Path-Q Solar
How much money could solar save if my electricity rate changes over time?
Answer
Solar savings depend on the electricity prices you would otherwise pay, how those prices change, how much energy the system produces, and how much generation is used directly or credited when exported. Estimate savings under several price scenarios rather than relying on one forecast.
Key points
- A basic estimate compares annual avoided utility costs with and without solar for each future year.
- Higher future rates generally increase the value of solar, while flat or falling rates reduce projected savings.
- Separate energy charges, fixed charges, demand charges, export credits, and time-based rates because they may not all be offset by solar.
What it depends on
- Current tariff structure and historical rate changes
- Future price scenarios and escalation assumptions
- System production, degradation, and self-consumption
- Export compensation, fixed charges, and any battery operation
Risks and trade-offs
- Long-term rate forecasts are uncertain and can materially change payback.
- Assuming every utility bill component rises with the energy rate can overstate savings.
- A system sized for high future rates may be less attractive if prices remain flat or decline.
Information you may need
- At least twelve months of bills and the applicable tariff
- System production estimate and expected consumption by time period
- Several electricity-price scenarios and the proposed system cost
Your next step
What to do next
Build a year-by-year savings model using low, base, and high electricity-price scenarios and compare the results with total ownership cost.
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