Are solar panels worth it as a BGE customer?
Why is it that so many BGE customers are installing solar panels in 2020?
People are installing solar because they realize it has potential to save them tens of thousands of dollars. Our research indicates solar installed in Maryland has the potential to save $50,000 in power savings over the lifetime of the system (25 years). Use this free calculator to calculate how much going solar could save you.
The incentives available now also make solar very attractive for homeowners. There are four main incentives that apply to BGE customers.
The federal tax credit has been the backbone of solar incentives for many years now. The 26% federal tax credit gives people a credit against their income tax for 26% of the total system cost. The credit can be used for up to 20 years. After tax time, this essentially makes your solar system 26% cheaper.
The second, Residential Clean Energy Grant Program. This is a grant of $1,000 for eligible systems. Essentially making solar systems $1,000 dollars cheaper.
The third, Solar Renewable Energy Certificates (SRECs). An SREC is a credit for 1 MW of electricity produced, an SREC can then be sold to the Utility. This means a solar system will make you money through the year as you sell your SRECs. Each SREC can be sold for about $20, meaning a 7.78 kW system produces about $200 per year in SRECs.
The fourth, is net metering. Net metering essentially a giant, unlimited, perfect battery. That BGE lets you use for free.
All these incentives make solar much cheaper upfront and over time. These incentives are the reason people in Maryland can save $50,000 over 25 years, without them solar will become much more expensive.
See how much solar could save you
What are BGE Net metering rates?
BGE offers full 1-1 net metering.
Solar arrays will at times produce more energy than the home can use, depending on time of day and electrical load within the home. When this happens, the excess energy is exported into the grid. Full Net Metering awards a 1 kWh account credit for each 1 kWh exported into the grid. This credit can then be exchanged for 1 kWh of power imported from the grid.
Net Metering effectively allows you to use the grid as a limitless battery for the solar energy generated by your solar system. The excess energy is sent to the battery (the grid) and the battery “charges up” (gains credits for each kWh). The battery can then be discharge (exchange credits for kWhs). Net metering economically “stores” energy for later use. In this way full net metering enables customers to eliminate the variable component of their usage bill.
For an average BGE customer owning a single family home and with a power bill of $230 per month the gross cost for installing a 12.8kW solar system is $30,720, which is $2.40 per watt. Upfront incentives (including the 26% federal solar tax credit) reduce this cost by $8,727 making the net cost $21,993.
How much will solar panels save the average BGE residential customer?
The savings will vary depending on how much your power bill is now, the specific BGE rate plan you are on and how suitable your roof is for maximum solar generation.
If I enter the details for a BGE customer that has a power bill of $230 per month into the best online solar panels calculator it tells me that I need a 12.8kW solar system that will produce 15,164 kWh's per year and that this system will likely return the owner a $101,643 profit even after repaying the capital over 25 years.
Zero-down financed solar system estimate for a BGE customer
Monthly savings year one $74
The graph above shows the savings for this customer in the first month that their solar system is live. It assumes that the system is purchased via a 100% loan product.
One of the common reasons why people have been slow to install solar panels, despite the excellent financial return they can provide, is that often the first months savings may not appear to be enough to motivate them to go through the process of buying solar. However, it is important to realize that solar savings grow over time as utility prices increase. As can be seen in the graph below, the solar saving are quite considerable when totalled over the 25 year life of the system
The overall lifetime profit will be even more with a cash purchase of the same system. The difference being that we have included the cost of interest in the lifetime savings summary below.
Zero-down financed solar system cash flow
|System Size||12.8 kW|
The above cash flow projection assumes a solar system that offsets 100% of power usage, a finance rate of 3.99%, a financing period of 20 years, a minimum utility charge equivalent to 10% of bill without solar, and a utility cost inflation rate of 4.5% p.a.
What is the average payback period for residential solar panels for a BGE customer?
The payback period for an BGE customer installing solar panels on their roof at home depends on their power usage prior to installing solar, the finance method they choose to pay for their solar system and the size of system they install. What we have done below is copy an extract from our BGE solar panel savings calculator which shows the payback period for a typical BGE customer. You can visit this calculator above and enter your own current power bill to see your solar savings and your likely payback period. You'll note that for customers with larger monthly power bills the payback time is usually slightly shorter because the cost of solar systems per watt usually reduces as the system size increases.
See your savings and payback period based on your electricity use and location in the BGE territory
Estimated system size 12.8kW (100% usage offset)
Pay Back Period
5 Years 4 Months
Est. Cost/WattEstimated Cost Per Watt
(after 26% tax credit and local incentives)
Annual Power Generation
Your total savings over the life of the system are estimated to be $101,643
|Estimated south facing roof space required||853 sq-ft|
|Levelized cost of power from this system over 25 years||6¢ cents/kWh|
|System cost reduction by upfront incentives||-$8,727|
|Average cost of utility power over 25 years (if you don't get solar)||32¢ cents/kWh|
|Equivalent Return on Investment (IRR)||19.9%|
|Monthly Savings year 25 (for 100% energy usage)||$661.40|
System prices are estimated based on the average reported cost of systems installed in the past year. Pay Back Period and Equivalent Return on Investment are calculated based on a 100% cash purchase. Estimated Cost Per Watt is calculated after claiming all applicable incentives. This estimate assumes you are able to take full advantage of potential tax benefits.
Cash Flow graph - Cash Purchase of this system
Residential Clean Energy Grant Program
Fixed $1,000 grant
Property Tax Exemption for Clean Energy Systems
100% property tax exemption for solar energy property
Sales and Use Tax Exemption for Solar Energy Equipment
Sales and use tax does not apply to solar energy equipment
Utilities must provide compensation for excess energy at the full retail rate
Energy Storage Tax Credit
30% of the costs to install battery storage, up to $5,000 maximum incentive. First come, first served basis, up to $750,000 maximum annual in the state.
Residential Renewable Energy Tax Credit
|Ongoing Production Incentives||Value Per Year|
|Solar Renewable Energy Certificates (SRECs) (State)||$1,061 per year|
|TOTAL (over System Lifetime)||$10,610|
Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area. If you still are unsure about the eligibility criteria of some of the solar incentive programs, please discuss with the solar installer representative who may contact your shortly, or visit the solar incentives discussion forum where the most common questions are likely to have already been answered.
Detailed information about your estimate
|System Size (for 100% usage offset)||12.8 kW|
|Annual Power Generation||15,164 kWh|
|Pay-back time (assuming Cash purchase)||5 Years 4 Months|
|Internal Rate of Return (IRR) on Investment||19.9 %|
|Total Upfront Incentives and Rebates||-$8,727|
|Net Cost of System after rebates and incentives||$21,993|
|Total Cost of Utility Power Avoided over 25 years||$122,991|
Please note that the investment return figures do not include the possible increase in property value.
What are the environmental impacts from BGE customers installing solar panels for their home?
While most home owners ultimately decide to install solar panels because of the financial savings they offer over time, for some people it is the environmental impacts of this choice that drive the decision. Here is a break down of the environmental benefits typically delivered by the installation of a 12.8kW solar system in the BGE service territory..
A solar system generating 15,164 kWh per year will save you money AND make the world a nicer place
on average per year
Reduces CO2 emissions
metric tons per year
Equivalent to planting
Equivalent to driving
less per year
CO2 emissions calculation based on the electricity generation and emissions data for your state in 2015 as published by the US Government Energy Information Administration.
Are solar panels worth it for BGE residential customers?
Short answer is, yes, absolutely. If Baltimore residents don't install solar while these generous incentives are available, they will be kicking themselves. Seriously, the government and state are offering to pay a substantial amount, for you to install a solar system, and as an added benefit BGE will let you use the grid as a giant, perfect battery.
Think about this for a second. The government want to pay some of your system for you, you will be helping the environment, and over the next year and decades ahead you won't have to fork out any money for electric power.
Once you buy the system it is expected to work for at least 25 years with little to no maintenance. After you install solar you may never have to pay for electricity. Sure, buying the system may be expensive, but that's why the government and state will help you pay for it.
How much power do solar panels installed in the BGE territory produce ?
Solar panels in Maryland typically produce 1,150 kWh annually per 1kW of peak DC. In simpler terms, in Maryland solar produces a moderate amount of power compared to some of the sunnier southern states. Solar installed in states like California, Arizona and Florida produce more power than equivalent sized panels installed in Maryland, simply being closer to the equator, more solar energy falls on them for a longer period each year.
However, don't let this discourage you from going solar, beacuse solar panels in Maryland can still produce more than enough to power for your home.
See power production and also get pricing from local solar companies
How much does solar panel installation cost in Baltimore?
The cost of installing solar panels in Baltimore will vary with; brands of solar panels and inverters you choose, the installation company you choose to do the install, the relative ease or difficulty of installing solar panels on your home, and of course the amount of solar panels you need to cover your electricity usage.
Maryland has a very competitive retail solar installation market with many solar installer companies fighting hard for your business. This is why it's important to shop around and research solar companies in your area. The best way to check out if your choosing the right company to install solar is to read reviews of solar companies in Maryland.
It is common to see really good systems, using good brands of equipment being sold for around $3.60 per watt before state and federal tax credits for cash sales.
However, the average cost of a solar system in Maryland in 2018 is $3.25 per watt which for a standard 5kW residential solar system costs $16,250 before the state and federal tax credits and $10,675 after both tax credits are received.
Who are the best solar companies that service my local part of the BGE territory?
As the BGE territory covers a number of cities there are different solar companies operating locally in each as well as some that cover the whole territory.
If you are up to the stage of wanting quotes from solar installers you can get a system sized for your house and up to four quotes from installers that service your area for free online by entering your zip code below.
See my solar panel installation cost from your local installers
Find solar companies that operate in your area. Here is a list of the solar companies that work in the BGE territory.
How much electricity will solar panels produce where I live?
How do I get an accurate solar quote that takes into account my home and my power usage?
To get accurate solar quotes you (or your solar company) needs to work out how many solar panels you need on your home. To do this they need to know your power usage patterns. This will allow you to come up with the amount of solar panels you would ideally want to making your power bill zero. This article (link to How can I cut my electric bill as a Long Island customer page) explains ways that you can get hold of your power usage data either for your own analysis or to share with a solar company that you wish to have quote your home.
Once you determine the right amount of solar panels you then need to measure your roof to see how many panels will actually fit on your roof. Most solar companies can measure roof spaces online using tools that are similar to Google Maps (but are more accurate).
The www.solar-estimate.org website is the leading solar marketplace in America and allows you to both do an accurate online estimate of your needs and request quotes from solar companies through one interface.