Do You Really Save Money With Solar Panels?

Do solar panels save you money? In most cases, you do.

It sounds very attractive: never pay anything for the electricity bill again. Instead, have a system that produces free energy forever.

Even if you use them past the recommended time, they keep performing beyond 80% of the original efficiency.

If you know anything about solar energy, prices have never been this low. 

That doesn’t make solar panels the perfect investment necessarily. There are misconceptions about this technology that people keep believing.

Research the pros and cons before investing in panels.

6 Solar Panel Myths You Need To Stop Believing

Solar panels can reduce expenses, but these alone can’t guarantee energy independence. It’s not about installing the panels and never worrying about electricity again.

You will need other units to:

  • Power your house during power outages.
  • Save the energy for when the sun isn’t shining.
  • Keep solar energy efficiency high.

#1st Myth: More panels mean lower energy expenses

At their best performance, solar panels take 7-20 years to return the investment. Most have a 25-year guarantee, so everything else there is profit.

The problem is, you can’t get any value from the energy you don’t consume. 

“Can’t we just store it for later?” It’s easier said than done. Even the storage batteries have a capacity limit.

If you have a low consumption but high production, it will take you much longer to get a positive ROI.

#2nd Myth: You can store energy for the night

Not always.

If you don’t buy storage units, your solar panels will only work for the hours the sun is illuminating them. It’s not very useful, knowing there’s always a consumption peak at night.

But you don’t need to purchase these to have energy 24h. You can trade surplus energy in the so-called electricity grids.

Whenever you over-produce, you instead send the energy to the grid so that others can use it. You “sell” it to your electric company, and they can later provide you the energy equivalent.

You keep the electric bill almost always positive, zero, or very low.

You can purchase batteries. But since they alone don’t create energy, you’ll need to wait more years to recover the initial cost. Unless you produce way more, it’s not worth it.

#3rd Myth: You’re safe from power outages

If you don’t get the batteries, you’ll rely on the electric company to power your house at night. That means trading energy now to use it later.

Because you depend on another entity, you can’t receive energy if the grid stops working. Solar panels don’t protect you from power outages except if:

  • The power outage happens during the day, while the panels are still receiving sun exposure.
  • You installed storage batteries. These can prolong electricity by a few hours.

A generator would provide unlimited energy as long as you stored enough fuel. Panels with batteries last 3-6 hours at night, depending on consumption.

#4th Myth: More heat correlates to more sun, and therefore more power

You receive the most energy for the hours of direct exposure, which are around five per day. Every other hour produces suboptimally.

But the best hours don’t produce as much as they should either. High temperatures will decrease solar efficiency, especially when exposed for years.

We expect this problem to fix as new panel models come out. The ideal place to install them is cold climates with a low chance of cloudy weather.

If cold is optimal, that should be enough to prove that heat doesn’t relate to sunlight.

#5th Myth: Solar is unviable at this time

Of course, renewable technologies have “just started” to develop. We can always expect to find better models, making the previous ones too obsolete to keep them.

Although you don’t need to update for every new version, it won’t cost you much to do so. In 2020, solar is already profitable. You can spend a few years to recover the investment, make profits, replace with new panels, and break-even as the worst-case scenario.

Most solar panels perform around 20% efficiency. If you keep them for over 25 years, it decreases to ~80% of the original (16%). Even if you get a new model producing 32%, you already doubled your production.

A few years ago, scientists discovered panels with 40% efficiency and 50% in ideal conditions. The best you can find today is ~27%. Is it possible we could see those models released soon?

The question isn’t whether you save money or not, but how much you will. The answer? You save more as you upgrade.

#6 Myth. Free energy forever!

Theoretically, you can power your house for free as long as the panels work. These decrease efficiency over time and still need maintenance twice a year.

If you plan to keep them for many decades, you’ll need to consider extreme weather conditions. Damaged panels become unusable. More panels mean more surface occupied, therefore more chance of damage.

Let’s assume no terrible events happen. Even though your “free” energy powers your house, you still depend on a company to do so. Power outages rarely occur, so it shouldn’t be a big deal.

With all that considered, you still need to consume the equivalent that your panels cost to get their value. They won’t be free until years later.

Solar Panels: Miraculous Investment Or Money Pit?

How much exactly do you earn and spend with solar units?

Let’s assume ideal conditions: maximum exposure, average electric consumption, and panels that last over 25 years. 

In the worst case, you break even. The only difference with the traditional electric bill is, you paid for the energy upfront instead of every month.

Here are some solar panel efficiency stats to consider:

What you pay in this last example depends as well on efficiency. However, new models come up with high prices and decrease over time. Assuming you save more and more energy, you can expect the $10K-$26K range to maintain regardless of efficiency.

Now that we have the data, let’s make some observations.

How Do Panels Save Money?

  • Solar power gets cheaper over time. These can lower your electric bill, even get paid from your electricity “provider.”
  • With complementary devices, solar panels can protect your home from power outages. Batteries last a bit less than solar panels.
  • Small solar units are portable. You won’t generate enough to power a residence, but you can relocate and bring them with you when traveling. These have zero removal costs.
  • Panels require maintenance work twice a year at most. In extreme weather conditions, you may need to clean them after thunderstorms, hails, high winds, or cyclones.
  • Under maintenance, solar units can last over four decades. After ten years, you will have likely recovered the investment. 
  • After 25 years, they still operate at 80% efficiency (so you can sell them on secondary markets). By that time, you can afford units producing 50-100% more than the original ones for a similar price.
  • Most panels come with a five-year guarantee to cover damages.

How Do Solar Panels Cost You Money?

  • Solar panel prices start at $2000 and go all the way up to $10K for complete installations. 
  • If your roof doesn’t support them, it requires structural changes. That may cost more than all the panels combined.
  • If your panels broke or you want to replace, it will cost $400-$800 to uninstall them.
  • Unless you buy storage units, you won’t be able to use solar energy at night.

You might also want to know when the best time to buy appliances is?

Who Should Get Solar Panels?

Solar is accessible and convenient. But that doesn’t make it the solution for every individual problem. Know what you’re looking for aside from “saving money while protecting the environment.”

Are you going to move soon?

That could be either good or bad news. If you’re looking for a new house, remember to cover the $800 fee to uninstall the panels (bad).

Or you can sell your house with those panels, increasing its value.

If you move to a permanent location (good), you can get all their value. If your roof didn’t support solar systems, you should look for that in the next house you purchase.

Also, avoid installing these devices on shady or shared roofs.

Are you looking for low-cost panels?

Cheap doesn’t mean low quality here. Other people may be selling used panels, which work as good as the new ones. Efficiency falls around 80% after 25 years, but you’ll still be paying less than in the official store.

When buying low-end panels, the new releases will outperform yours by a large margin. As long as they work, used solar units are worth it.

Do you want energetic independence?

When your goal is to prepare for emergencies (or replace your electric company completely), generators may do better than solar panels.

As long as you have fuel, you will keep having electricity (if you don’t mind the loud noise). But with solar, you need the panels, the batteries, and concentrators (increase efficiency).

You should get both. The difference is, you can easily carry a generator around. With solar, you can’t bring all your roof units on a trip.

What are your consumption habits?

You will not need many solar panels to maintain your house. If you don’t find a way to sell or store that energy, it will be a waste. 

If you produce and consume little, it may take over a decade to break even. Solar may not be worth it.

Closing Thoughts

Solar panels save money with little exceptions. Although technology is progressing fast, there’s no point in waiting when you could start saving today.

Know how much energy you need, get enough units, and maintain them from time to time. You can forget about your electric bill (except if they pay you for providing them).

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