Do Solar Panels Save Money?

If you heard people claim of how solar panels save money, but balked because of the initial cost and questioned the truth of the statement, you are not alone. However, the answer to do solar panels save money is a firm 'Yes'. Read on to know how.
HelpSaveNature Staff
Last Updated: Jun 22, 2018
Most people consider installing solar panels in their homes as they are concerned about the environment and the impact on their energy requirements. However, people are also beginning to realize the energy efficiency they provide, specifically in terms of cost saving.
The hefty initial investment required for installing the solar panels can often be a deterrent for many. However, everyone needs to understand that though the initial cost may seem heavy and the savings may seem minimal; the cost benefits will gradually reflect in the bank balance in a long term. Here is an explanation about how do solar panels save money.
Source of Energy
Solar Panels On Roof
Residential solar panels absorb sunlight and convert it into energy suitable for use in the home. In most homes, the panels are placed on the roof and connected to the heating system. Energy from solar cells is usually used to heat water and produce electricity.
Usually, solar energy is not the sole source of energy, but is used to supplement the preexisting sources of energy. The panels that are made to heat water are also known as thermal solar systems and electricity-producing panels are often called photovoltaic systems.
Function
The methods used by the panels to convert solar energy differ depending on what they are used for. Solar water heating systems usually have a "collector", which absorbs solar radiation, and turn it into heat. Once this takes place, a heat-conducting liquid transports the heat from the collector to the hot water tank.
In solar panels that produce electricity, a positively charged layer of silicon is kept next to a negatively charged layer of silicon. This creates a field for electrical charges to pass through. It is created when sunlight shines on the panel. A conductive metal concentrates the charge into an electric current, that is used to power household appliances.
Advantages
The sun is a potent source of energy. It is said that in one minute, the Sun gives the Earth enough energy to meet the Earth's power needs for a year. This seems to be the best solution to this unfortunate reality. Accounting for only 5 percent of the world's population, Americans consume 26 percent of the world's energy.
Solar Energy
Solar energy is clean, does not impact the environment negatively, and best of all, is free for the consumption. By installing a solar panel in your home, you are utilizing this enormous source of free energy, and also slashing your bills significantly, not to mention saving the planet!
How Solar Panels Save Money?
Solar panels will save money in the long run, but the immediate benefit may not seem much. Its efficiency, in terms of money saving will depend on a few factors, including the amount of sunshine your home receives. Saving also depends on how much electricity you use.
Solar Panel
According to the US Department of Energy, an average American household used approximately 866-kilowatt hours per month in 1999 costing them $70.68. On an average, about 30% of total energy consumption is of heating water which gets slashed of if you have a thermal solar system.
Another factor to feature in is the capacity and cost of the panels you install. For example, a new solar panel producing 120 watts costs around $300. One could go in for used panels, though they may be about 90 per cent as efficient as new ones.
The amount of money saved will be impacted by the price of other forms of energy you use. However, a thumb rule that is often referred to is that your solar panel pays for itself in about five years.
Another factor to feature in is if your state offers a grant for the installation of solar panels. For example, Wyoming offers a 50% residential rebate, up to a maximum of $3000.