Solar Installers get a lot of calls from consumers who are unsure how to work out how much their solar power system is saving them.
The most common mistake made by consumers is to open their power bill and assume that their system has only saved them the amount of the credit that is listed on the bill. This approach does not measure the full value of the savings because it does not measure the solar power that was generated on the roof and consumed in the building before it was recorded on your meter.
Working out a return with 1:1 Net Metering
Working out the true return is a relatively easy process in areas where there is 1:1 net metering, where your utility pays you the same retail price for excess solar power that is fed into the gird as you pay when you buy power from them (either at night or when your solar generation during the day is less than your consumption). In this instance, you simply need to multiply the kwh of power produced for the month by the retail price you pay for power.
However, even this simple calculation can be more difficult than it appears. Firstly, inverters generally have a display that can show energy produced today and energy produced for all time, but not a display that shows energy produced for a particular month. The only way to get this information is to either install a monitoring system that logs this data or manually recording the “Energy Total” reading each month. The second difficultly in working out even this simple calculation is that the amount most people pay for power varies with usage so, for example, a consumer in California might pay 14 cents per kwh for their first 100 kwh per month but pay 20 cents per kwh for power used in excess of this amount. (just an example)
When calculating the value of the savings that your solar power system has delivered, make sure to use the value of power for the most expensive units of power that you have purchased during a period.
The reason for this is that if you did not have a solar power system, and therefore had to buy additional power, all of this additional power would need to be purchased at the top rate. In some cases, the power may have to be purchased at an even higher rate if extra consumption pushes you into a higher pricing band.
Working Out a Return Where There is Not 1:1 Net Metering
Where there is not 1:1 net metering, you will need to work out your return in two parts, because the solar power you generate has a different value to you depending on whether it gets used in your house or exported to the grid. This means you firstly have to work out what part of your total solar power production was used in the house and what part was exported to the grid. You can usually get the amount of kwh that was exported to the grid from your power bill. Simply multiply the number of kwh by the rate you get paid for solar power exported to the grid and you have the savings you got from the power that was exported.
Getting the savings from the solar power that was used in the house is harder because as stated above most inverters don’t have a display on monthly energy output. To get this, you either need to record the Energy Total number from your inverter on a set day each month or have a monitoring system installed that allows the display of this data. Once you have this figure then you need to deduct the kwh’s that were exported to the grid (from your power bill) to get the kwh’s of solar power used internally.
Solar Power Consumed Internally = Change in Etotal on Inverter During the Period - Power Exported to the Grid During the Period