Will Solar Save You Money? Sense Data Reveals that Potential Savings Depend on Where and How You Live
CAMBRIDGE, Mass., Nov. 5, 2019 /PRNewswire/ -- With 2019 winding down, and along with it the 30% federal tax credit stepping down to 26%, now is a good time to consider whether solar will help you save money on your utility bills. Home energy innovator Sense analyzed solar home data from 1800 homes across the US, in states with high solar adoption, and found their average savings is $1075 annually. Those savings are high enough to offset 67% of these homes' electric bill.
The study revealed that because of the mismatch between timing of energy usage and solar production, more than half of the electricity generated by solar panels goes back to the utility grid, on average, and less than half is used to directly power the home's day-to-day needs. This surprising insight points to the need for homeowners to know how much their utility will pay them for power returning to the grid to get the most from their investment. Also, solar homeowners should shift more of their energy usage to times of day when solar power production is high.
Key insights from Sense's data:
- Most homeowners use less than half of their solar power directly and need to feed the rest back to the grid or invest in battery storage.
- Sense's research found surprising variations in solar payoff from state to state.
- Since many states allow utilities to buy back solar power at a lower rate than they charge for electricity, where you live can make a big difference in the payoff from your solar investment.
- How people use energy in their home matters, too; homes that use most of their energy during peak solar hours can maximize their solar investment.
- Only a fifth of all solar residents produce more solar energy than they consume, reaching the goal of matching household energy consumption to solar production.
Where You Live Matters
Where do solar panels pay off the most for homeowners? Among states with the most solar homes, residents in sunny Utah and California gained the most from their solar investment. Utah residents offset 84% of their utility bill, while Californians offset nearly 75% of their bill. Arizona residents have a lot to gain, too. They generate solar power equivalent to 66% of their average utility bill.
Surprisingly, residents in Northeastern states are among the bigger gainers with solar: New Hampshire (76%); Vermont (70%); Massachusetts, New York and Pennsylvania (67%); and Connecticut (66%). While these states receive less sunlight, solar panels are more efficient at lower temperatures, giving cooler states an edge in solar production.
By contrast, residents in cloudy Washington only offset 52% of their utility bills with solar.
State regulations that impact the payback on solar energy by utilities are another big factor in calculating your pay-off. Many states pay residents for the solar power they generate at the same rate as what they charge. This approach is called net metering. The rest of the states use a variety of pricing methods that effectively reduce the payback on solar for their customers.
When considering solar, it's important for homeowners to find out how much their utility will pay them for the solar power they don't use that goes back into the grid. In states with net metering, where utilities pay for solar energy at the same rate as they bill for electricity residents don't need to worry about timing their usage. In states that don't require net metering, residents are typically receiving lower payback rates on their solar power from their utilities and should look for ways to shift their electricity use to peak solar production times.
How You Live Matters, Too
Most solar homeowners produce more solar energy in the middle of the day but need to use energy throughout the day and evening. As a result, Sense data showed that more than half (55%) of the electricity generated by solar panels goes back to the utility grid, on average, with less than half (45%) directly used to power the home's day-to-day needs.
The seasons have an impact on energy usage patterns, also. Sense data shows that energy usage peaks in the summer in the late afternoon when air conditioning is running full blast, while in the winter there are two peaks -- in the morning and evening, when people are starting and ending their days at home.
Homeowners can get more from their solar investment by planning high energy activities when their solar production is highest, during sunny times of day. For instance, in households where adults work during the week, schedule laundry and dishwasher loads during peak sun hours over the weekend. In the summer, schedule a pool pump to run during peak solar production hours and turn it off overnight. Charge EVs during daytime hours whenever possible.
Here are some tips for investing in a solar system and getting the most savings once it's installed:
- Do your homework before installing a new system. Assume that you won't use all your solar production and research your utility's payback rate on unused solar power (see map of state policies here), as well as both federal and state incentives. The Solar Energy Industry Association's website is a good place to start..
- Pay attention to deadlines as tax incentives change. The federal solar tax credit allows you to deduct 30 percent of the cost of installing a solar energy system from your federal taxes through the end of 2019. It decreases to 26% in 2020 and 22% in 2021, ending in 2020.
- Understand your home's energy usage patterns and adjust them to match your solar production. Solar homeowners whose utilities don't offer net metering can reduce their electrical bills by scheduling energy intensive activities during peak solar hours.
- HVAC systems account for nearly half of the average electricity bill in summer months according to the EIA -- depending on where you live. Solar homeowners can run their HVAC systems to cool their home during sunny times of the day, then adjust settings toward evening to reduce electricity usage and take advantage of cooler outdoor temperatures. Smart thermostats can help homeowners schedule cooling to coincide with peak solar production time periods.
- Some appliances can be scheduled more frequently during peak solar hours including your washing machine, dryer, oven, dishwasher, and stove.
- Charging electric vehicles (EVs) consumes a lot of power, so solar homeowners should make it a priority to charge their EVs during the day using their solar power.
About Sense
Sense is the first company to give consumers engaging, real-time analytics on energy consumption in their homes right on their mobile devices. Its mission is to make all homes intelligent through its fitness tracker for the home, helping consumers save money and live safer with more energy-efficient households. Founded in 2013 by pioneers in speech recognition, Sense uses machine learning technology to provide real-time insights on device behavior, even for those devices that are not "smart." Customers rely on Sense for a wide range of uses including monitoring their home appliances, determining whether they left appliances running and identifying major energy drains in their home so they can substantially reduce their energy costs. Sense has received investments from two of the world's largest energy technology companies, Schneider Electric and Landis + Gyr. The company is headquartered in Cambridge, Mass. To make sense of your energy, visit: https://sense.com.
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SOURCE Sense
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