Solar Electricity Plans And Expected Electric Bills

Solar panels and Air Conditioners

What we mean by solar electricity plans is, through which system or infrastructure you consume the solar energy. There are two major types of solar electricity plans which are defined below. And, according to the solar energy plan, the electricity bill will vary.

Grid-Tied Solar System

In the grid-tied system, you don’t stand alone on your solar panel. In contrast, your home remains connected to the grid. When your solar panel doesn’t produce enough energy, you can draw electricity from the local grid. In this case, your electricity bill depends on how much electricity you draw from the grid.

On the other hand, extra electricity produced more than your need is added to the grid. And, you’ll be credited for the amount of electricity added to the grid from your solar panel. This is called net metering.

There you’ll find three different plans in grid-tied systems. Which are:

  • Buy, lease, or PPA: You can either buy or lease the solar system from different solar solution companies. As the initial cost for solar systems is high enough, people also go for plans like PPA or Public Purchase Agreement.

In a PPA plan, you’ll let a company install a  system in your home, and you don’t have to take any responsibility for the system. In this case, you only pay for using the electricity produced by the solar system. As you will still be connected to the local grid in PPA, you’ll also receive a minimum electricity bill.

  • Time-of-use Plan: In this method, you’ll be charged based on when you use the energy. During the peak time of the day or season, you’ll be charged higher here. This TOU rate may vary in different states and regions.
  • Store-based Plan: In this system, the extra electricity is stored in the battery. And, you can use the stored electricity in the peak hours to avoid high billing.

Off-Grid Solar System

In off-grid solar systems, you’ll not be connected to the local grid. In this case, your electricity bill with solar panels will be zero. But, this is not a practical and convenient electricity solution for households. Because solar panels don’t produce the same amount of electricity throughout the seasons or a 24-hour day.

Average Monthly Electric Bill With Solar Panels: Facts & Factors

man checking document

According to the Energy Information Administration (EIA), an average U.S. household consumes about  897 kWh of electricity. As of January 2023, the average electricity rate is 16.8 cents per kWh, and typical US households pay about $150 as an electric bill.

On the other hand, the average electric bill with solar panels considerably drops up to 80-90%. But, it’s difficult to mention a certain figure of the average monthly electric bill with solar panels here. Because this average monthly electric bill with solar panels for the home may vary depending on various factors.

Factors Affect Average Monthly Electric Bill With Solar Panels

The three main factors that affect electric bills with solar panels are discussed in the following.

Solar Panel’s Configuration & Efficiency

As you know, there are different types of solar panels with different configurations. The configuration of your solar installation determines how much energy it’ll produce. The aspects of a solar panel that determines the production and electric bill are:

  • Type: There are three different types of solar panels for homes with different levels of efficiency. If your type of solar panels for your home produces enough electricity for you, the electric bill will be the minimum.
  • Wattage: This means how much energy the panel will produce per hour.  For instance, the 5 kWh solar panels for homes will produce 30 kW of electricity in six hours of sunshine. If your household’s daily need is 30 kW, then there will be no extra electric bill without the service charges.
  • Battery Storage: If your solar installation includes battery storage, you can use the stored electricity at night or when the panel is not producing energy.

Local Electric Bills, Utility Bills, And Net Metering

From state to state, your electric bill with solar panels will also vary depending on how much energy you draw from the grid. Moreover, you’ll need to pay a minimum amount of utility bills as service and maintenance charges. This utility applies whenever your household connects with the grid.

Another point is, if your solar system produces more energy than you need, this electricity will be added to the grid. You’ll get credited for this added amount of energy. This is referred to as net metering. Your utility service provider’s net metering policy also affects the average monthly electric bill with solar panels.

Your Household’s Energy Consumption

If your solar panel can’t produce enough electricity in proportion to your household’s needs, your home needs to draw energy from the grid. When the energy drawn from the grid is high, the electric bill will also be high. On the other hand, if your solar installation produces enough electricity for your household, you’ll just need to pay the minimum electricity bill.

Quick Recap

Solar savings

Let’s have a quick recap on the fact of the average electric bill with solar panels through a few questions and their answers.

How Do Solar Panels Affect Electric Bills?

In a grid-tied solar infrastructure, you need to pay a certain electric bill according to how much electricity you draw from the grid. And, how much electricity your home draws from the grid depends on the deficit of your solar production. So, if your solar infrastructure produces more energy then your electricity bill will be low, and vice versa.

How Much Do You Save On Electricity With Solar Panels?

How much you can save depends on the configuration of your solar panel and other factors. But on average you can save up to $150 on electricity with solar panels. Solar panels cost you eight times lesser on electricity than without solar panels.

Does Solar Really Save Money?

person calculating money

Yes, solar panels save money for real. It can save you 80-90% of your electricity bill.

Can A House Run On Solar Power Alone?

The amount of electricity produced by solar panels varies throughout the year. So, it’s good to be connected to the grid along with solar panels for unaddicted electricity.

Do Solar Panels Work At Night?

No, solar panels don’t work at night. For this reason, households remain connected to the grid and install batteries to store energy.

How Do Solar Panels Work With Your Electric Bill?

In grid-tied solar installations, you pay electric bills for consuming electricity from the grid when needed. And, when your solar panel produces extra electricity than you need, the electricity is added to the grid. In the end, the electric bill is calculated by balancing the electricity your solar infrastructure uses and adding it to the grid.

Final Thought

Solar panels can save a considerable amount of money each month. Though the initial cost of having solar panels is high, it’s a completely sustainable and economical solution. Hopefully, this article gave you a clear idea about the average monthly electric bill with solar panels and its affecting factors.

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