How to Calculate the Average Monthly Electric Bill with Solar Panels?
Switching to solar power is exciting, but one of the first questions many people ask is, “How much will I still pay for electricity each month?” Even with solar, a small electric bill may still be incurred. In this article, we’ll walk through how to estimate your average monthly electric bill after installation, including key formulas, influencing variables, and practical tips for maximizing savings.
Why Understanding Your Post-Solar Bill Matters
Understanding your likely electric bill after installing solar is critical for:
- Evaluating return on investment (ROI)
- Selecting the right system size
- Setting realistic expectations
- Determining whether you need battery storage or grid backup
Whether you’re installing rooftop panels or a full solar panels array, this calculation helps anchor your financial planning.
Step-by-Step Calculation
1. Determine Your Monthly Electricity Usage
Review your recent utility bills to determine your average monthly usage in kilowatt-hours (kWh). Let’s say your household uses 600 kWh/month.
2. Estimate Solar System Output
Use solar modeling tools or installer estimates to find how much your system will produce. For example, a 5 kW rooftop system might generate 650 kWh/month (varies with location, orientation, shading, etc.).
3. Calculate Self-Consumption vs Export
If your system sometimes produces more than your usage, you’ll export energy to the grid. Suppose you consume 70% of what your panels generate and export the remaining 30%. That means:
- Self-consumed energy = 650 × 0.70 = 455 kWh
- Exported energy = 650 × 0.30 = 195 kWh
Depending on your utility’s net metering or feed-in tariff, exported kWh may reduce your bill.
4. Estimate Grid Consumption
Your grid consumption is your usage minus what your panels supplied directly:
- Grid energy needed = 600 – 455 = 145 kWh
If solar overproduces (i.e., your usage is lower than panel output), you might even consume zero grid electricity and export surplus.
5. Account for Fixed Charges
Many utilities have base fees or minimum monthly charges regardless of usage. Suppose your fixed fee is ₱200/month.
6. Combine Costs
Let’s assume your electricity rate is ₱9.00/kWh and your export credit is ₱4.50/kWh.
- Cost of local grid usage = 145 × ₱9.00 = ₱1,305
- Credit for export = 195 × ₱4.50 = ₱877.50
- Net energy charge = ₱1,305 – ₱877.50 = ₱427.50
- Add fixed fee = ₱200
- Estimated monthly bill = ₱627.50
This is a simplified example; actual credits, peaks, rates, and taxes may change the result.
Adjustments for Battery-backed Systems
If you include battery storage in your household solar energy system, your self-consumption rate may rise significantly because you can store excess solar rather than export it. But factor in battery round-trip efficiency losses (say 10–15%), plus battery degradation over time.
For example, if your storage allows you to self-consume 90% instead of 70%, your grid consumption falls, giving you bigger savings, but you’ll need to subtract storage losses from the total.
Other Factors That Influence Your Bill
- Time-of-use rates: Some utilities charge more during peak hours; using solar or battery during peak times saves more.
- Shading and tilt: Poor panel positioning or shading reduces output.
- Weather variations: Rainy or cloudy months reduce production.
- Maintenance: Dirty panels or faulty inverters diminish efficiency.
- Degradation: Solar panels lose some capacity annually (e.g., 0.5–1%).
Tips to Maximize Savings
- Size your system smartly: oversizing too much wastes investment; undersizing limits savings.
- Use energy during the day: shift usage (laundry, appliances) to solar production hours.
- Optimize exports: export when credits are highest (if applicable).
- Clean and maintain: keep panels clean and monitor system health.
- Careful battery planning: storage can raise self-consumption, but only if economically justified.
- Monitor performance: compare actual vs estimated output to detect faults early.
To Conclude
Estimating your average monthly electricity bill with solar panels requires gathering usage data, estimating system production, and accounting for net metering, fixed charges, and possibly battery performance. Although calculation involves many variables, a well-sized system often leads to dramatic reductions in your monthly costs.
By making smart design and operational choices, you can minimize your grid dependency and maximize the financial gains of transitioning to solar.