Looking for ways to save money on your electric bill?
It turns out that residential solar panels can save you thousands.
The average profit (amount of savings minus the cost of installation) that New Mexico homeowners get is more than $1,200 per year.
Notice that we said average. This means that some homeowners that install solar panels can earn more, while others earn less. Over a 20-year period, homeowners report energy bill savings of $10,000 to nearly $30,000.
In this guide, we’ll outline how to determine your savings and discuss ways to maximize the numbers.
How Much Money Can You Potentially Save with Residential Solar Panels?
Albuquerque, New Mexico, tops the list of cities with the most sunshine, boasting more than 300 days per year. Areas with plentiful sunlight can benefit from solar the most since this type of energy is powered by free energy from the sun.
You can get a rough estimation of how much money you’ll save by considering the following for your area:
- Hours of daily sunlight
- The size and angle of your roof (larger roofs can accommodate more panels, allowing you to save more money)
- Your local electricity rate
- The amount of electricity your home uses on a monthly average
Smart homeowners not only take into account current electricity rates, but they also look ahead and think about how utility costs will rise in the future. The national average is an increase of 2.2% annually. Since residential solar panels require little maintenance, the cost savings can really add up over the years.
Calculate your Current Rates and Solar Needs
In 2020, New Mexico’s average price of electricity was $0.1248 per kWh. If you take a look at your electric bill, you’ll be able to see how many kilowatt hours you use per month. That number will help you get an estimate of how much energy you’ll need to generate with your solar panels to offset your electricity generation costs.
The average home in the U.S. uses 900 kWh per month, which works out to about 30 kWh per day. To ensure that your solar panels are providing you with 100% of your energy needs, you would need a solar system to produce approximately that amount.
Generate a Surplus with Net Metering
Understandably, there’s bound to be variation with how much energy your home needs on a seasonal, and even daily, basis.
The good news is that you can build up a surplus of energy credits due to a policy called net metering. So, if your solar system generates energy that you don’t use during a given month, you can get a credit to put toward energy usage during a month where you don’t create enough energy to offset your bill.
This practice also lets you draw energy from the power grid at night without having to pay anything for it.
Other Financial Incentives for Installing Solar Panels for Your Home
In addition to saving money on your electric bill, you can also take advantage of several other financial incentives:
- Federal tax credits: The federal government has granted an investment tax credit (ITC), which allows you to deduct 26% of the cost of solar installation from your taxes.
- New Mexico State tax credits: In New Mexico, there is also a state tax credit of 10% or up to $6,000.
- High property values: Adding residential solar panels increases the value of your home, which is a plus when it comes time to sell. To sweeten the deal, the government has exempted homeowners from paying an increase in property tax due to the effect that solar panels have on the appreciation of your home value.
- No maintenance: Utility companies sometimes pass on the cost of maintenance and repairs to their customers. With solar, there is little to no maintenance required. On the rare occasions when there is an issue, it’s often covered under a service contract or warranty.
Solar’s Environmental Benefits
You can also do your part to save the environment and reduce your carbon footprint by installing residential solar panels.
An easy way to look at your impact is to consider the annual carbon emissions from a passenger vehicle. A typical car produces 4.7 metric tons of carbon dioxide annually. This can be more than offset by a 6kW residential solar panel system.
Ready to Learn More?
Affordable Solar has been in the business of helping homeowners switch to solar for more than 20 years. Our team will help you take care of everything, from financing to installation, and we do it all in record time! Contact us for an estimate today and learn how you can start saving money with $0 out-of-pocket.