What Is The Average Electric Bill With Solar Panels?

Solar energy is becoming popular for its environmental sustainability and renewability. Many homeowners and industries shift to solar as an alternative to electric grid systems to reduce electricity bills and benefit from government incentives for going green. 

Although the initial cost of installing solar systems is high, the investment will pay off in reduced electricity bills. 

So, what is the average electric bill with solar panels? The average electric bill with solar panels will generally be 90 % lower when owning solar. A standard size solar panel array is generally about 5kW and requires about 400 square feet of space. An array of this size can generate an average of 350 to 850 kWh of AC energy per month. Knowing that the average U.S home uses around 893 kWh of energy per month, according to the U.S. Energy Information Administration. Owning solar panels leads to a 90 % decrease in electricity bills. 

Using a solar system means you put less pressure on the grid and could get off the grid completely if you install more solar panels and improve your energy storage. 

You might also wonder about the Average Cost of Solar Panel Installation. Here is an article I encourage you to read.

What Is The Average Electric Bill With Solar Panels
What Is The Average Electric Bill With Solar Panels? – solarixis.com

How Much Will You Pay For Electricity Bills After Installing a Solar System?

Solar panels and systems help save money with an excellent return on investment, including rising property values and lowered utility costs. The federal tax credit eases the upfront costs of installing solar panels.

The average U.S home can save between $10,000 and $30,000 over the lifetime of its solar panel system. And also study shows that installing solar panels can raise property value to up 4.1%. 

A few things determine how much electricity bill you are likely to pay. When you install a home solar system, you intend to get off the grid and switch to solar during the day when the sun is hotter.

Your electricity bill depends on the amount of energy your solar panels produce, your household power consumption, and the local electric rate. 

If your household consumes less energy, you may use more solar energy and limit dependence on the grid system, thus reducing your electricity bills. 

Additionally, if you have several big solar panels and storage batteries, you will produce enough solar energy to cater to your household’s needs for a long period. This will limit the electricity bills you pay at the end of the month.

If you optimize your energy consumption and produce more energy from a correctly installed solar system, you can build a financial equation that stabilizes your energy needs and electric bill. 

When using solar energy, you save thousands of dollars that could have been spent on the electricity bill. Your savings are even higher if you live in areas with high electric rates. 

As energy prices continue to soar with inflation and weather patterns become more extreme, home solar system installation will enhance your financial security. Most solar systems have a 25+ year lifespan, which means you will continue to save over a long period. 

Furthermore, no one controls your energy; it is your installation, your solar system. Solar energy can serve you even if the sun is down or weather conditions become unfavorable if you have a storage capacity. 

How Much Can Solar Panels Save On My Electricity Bills?

The cost of solar panels depends on their sizes since they are priced per watt. This means that the larger the system, the costlier. As of 2022, the average solar panel price per watt in the United States was approximately $2.94. 

Most home solar systems are rated 5-10 kWp, which means during peak hours, they can generate between 5 and 10-kilowatt peak. The installation costs range from $15,000 to $30,000; however, you may pay less because of government tax credits and rebates. 

On the other hand, a U.S. household’s average annual electricity use is 10,715 kilowatt-hours (kWh). Multiply the average electricity consumption by the national average electricity rate as of May 2022 ($0.1492 per kWh), meaning that the typical American family is spending just over $1,598.678 a year or 133.223 per month on electricity.

Even though solar panels require an upfront cost, installing solar panels will save you money on energy bills in the long run.

In addition, how much savings your solar panels will generate depends on their size and the angle at which they are set. If your solar panels are larger and set at an efficient angle, they may result in a larger saving. 

Factors That Determine How Much You Save On Electricity Bills

Besides the size of your solar panels and the angle at which they are set, other factors also determine your electric bill. 

1- Your Home’s Potential

How much sunlight does your home receive yearly? If you live in the Southwest, in places like Nevada where the sun seems to have built a permanent home, your energy production will be high. 

Homes in these areas have a high potential for solar energy harvesting. You can also enhance this solar energy potential by ensuring there are no nearby obstructions that could provide shade to your home and minimize its potential. 

Furthermore, your roof should be south-facing for maximum exposure to sunlight at the right angle. Homes with high solar energy potential will significantly reduce the money you pay for electricity bills. 

2- Solar Panels Prices

The good news is that solar panels’ price has continued to fall in the past few decades as new technology come into play. We hope the prices will continue to drop, thus enhancing homeowners’ savings by installing solar. 

3- Tax Credits

Tax credits and rebates help to reduce the amount one pays for solar panel installations. In the United States, the federal government and some states offer tax incentives where homeowners can claim 26% of their solar system costs (Source: Office of Energy Efficiency And Renewable Energy)

This reimbursement acts like a return on investment, thus reducing the amount spent on solar installation. Reduced investment in solar installation means more savings on electricity bills.

4- Electricity Bill- Before And After Solar System Installations  

Let’s handle a hypothetical situation to help us understand how much a family can save with solar panels. 

Let’s assume Sun and Sun’s family are debating reducing their monthly energy bill. They reside in Nevada and pay an average of $150 monthly electricity bills. 

However, they plan to stay in this location for at least 10 years because of their home’s proximity to the school, shopping center, and parks. They want to install a 7kWp solar system, which perfectly suits their roof size and budget. 

Data from Energy Information Administration (EIA) show that the average household in the United States consumes 11,700 kWh annually. The report also indicates that the average price for residential consumers in 2022 is 14.77 cents /kWh. 

Therefore, a typical household will pay a monthly power bill of approximately $119. But EIA predicts that energy prices will continue to rise to an average of 14¢ per kWh by 2028. 

Since the electricity bill is above the solar’s average consumption and the trend is getting worse, installing solar panels is an excellent idea. Why? Consider the numbers. 

Before Solar

Since the Solars have children and plan to stay in their home for a minimum of ten years, their energy consumption and cost will likely increase. Assuming their consumption is stead, they will likely consume 15,000 kWh annually. While their monthly electricity bills would be $150, they pay 12.5 cents/kWh. 

Assuming that prices increase to 14cents /kWh from 12.5 cents/kWh by 2028, their electricity cost (consuming 150,000 kWh of electricity) for the next 10 years will amount to $19,600. 

After Solar

Sun and sun wanted to install solar power supplying 7 kWp, which means they will produce approximately 7,000 kWh. This is almost half the family’s annual energy needs. 

The cost per watt is 3 cents, and the whole system costs $21,000, which means over the next 10 years, the family will save $9,125. But the solar system will begin paying itself if they stay in their home beyond 16 years. 

Can Solar Energy Eliminate My Electric Bill?

Solar energy depends on weather conditions, which sometimes means solar panels will not meet your household energy needs, especially if you do not have energy storage. 

So, most solar installations can reduce your electricity bills but may not eliminate them. However, if you are on a 1:1 net metering ratio and your solar systems are installed under perfect conditions, you could supply more power to the grid than you use

You could get a negative electricity bill, which means you sell energy. This difference can be paid to you or carried forward to cover your next month’s bill.

Although you will still incur a minimum monthly fee to your account for unused energy, the cost may be negligent. 

Investing in solar panels may take several years before you realize a break-even; therefore, it is not a good cause of action for those who constantly move.

But you can decide to install a solar system in your home to raise its value even if you intend to move after a few years.

How Can You Lower Your Electric Bill Using Solar Panels?

Generally, the level at which solar systems reduce your electricity bill depends on the power you generate and your household usage. 

For example, a recent study by Rocky Mountain Institute indicated that a typical home in New York will pay a monthly electric bill of $350 by 2030. However, the same home will reduce its electricity bills by $260 monthly by installing solar systems and storage batteries.

Based on this many other findings, it is advantageous to go solar. The return from solar energy will dwarf the perceived initial cost within a few months.

While the amount of electricity you generate is mostly determined by natural factors like the strength of the sun’s rays, you can control your usage. Here are some tricks to help you lower your electric bill. 

Reduce Your Household’s Energy Usage

If you use less electricity, you will lower your electricity bill. What are some practical ways to lower your home energy usage?

  • Install a programable thermostat that switches off air conditioning and heating systems when not needed. 
  • Ensure devices and appliances are turned off when they are not in use
  • Use LED light bulbs rather than incandescent ones. 
  • Assess your home energy usage to improve efficiency and reduce cost. 

Supplement Solar Panels With Solar Battery Storage

Are you living in a place experiencing long hours of sunlight? You could be generating more electricity than you use. Tap the excess energy for future use by investing in solar battery storage. The stored electricity can be used during the night or on cloudy days. 

Enroll In Net Metering

You can send excess electricity to the power grid for credit with net metering. You can use this credit to pay for the electricity you draw from the grid when weather conditions are unfavorable. 

See also: What Are The Solar Energy Pros And Cons?

Final Words

Installing solar systems will significantly reduce your electricity bill. If you have solar battery storage, you may even pay less on sunny days. You may see an immediate investment return, but you could break even in the long run.

However, you will still need the power grid during rainy, cloudy, or winter seasons but pay fewer electricity bills. 


Hello friends, I am Altiné. I am SO excited you are here! I am the guy behind Solarixis.com. I am passionate about all things outdoors, running, reading, and self-reliance. I hope you find what you are looking for while visiting Solarixis.com.

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