How Much Money do Solar Panels Save?
In today’s economy, homeowners are always looking for ways to save; installing solar panels is one of them. With solar panels, you can lock in long-term savings on ever-rising energy costs.
However, the benefits might not be immediately apparent, given the relatively high up-front costs of installation.
At Brda Electric, we know homeowners want clear, honest answers about how much solar can save them. But we also understand the nuances involved and why it isn’t always obvious at first.
The truth is that most people will save significantly with solar panels, but the specific amount depends on variables like electricity consumption, conditions for producing solar power, and financing options. Below, we’ll explain everything you need to know to make your decision.
What Determines How Much Money You Can Save with Solar?
No two solar panel installations are guaranteed to have the same outcomes. Even if two houses with identical features each installed the same system, their savings could still differ quite a bit.
So, how much money do solar panels save? It depends on a few key factors, the biggest of which are:
- How much electricity your system can produce: Your sun exposure and your roof’s orientation, tilt, and shading matter, as does your system’s size and its panel efficiency.
- How much electricity you currently use: Solar savings are calculated by subtracting past/possible energy spend from the total cost of installation. As a result, high-usage homes see faster savings as their monthly bills eat into their total spend more quickly.
- Upfront costs and system financing: Paying in cash or up-front will usually equate to faster, higher savings. Interest tacked onto the total lifetime cost of loans increases how much you end up paying.
- Incentives and net metering credits: Although federal tax credits for solar panels are set to expire on December 31, 2025, some state and local governments offer other tax incentives for solar. Net metering credits can also offset costs by letting you send excess energy back into the grid to compensate for times when usage exceeds your production.
With a solid understanding of these variables, you can estimate your solar panel savings more accurately.
How Much Money Do Solar Panels Actually Save?
In theory, a solar panel can completely eliminate your monthly electric bill. In practice, it’s not always 100% savings on energy, at least at first. There may still be charges if your energy output doesn’t fully cover your utilization. Plus, you’ll need to subtract your would-be bill from your total install costs to get a full picture of your actual savings.
The general consensus is that energy savings are quite significant in the long term.
Experts at EnergySage estimate that average solar panel savings range from $37,000-$148,000 over the course of 25 years, and the average homeowner can expect to save about $57,000 over the same period. That works out to about $2,280 per year over the warranty-covered lifespan.
It’s also important to note that 25 years is used as shorthand because that’s how long most commercial warranties last. But many solar panels can operate perfectly well for 30 or more years with regular maintenance. So, your savings will likely continue well beyond the warranty.
Lifetime Savings Over 25-30 Years
One way to think about how much solar panels will save you is to compare the total cost of installation to the electricity bills that are offset over time. Per EnergySage, solar panel systems cost about $30,000 on average, assuming a 10–12kWh capacity system that many homes need.
So, to break even, solar panels need to offset ~$30k (and that’s just where savings begin).
EnergySage provides estimates based on current bill costs (in 2025) over 30 years:
- A $50 bill today will cost $6,812 over 10 years, $15,782 over 20, and $27,594 over 30
- A $100 bill today will cost $13,624 over 10 years, $31,564 over 20, and $55,187 over 30
- A $150 bill today will cost $20,437 over 10 years, $47,347 over 20, and $82,781 over 30
- A $200 bill today will cost $27,249 over 10 years, $63,129 over 20, and $110,375 over 30
- A $250 bill today will cost $34,061 over 10 years, $78,911 over 20, and $137,968 over 30
Importantly, these figures factor in a 2.8% annual inflation rate, based on historical averages.
Given that the average residential electric bill in the US is about $115 per month, most people who install solar panels will break even well before the end of their warranty. Those savings are even more rapid for households on the higher end of the usage spectrum, likely within 10 years.
Put simply: Unless your monthly electricity bills are extremely low right now, that break-even point of $30K in offset costs is likely to happen within 20 years, if not sooner.
Example Savings Scenarios
Another way of thinking about the total savings of a solar panel system is in the raw number of kilowatt-hours (kWh) offset per year. This gets at more specific potential savings, irrespective of cost, and it’s done by multiplying the kWh output of your system by the average price of a kWh.
Per the US Energy Information Administration (EIA), the average price of a kWh across the US is $00.1807 (~18¢). This varies heavily, with some locations closer to 16¢ and some around 30¢.
The three main categories of solar panel systems are based on house size and needs:
- Small homes may get away with just a 4kW system
- Typical homes often need at least a 6-8 kW system
- Higher-output homes may need a 10kW+ system (this includes large homes and electric vehicle (EV) homes)
The kW figure is approximately the amount of kWh the system will produce in a given year.
Assuming each system produces electricity up to its full capacity, they would offset about $720, $1,080-$1,400, and $1,800+, respectively, in just one year. And, given that energy costs tend to rise over time rather than fall, these savings will only become more dramatic with each year.
Understanding Your Payback Period
Solar panels are an up-front investment. Homeowners who install them pay a lump sum now with the understanding that, over time, they will have saved more than what they initially paid.
In the simplest terms, “payback period” is the time it takes for your savings to cover the cost of your investment. As detailed above, in most cases, that’s likely to be within 20 years.
To calculate this period for yourself, take your quoted cost for installation, including all fees, incentives, and other modifiers. Average it out over the number of years in your warranty or lifespan. Then, estimate your electric bills over the same period, ideally accounting for inflation. Average that out for a per-year expense as well.
The number of years it takes for the first number to eclipse the second is your payback period. After that break-even point, all savings are gravy on top.
People with higher electricity usage will see faster paybacks. Meanwhile, low usage, poorer loan terms, and/or inefficient operations (e.g., shaded roof) may result in slower payback periods.
However, thanks to inflation, solar becomes more valuable with each passing year.
Why Your Electric Bill May Still Be High After Installing Solar
Another reason solar panels may not account for 100% savings, at least not right away, is that your production may not fully cover usage. You may still have an energy bill after installing solar.
Some common causes for higher-than-expected expenses even after solar installation include:
- Increased usage after going solar
- Not enough panels installed to offset demand
- Seasonal fluctuations in production or usage
- Batteries and EV chargers increasing daily usage
Most of these issues can be addressed with attention to detail and proactive care:
- Monitor your systems to see how much energy you use
- Consider adding more panels if your demand is higher
- Try to reduce daytime usage for better efficiency
- Install other home energy efficiency upgrades
In many cases, solar power can cover all or most of your energy usage, with negligible overages still requiring you to draw a bit of energy from the grid. Contacting a professional to ensure your solar panel system is the right capacity and is operating effectively will minimize these charges.
Beyond Savings: The Long-Term Value of Solar
Solar panels are more than cost-saving vehicles. They also provide other benefits for homeowners and society at large, which contributes to their popularity.
To start, installing a solar panel system is a high-impact electrical upgrade that can boost the value of your home. Environmentally-conscious upgrades like these are appealing to younger buyers, as well as home-seekers who appreciate cost-saving initiatives. For these reasons, it’s estimated that solar panels can add up to 10% to the value of your home when selling (about $10k for every $100K it’s worth).
There’s also the peace of mind that comes from system longevity, along with a long-term warranty. Solar panels tend to require minimal maintenance and provide value for 25+ years.
Then, there’s the environmental impact. Solar panels can reduce carbon emissions, contributing to about 8.9 metric tons of emission reductions annually for a 10kW system. So, a household that installs solar panels is actively making its community—and the world—greener.
Are Solar Panels Worth It for Homeowners?
Solar panels require a large up-front investment, which may give some homeowners pause. But, in most cases, solar panels are absolutely worth installing. They provide immense cost savings in all but the most extreme cases of low energy use or inefficiency. And they provide other kinds of benefits in terms of home value, ease of mind, and positive environmental impacts.
However, there are some cases where solar panels may not be worth it. Homes that use very little electricity (under 4kWh/annually) may not see their investment pay off in time. The same is true for homes with poor conditions for solar operation (e.g., shade, suboptimal roof angle).
There are also some cases where solar isn’t an option, at least directly. The US Department of Energy’s overview of solar notes that those who can’t install solar on their own homes can still take advantage of the benefits through community solar programs.
That said, for most buyers, in most places in the US, solar panels are worth it.
How Brda Electric Helps You Maximize Your Solar Savings
Brda Electric helps homeowners upgrade their homes and take advantage of all the benefits solar energy has to offer. We have local expertise in the areas we serve, including much of Missouri, parts of Illinois, and greater Tampa, Florida. We know local laws and regulations, so you can steer clear of potential issues and take advantage of all available incentives.
We pride ourselves on professionalism and honesty. Our experts will give you real estimates of how much solar you need at present, along with whether a higher amount may be required later. With 35+ years of residential electrical experience, we know what homeowners need.
We’re also happy to walk through upgrade and configuration options, without pressuring you into installing anything you won’t need. Our experts always look at homes on a case-by-case basis, recommending upgrades like smart panels, EV chargers, or even generator integration only when it makes sense for the home (and its occupants’) needs.
Start Saving on Energy Today
Ultimately, solar panels are an excellent upgrade for most homes, and the absolute best savings come from a system designed around your usage and your home, installed by local professionals.
Brda Electric fits that bill. We’ve proudly helped many homeowners save money and improve their quality of life by going solar. Contact Brda Electric for a fast, accurate solar savings estimate.
Sources:
- Energy Harbor. How much is the average monthly electric bill in the U.S.? https://energyharbor.com/energy-resources/energy-savings-tips/what-is-the-average-gas-electric-bill
- EnergySage. How much money do solar panels save in 2025? https://www.energysage.com/solar/much-solar-panels-save/
- Internal Revenue Service. FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, AND 179D under Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill (OBBB). https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb
- Nerdwallet. Do Solar Panels Increase Home Value in 2025? https://www.nerdwallet.com/home-ownership/solar/learn/do-solar-panels-increase-home-value
- US Department of Energy. Will I Save Money with Solar Energy? https://www.energy.gov/eere/solar/articles/will-i-save-money-solar-energy
- US Energy Information Administration. Electric Power Monthly. https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a