Trying to calculate the savings you get from solar mainly depends on whether or not you finance or pay in cash for the system.
If we want to really get into details then some other factors include things such as your utility company’s cost per kWh, shading, net-metering program, battery requirements, azimuth, and a whole bunch of other nonsense words to the average person.
But that’s exactly what we’re going to focus on here today, the common systems and utility costs for the average person which can be explained as follows:
12 month’s average utility bill is $250 in the US
Average system size 10 kW
The current 2022 Federal Tax Credit (FTC) for going solar is 26%
The average system Price is $42,600 before FTC (Financed)
$31,524 after receiving $11,076 FTC
Average solar monthly payments were $200 before FTC
Average solar monthly payments are $150 if you re-invest your FTC
The average system Price is $29,820 before FTC (Cash)
$22,066 after receiving $7,753 FTC
Over the last 50 years, there’s been an increase of 6% in electricity costs year-over-year. As expected, covid-19 has completely changed things with 15% to 50% increases depending on where you live which are driving average bills from $200 to $250 in just 2 years. Solar on the other hand fixes your payments till the system is paid off (financing) or eliminates it right off the bat (cash)!
Let’s use pre-covid rate increases and say your $250 monthly payments will continue to increase 6% each year.
Amount Paid to your utility company in
4 Years: $13,123
8 Years: $29,692
16 Years: $77,017
30 Years: $237,174
32 Years: $272,669
Crazy right?! And feel free to use any exponential calculator to check my math!
Based on the numbers above it should take you about 8 years before you start making money. 6.5 years if you get the FTC of 26%. By year 16 you would have saved about $50,000 and over $200,000 by year 30. Systems last about 40 years so it’s no wonder homes sell for more when they come with solar, you’re saving a boat load!
When you Finance the deal your ROI will always be lower, just like with anything else. However, your ROI starts immediately! A normal solar option should be $0 down, lower than your current utility bill and possibly get you a FTC, making it an incredible investment for anyone who qualifies!
If you enjoyed the information above and would like to be linked with a professional solar consultant for a complimentary evaluation then click the link here.