In 2019 alone, over 2 million homes had solar panels installed. In the early days of solar energy panels, proponents were drawn in by their desire to reduce their impact on the environment more than anything.

But after more than a decade of falling costs for solar panels installation, more and more people are turning to photovoltaics for the potential energy savings.

Do the savings make up for the cost of purchase and installation? To find out, let’s take a look at how they can save money and the factors that influence those potential savings.

How Do Solar Energy Panels Save You Money?

Solar panels capture energy from the sun and convert it into useable electricity. If you’re at all familiar with the concept you probably understand that much. But how does that work in terms of your monthly power bill?

Well, let’s look at the next 30 years because that’s the average lifespan of a modern solar system.

Suppose you’re very frugal with your energy use and your power bill is only around $50 a month. That adds up to $30,500 over ten years. If your bill is $100 or even $200, adjust accordingly.

Meanwhile, a modern solar array can push that figure into negative numbers.

In localities where it’s allowed, power companies are required to “purchase back” any excess power you produce that winds up put back out into the grid, usually in the form of credits on your next power bill. With a large enough solar array, you could hypothetically neutralize your power bill altogether.

What Factors Influence Your Solar Panel Energy Savings?

So “neutralizing your power bill” does sound enticing. But an important note is that how much you can save, and how much you pay upfront, does depend on your location.

For one, households that use more power stand to benefit the most. If you’re that hypothetical consumer who only uses $50 worth of power a month, it might take you a while to break even.

Federal and state incentives are another important factor. Some states are more generous than others in terms of enticing residents to switch to solar.

Colorado is a good example. As a state with a more green, eco-inclined culture, they’ve passed some very constructive solar incentives that can reduce the upfront cost to homeowners. To see how these incentives work in practice, learn more about how some states reduce the cost of solar to the consumer.

It’s Time to Think About Investing in Solar Panels

At this stage, it’s clear that the future will be solar-powered. Even if climate change weren’t a factor, we would exhaust the earth’s total supply of fossil fuels before the end of the century at our current rate of consumption anyway.

No matter what, how we power our society will need to change. Investing in solar energy panels now gets you in on the ground floor, helping to maximize your long-term savings

But it’s only one way you can take a bite out of household bills. For more on how to bring costs down, follow our latest money and household news.