Does Solar Really Save You Money? A Financial Review Of A Year With Solar!

Late September will be an important milestone at my home.  It’s hard to believe, but a year will have passed since my family took the leap and purchased a photovoltaic solar system for our home.

During our last trip around the sun, the kids had birthdays, the seasons went full circle, and our lives somehow got filled with even more tasks to keep us busy.  I’m sure you can relate.

Oh, and we got another dog.  His name is Mo.  He’s awesome…

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What were our solar panels doing while my kids were growing and Mo was digging holes in the back yard? (Bad boy Mo!)

Oh, just sitting up there on our roof.

Fact is, most days I forgot they were there.  But regardless of whether they were on my mind or not, my panels were doing their job– collecting sunlight and turning it into clean energy.

Thanks to the quality installation by Synergy Power, I had absolutely no maintenance issues whatsoever. Aside from crawling up on my roof to clean the dust off a couple times, my panels were completely hassle free.

But what about energy savings?

Did my solar system live up to the green energy hype?

Let’s find out…

I don’t think there’s any better way to relay my actual energy savings than showing you my actual energy bill.

So here it is…

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As you can see, there are two years of billing data in the chart above. You’ll also notice in recent months our monthly bill dropped to the minimum $8.97 currently required by Rocky Mountain Power to be hooked up to the grid.

I really like the fact we paid a mere $8.97 during July and August, the hottest months of the year here in Salt Lake City.  Rest assured, our AC unit was blasting cold air just like everyone else’s.

Compare this year to 2016 and 2015 and you’ll see how much our solar panels saved us- just by hanging out on our roof.

Here’s another interesting chart…

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The usage chart above shows the net energy usage of our home over the past year.  It factors in the energy my panels produce and balances it with the electricity we pull from the grid.  Starting in March 2017 you will see our net energy usage dropped to zero.

As you can see, December, January, and February we still had some net energy usage (and a bill to go with it) due to the fact the panels were newly installed and hadn’t had the chance to build up enough credits to get us through the winter when solar production is lower.  Our net usage in the coming December, January, February time period will likely be zero because we had a full summer of production to maximize our credits.  (For more information on how these credits work, here’s a link to Rocky Mountain Power’s net metering program).

So what did we have to pay for the privilege of savings hundreds of dollars over the past year?

My initial system cost was $16,786 for a system that produces 4.86 kWp.

Let’s look at the details…

I financed my system through one of Synergy Power’s finance partners- GreenSky.  As a result, I made no payments and had zero interest during the first year.  Having this financial flexibility during the first year of system ownership is a great opportunity.  It allowed us time to save and plan for how we would eventually pay off the system after the first year is up.

The buyer has two choices at the end of the first year.  Pay off the system in full on the one year anniversary to avoid all interest.  Or start making monthly payments, which will include interest from the first year.

We elected to just write a check to Greensky Credit and pay the system off.

Painful?

Not really.

Keep in mind, we will be getting a 30% Federal tax refund along with a $2,000 Utah state tax credit when our taxes are complete in October (I file an extension for business purposes).

Taking the tax credits into consideration, our family will have spent $9,751 to collect energy from the sun for 25 years of guaranteed system life.  That’s right, Synergy Power is one of the few solar companies in Utah that guarantees their solar installations for 25 years.

So how long will it take to see that $9,751 recovered?

From September 2015 through August 2016 (the last full year of non-solar at my home) we paid $832 in electricity costs.  Going forward we’ll pay $107 a year ($8.97 x 12) to Rocky Mountain Power.  That’s a savings of $725 per year.

If Utah energy rates stay exactly where they are, it will take us just over 13 years to recover the net cost of our solar system.  After that, our home will generate free energy from the sun for the remaining 12 years of our system’s guaranteed lifespan.

That will keep $9,425 in our bank account from year 13 to year 25.

But wait a minute…

The figures above assume Utah energy rates will stay exactly where they are now over the next 24 years.

Will Utah energy rates really stay the same in coming decades?

As we all know, Utah’s population is expected to grow dramatically. Surging population means more electricity demand, which means Rocky Mountain Power (Pacificorp) will have to invest heavily to meet that demand with more production.

Of course, traditional Utah energy consumers will have to pay for that investment through higher rates.

In my opinion (and most others), the chance of energy rates staying exactly where they are (accounting for inflation) for the next 25 years is nil.

Each increase in Utah electricity rates makes our system cost recovery time lower, and the total 25 year energy savings higher.  Keep in mind, once you have solar on your roof, the rate you pay is stable.  The sun doesn’t charge extra for more demand from your neighbors!

Here’s another important factor…

Solar system costs are still dropping as they have been for many years.  My neighbor could likely purchase my exact system for around 5-10% less than I paid a year ago.  That means system recovery times and overall system savings grow more attractive as time goes on.

So was it worth it to plop solar panels on my roof a year ago?

Absolutely.

If you plan on being in your home for the long run (as we do), there’s really no reason not to go solar.  The long term energy savings are undeniable.  What’s more, you’ll be doing your part in making the world a cleaner and safer place to live for future generations.

So tell me again, why haven’t you gone solar yet?

To a clean energy future,

Justin

***Note*** As you may have heard, Utah is changing it’s net metering rate structure starting November 15th, 2017.  After that date, solar producers will receive slightly less for the power they produce.  If you want to be grandfathered in at the current rate structure (which is what makes the math above work so favorably) you need to act now!

 

 

 

 

 

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