How Do Solar Panels Save Energy?

Solar is the fastest-growing energy industry in the US with residential solar panel installations on track to double by 2023—and that’s not surprising. What’s not to love? In addition to being good for the environment, residential solar panel systems can also save energy, which in turn saves you money.

However, while the benefits of using solar energy are as popular as they are diverse, not many people actually understand how it works. For instance, do solar panels save energy? Can they save you money? Here’s what you need to know. 

How It Works 

The law of thermodynamics states that energy is neither created nor destroyed, but only transformed from one form to another. In this case, solar energy is converted into electrical or heat energy that we use to power devices. This conversion can happen in two primary ways:

  • Photovoltaic Conversion – This method captures sunlight and converts it directly into electricity using photovoltaic cells. It is the most common method to generate solar energy. The solar panels are usually integrated strategically on areas with maximum exposure to sunlight, such as rooftops and open fields.
  • Solar Thermal Conversion – This method is indirect. It involves transforming sunlight into thermal energy to generate heat for your home.

In both cases, converting solar energy into electrical or heat energy reduces dependence on the local grid. That’s how solar panels save energy, in a sense. Energy is still used. It’s just from a clean, renewable source that doesn’t rely on the grid.

Additionally, you can use a solar battery to store any excess energy, that is, if you’re not planning to make some extra money on the side by selling it back to the grid. Both options allow you to power your appliances and devices, even when the sun is down. 

How does using solar energy help you save money? 

Local solar companies and brand manufacturers of residential solar panel systems often advertise their products as being able to save consumers money, but most don’t go into detail how that’s possible. We’re happy to explain it:

Installing solar panels while remaining connected to the grid means your property becomes both a power plant and contributor. On a clear day, the system supplies clean solar energy, so there’s no need to rely on the grid.

Then, you can sell any excess energy, which earns you a credit on your utilities. You can use that credit to cover your nighttime use, and if you don’t use it all, you may even get paid.

You may also enjoy a tax credit to offset the cost of installing solar power on your property. Solar tax credits vary by state and region. Here in New Mexico, the tax credit can go as high as 10% of the total installation costs, but not higher than $6,000 in a fiscal year. 

Even better, any excess credit amount can be carried over for the next five years and applied against your state income taxes. 

Is solar right for you? 

Given the many benefits of switching to solar, the general answer is yes. Of course, there’s a number of factors to consider, but overall, you stand to gain more from installing solar panels than relying solely on the grid. 

Want to learn more? 

Our team has been installing quality commercial and residential solar systems across New Mexico for over 20 years. As one of the top local solar companies, we can address your solar power needs and help you get the most from your system. Call us today at (505) 944-4220 to learn more. 

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