The Dawning of a New Energy Era
Nearly a century ago, the visionary Thomas Edison imagined tapping into the inexhaustible power of the sun. Today, that dream has become a reality. Technological and financial innovations have propelled renewable energy sources like solar into the mainstream, ushering in a transformative shift in how we power our homes and our lives.
As a self-proclaimed “progressive data geek” and homeowner, I couldn’t resist the opportunity to join the solar revolution. After moving into our new home in 2020, my spouse and I decided to take the plunge and install a solar panel array on our roof. Little did I know, this decision would set me on a journey of discovery, as I eagerly began crunching the numbers to understand the true impact of our solar investment.
The Solar Supercharger
When our 23 solar panels went online in June 2021, I was excited to see the power they would generate. The panels are rated to produce a total of 828 kilowatts (kW), but as I soon learned, that’s not the whole story. The reality is that energy production doesn’t quite reach that lofty peak, with maximum output occurring for a short period when the sun is highest in the sky and closest to the direction our panels face.
On our brightest, cloudless days, we’ve seen a peak of around 66 kW, and the highest total energy production we’ve ever achieved in a single day is 56 kilowatt-hours (kWh). That’s pretty impressive when you consider that in our first billing cycle after the panels were activated, our household’s average daily energy consumption was 53 kWh. In fact, during that initial month, our solar panels provided a whopping 75% of our energy needs.
Of course, the sun doesn’t shine with equal intensity throughout the year. As PVWatts data indicates, June is about 25% brighter than the average month. The best summer days generate almost twice as much energy as the best winter days. Over the course of our first year with the panels, they provided 38% of our total energy usage, including the natural gas we consume for heating.
| Month | Solar Energy Production (kWh) | Energy Consumption (kWh) | Solar Contribution |
|---|---|---|---|
| June | 1,317 | 1,771 | 75% |
| Annual | 5,000 | 13,000 | 38% |
The Power of Net Metering
One of the fascinating aspects of our solar journey is the concept of net metering. You see, there are many moments during the brightest parts of the day when we produce more energy than we consume at that very moment. Without a battery to store that excess, it flows back into the power grid, where someone else can use it.
But here’s the beauty of net metering: Any energy that we send back to the grid is credited to our utility bill. Since the grid is predominantly powered by non-renewable sources, our excess solar energy is mostly offsetting dirty power. In essence, the grid acts as a free, infinite-capacity battery, taking our excess when we have it and giving it back to us when we need it.
In our first full month with the panels, we consumed 1,144 kWh from the grid but sent back 690 kWh in excess. This means that our net consumption was just 454 kWh, and our utility bill savings were calculated based on that reduced amount. With our local utility’s marginal electricity rate ranging from 10 to 12 cents per kWh, we’re likely saving around $128 per year for every kilowatt of solar capacity we have installed.
The Value of SRECs
But the financial benefits of our solar investment don’t stop there. You see, in addition to the energy bill savings, we’re also earning something called Solar Renewable Energy Certificates (SRECs). These are essentially “fake tokens” that solar energy producers like us are credited with for each megawatt-hour (MWh) of solar power we generate, regardless of whether we consume that energy ourselves.
Electric utilities then purchase these SRECs to offset penalties for non-renewable energy production in local laws. It’s a bit like double-dipping, as we get to keep the energy savings from our solar production while also earning extra income from the SREC sales.
Here in Washington, D.C., the SREC market is particularly lucrative, with a price of around $400 per MWh generated at the time we installed our panels. Even after the 7% transaction fee to our broker and regular income tax, we’re still netting about $300 per SREC. In our first year, those SREC sales added up to a cool $1,875 in additional income.
Of course, the future value of SRECs is uncertain, as the market could be impacted by changes in supply, demand, and regulations. But for now, they’re providing a significant financial boost to our solar investment.
The Cost-Benefit Equation
Now, I know what you’re thinking: “That all sounds great, but what about the upfront cost?” Well, I’m happy to report that the numbers still add up.
The total cost of our 23-panel, 8kW solar array, after the 26% federal tax credit, was around $25,000. This works out to about $262 per watt of installed capacity, which is in line with the industry average.
While there are certainly some ongoing maintenance costs to consider, such as potentially removing the panels a few times over the next 30 years, those expenses are relatively minor. Our homeowner’s insurance did increase by $9 per year to cover the replacement cost of the panels, but that’s a small price to pay for the benefits we’re reaping.
In our first year, the total savings from reduced electricity bills and SREC sales amounted to approximately $2,933. If that trend continues, we’re on track to recoup our investment in around 9 years. And with the panels expected to last 25-30 years, that means we’ll be enjoying free, clean energy for the majority of their lifespan.
The Future is Bright
As I reflect on our journey into the world of solar power, I can’t help but be excited about the broader implications of this renewable revolution. Solar systems like ours are just the beginning, as technological and financial innovations continue to drive down costs and improve efficiency.
According to estimates from Bloomberg New Energy Finance, renewable sources like solar, wind, and hydropower are expected to account for half of our global energy mix by 2030. This transformation will allow us to meet our growing power needs in a more sustainable and environmentally friendly way, paving the way for a cleaner, healthier, and brighter future.
So, if you’re like me and can’t resist the allure of the sun’s boundless energy, now is the time to take the leap. The solar-powered home of the future is here today, and it’s waiting for you to join the charge.
