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How Much Money Will You Save With Solar Panels?
- May 8, 2024
Solar panels are popping up all over the place in Colorado. Your neighbors won’t stop talking about how much money they’re saving on their electric bills, but you’re not sure you believe it. It all sounds a little too good to be true.
You’re not alone in your thinking. We get calls from homeowners asking how much money solar panels really save almost every day.
But residential solar panels do save you money. In the right circumstances, they can cover 100% of your electricity usage.
Keep reading for a complete breakdown of average solar savings in Colorado.
Average Electric Bill & Solar Savings in Colorado
To calculate how much money solar panels will save on your electric bills, you first need to know how much money you spend on electricity.
According to the US Energy Information Agency, the average residential electricity rate in Colorado is 14.47 cents per kWh. The average Xcel Energy customer in Colorado uses approximately 600 kWh of electricity every month, which means Colorado households are spending $86.82 a month on electricity, on average. It’s important to remember, however, that this number is just an average. Some households use a lot more electricity, especially those with heat pumps, EV chargers, hot tubs, and swimming pools.
Now let’s look at solar panel savings.
Given an adequate amount of sunshine (about 4-5 hours a day) one kW of solar capacity will produce around 1,400 kWh of electricity per year. A 6 kW solar panel system will therefore produce around 8,400 kWh per year—700 kWh per month. That’s more than enough to cover the average Xcel Energy customer’s usage of 600 kWh per month.
What Impacts Solar Panel Savings?
Looking at averages can give you a good idea of how much money solar panels save per year, but solar energy savings can vary widely even for houses in the same neighborhood.
Your actual savings will depend on several factors, including:
- Location – The more sunlight you have access to, the more electricity you can produce with solar panels. Houses with unshaded, south-facing roofs are ideal for solar panels.
- Electricity Usage – Households that use a lot of electricity stand to save the most money with solar panels. But even households with lower usage will see long-term savings from solar panels as they shield you from rising electricity rates and keep your costs consistent.
- System Size – Your system’s size impacts your savings. We install custom solar power systems that are sized to cover 100% of your home’s electricity usage.
- Electricity Rates – Solar panels lower electric bills the most for households with expensive bills. In Colorado, electricity rates are middle-of-the-road, but time-of-use (TOU) rates can drastically increase your costs during on-peak hours. Solar panels can help you avoid a spike in your bills due to TOU rates.
- Panel Quality – Higher quality solar panels are more powerful than lower quality counterparts and can produce more electricity given the same amount of sunlight.
- Incentives – You can save more with solar panels in a state like Colorado that offers net metering. Net metering is a billing arrangement that allows you to sell the excess electricity your solar panels generate to your utility company in exchange for credits to your account. You can accumulate credits during the summer when solar output is higher and use them to offset your higher grid usage in the winter.
Maximize Your Solar Savings & Return on Investment
A solar battery storage system, like the Tesla Powerwall, can be added to any solar panel system to maximize its benefits. With a battery, you can store the excess electricity your solar panels generate during the day and use it to power your home at night or when it’s cloudy. You’ll be able to use more of the solar energy you produce and buy less electricity from the grid, further reducing your electricity bills. You can also use your battery to avoid on-peak rates by strategically deploying stored solar energy during peak demand times.
Maximize Your Savings with Solar Power Pros
Solar Power Pros is the leading solar panel installer in Denver, Colorado, and across the Front Range. We are a highly experienced, local Colorado solar installer that’s committed to putting homeowners in control of their electric bills. We can help you maximize the financial benefits of solar energy with a custom solar panel and battery systems tailored to your specific needs. We offer free virtual consultations and no-pressure estimates so you can take the first step toward going solar with zero risk.
