As renewable energy becomes increasingly accessible and widespread, more and more homeowners are turning to solar power to reduce their carbon footprint and save on monthly electricity bills. But how much can you actually expect to save on electricity bills after installing solar panels?
The exact answer varies depending on several factors, including your location, system size, and electricity consumption. But even a rough estimate proves solar panels can provide significant long-term savings for homeowners.
Let’s look at the factors influencing average electricity costs and how to estimate your potential savings.
How Much Is the Average Electricity Bill?
According to the U.S. Energy Information Administration, the average United States electric bill is $121.01, based on data collected from 2021. Scroll through the table below to find average electric bills organized by state.
| State | Average Monthly Electricity Bill (USD) |
| United States (Avg.) | $121.01 |
| Alabama | $147.75 |
| Alaska | $133.89 |
| Arizona | $131.35 |
| Arkansas | $123.69 |
| California | $123.67 |
| Colorado | $91.96 |
| Connecticut | $156.21 |
| Delaware | $118.85 |
| District of Columbia | $92.42 |
| Florida | $130.40 |
| Georgia | $134.11 |
| Hawaii | $177.78 |
| Idaho | $97.62 |
| Illinois | $95.86 |
| Indiana | $126.51 |
| Iowa | $109.63 |
| Kansas | $115.53 |
| Kentucky | $124.67 |
| Louisiana | $131.37 |
| Maine | $99.44 |
| Maryland | $127.62 |
| Massachusetts | $136.37 |
| Michigan | $117.57 |
| Minnesota | $104.76 |
| Mississippi | $135.31 |
| Missouri | $118.55 |
| Montana | $97.84 |
| Nebraska | $108.09 |
| Nevada | $110.17 |
| New Hampshire | $125.24 |
| New Jersey | $112.39 |
| New Mexico | $87.31 |
| New York | $116.70 |
| North Carolina | $120.38 |
| North Dakota | $112.93 |
| Ohio | $112.21 |
| Oklahoma | $119.69 |
| Oregon | $106.49 |
| Pennsylvania | $117.11 |
| Rhode Island | $130.40 |
| South Carolina | $138.65 |
| South Dakota | $124.50 |
| Tennessee | $130.98 |
| Texas | $132.40 |
| Utah | $80.87 |
| Vermont | $109.24 |
| Virginia | $130.92 |
| Washington | $99.45 |
| West Virginia | $129.61 |
| Wisconsin | $100.18 |
| Wyoming | $96.82 |
How Much Do Solar Panels Save the Average Household?
The average savings from solar panels varies based on state electricity rates and other factors like average sun hours, usage, and local incentives.
The average residential solar array has a power output of 7.15 kW. Assuming an average of 4.5 peak sun hours per day, this system would have a daily production of 32.2 kWh and a monthly output of around 965 kWh.
The average 2021 electricity bill in the U.S. was $121.01. Considering the U.S. average monthly electricity usage of 886 kWh, a 7.15 kW solar array would produce more than this and save the average homeowner $121.01.
We can also estimate the savings state by state. For U.S. states with an average monthly usage below 965 kWh, a 7.15 kWh solar array will completely cover their electricity usage. The estimated monthly savings would equal their average electricity bill for these states.
For the states with an average monthly usage above 965 kWh, we can determine the estimated savings by multiplying this monthly power output by the average electricity rate in that state.
For example, the average Alabama home with a solar array that generates 965 kWh of energy at a rate of 12.96 cents per kWh will have a monthly savings of $125.06:
965 kWh average solar array output x $0.1296 cents per kWh = 125.06
| State | Average Price per kWh (cents) | Average Monthly Usage (kWh) | Estimated Monthly Savings with Solar Panels (USD) |
| Alabama | 12.96 | 1,140 | $125.06 |
| Alaska | 22.55 | 594 | $133.89 |
| Arizona | 12.54 | 1,048 | $121.01 |
| Arkansas | 11.27 | 1,098 | $108.8 |
| California | 22.82 | 542 | $123.67 |
| Colorado | 13.07 | 704 | $91.96 |
| Connecticut | 21.91 | 713 | $156.21 |
| Delaware | 12.52 | 950 | $118.85 |
| District of Columbia | 13.09 | 706 | $92.42 |
| Florida | 11.90 | 1,096 | $114.84 |
| Georgia | 12.51 | 1,072 | $120.72 |
| Hawaii | 33.49 | 531 | $177.78 |
| Idaho | 10.16 | 961 | $97.62 |
| Illinois | 13.18 | 728 | $95.86 |
| Indiana | 13.37 | 946 | $126.51 |
| Iowa | 12.73 | 861 | $109.63 |
| Kansas | 12.98 | 890 | $115.53 |
| Kentucky | 11.50 | 1,084 | $110.98 |
| Louisiana | 11.02 | 1,192 | $106.34 |
| Maine | 17.02 | 584 | $99.44 |
| Maryland | 13.12 | 973 | $127.66 |
| Massachusetts | 22.89 | 596 | $136.37 |
| Michigan | 17.54 | 670 | $117.57 |
| Minnesota | 13.50 | 776 | $104.76 |
| Mississippi | 11.56 | 1,171 | $111.56 |
| Missouri | 11.41 | 1,039 | $110.11 |
| Montana | 11.22 | 872 | $97.84 |
| Nebraska | 10.75 | 1,005 | $103.74 |
| Nevada | 11.49 | 959 | $110.17 |
| New Hampshire | 19.85 | 631 | $125.24 |
| New Jersey | 16.35 | 687 | $112.39 |
| New Mexico | 13.52 | 646 | $87.31 |
| New York | 19.48 | 599 | $116.70 |
| North Carolina | 11.32 | 1,063 | $109.24 |
| North Dakota | 10.85 | 1,041 | $104.70 |
| Ohio | 12.77 | 879 | $112.21 |
| Oklahoma | 11.00 | 1,088 | $106.15 |
| Oregon | 11.37 | 936 | $106.49 |
| Pennsylvania | 13.76 | 851 | $117.11 |
| Rhode Island | 22.30 | 585 | $130.40 |
| South Carolina | 12.86 | 1,078 | $124.10 |
| South Dakota | 12.22 | 1,019 | $124.52 |
| Tennessee | 11.07 | 1,183 | $106.83 |
| Texas | 12.11 | 1,094 | $116.86 |
| Utah | 10.43 | 775 | $80.87 |
| Vermont | 19.26 | 567 | $109.24 |
| Virginia | 11.96 | 1,094 | $115.41 |
| Washington | 10.11 | 984 | $97.56 |
| West Virginia | 12.15 | 1,066 | $117.25 |
| Wisconsin | 14.52 | 690 | $100.18 |
| Wyoming | 11.17 | 867 | $96.82 |
6 Factors That Influence the Amount of Savings
As you can see in the tables above, the amount of savings varies widely by state. Besides your location, other factors can influence the reduction that you’ll see on electric bills:
- Location
- System size
- Energy Consumption
- Electricity Rates
- Government Incentives
- Panel Quality
1. Location
The amount of solar power you can harness is directly related to the amount of direct sunshine your area receives. Referred to as “peak sun hours,” this measurement reflects the average hours the sun is shining per day. A solar array in a region with six sun hours per day will collect twice as much energy as an array with only three sun hours.
The temperature in your area can also affect solar array output and, correspondingly, your potential savings. When temperatures get too hot, solar panel efficiency will drop. In general, solar panels will perform better in cooler climates.
2. System Size
Your solar array’s size correlates with your savings. Purchasing one solar panel won’t have much of an impact on your electric bill. Installing a full rooftop array will have a much more significant effect, especially when considering the savings over the array’s lifetime.
3. Energy Usage
The more energy you and your family use, the more savings you could receive. If you have minimal energy and electricity usage. However, the typical family can expect huge savings over time on their electricity bills based on average energy usage and rates.
4. Electricity Rates
People with higher electricity rates will receive a proportionally more significant reduction in their electric bill. In states like Hawai’i — where electricity costs over 33 cents per kWh — the potential for savings is huge! Each Hawaiian solar panel will provide over three times the savings compared to states like Louisiana and Oklahoma, where the average electricity rate is around 11 cents per kWh.
5. Incentives
Numerous federal and state incentives can provide savings on the purchase and installation of a residential solar system. Tax credits, rebates, and net metering programs can significantly reduce your electricity bill.
Net metering allows homeowners with grid-tied solar panel systems to receive credit for excess electricity sent back to the grid. Under net metering, utility companies track the amount of excess electricity the solar panel system generates and sends to the grid and the amount of electricity the homeowner consumes from the grid.
If the solar power system generates more electricity than is consumed, excess electricity is credited to the homeowner or business and applied against future bills. In locations with many hours of peak sunlight, this can result in significant savings on monthly electricity bills.
The Federal Solar Tax Credit can knock off thousands of dollars from the initial installation and purchase costs. Additional rebates and credits are available through local and state agencies.
6. Panel Quality
The quality of your solar panels significantly impacts their energy production and potential savings. Only purchase your solar panels from a reputable manufacturer. Buying cheaper panels can save you money upfront but will lose you money in the long run.
Even the highest-quality panels require some maintenance to function at peak efficiency. Keep your panels clean, removing dirt and debris — and ice and snow accumulation — regularly.
Make sure that trees and bushes do not cast shadows on your panels. Impeded sunlight can drastically reduce the panels’ production. Also, check for damage regularly. Depending on how your system is wired, having one damaged panel in your array can reduce the output of the whole array.
Lastly, make sure to orient your panels at an optimal position to capture sunlight. You can use tilting brackets or solar trackers to maximize your panels’ efficiency as the sun’s trajectory changes throughout the year.
How to Estimate Your Potential Savings with Solar Panels
With so many factors at play, it can be challenging to calculate the savings that installing solar panels will provide for your household. To estimate your potential savings with solar panels, follow these steps:
- Determine your average monthly energy consumption in kilowatt-hours (kWh) by reviewing your recent electric bills.
- Find the average cost per kWh of electricity in your area listed on your electric bill or provided in the table above. The rate can serve as a baseline to estimate potential savings.
- Research the cost of installing a solar panel system for your home. This cost will vary depending on your home’s size, energy usage, and other factors. Some homes will still need energy from the grid, even with many solar panels. However, if you live off-grid or in a tiny house, you can power your entire home with a Power Kit and an appropriately-sized solar array. For larger houses, a whole home generator is also a viable off-grid energy solution.
- Estimate the amount of electricity a solar panel system would generate based on your location, panel orientation and tilt, and other factors.
- Calculate your estimated monthly savings by subtracting the cost of the electricity generated by your solar panel system from your current monthly energy bill. It can be a rough estimate. Leave some margin of error to account for factors like incentives, financing costs, and changes in electricity rates over time.
- Consider the long-term savings potential of solar panels, which can provide savings for over 25 years, depending on the system and maintenance.
- To maximize your savings, consider installing a whole home generator solution. EcoFlow’s off-grid systems combine one or more EcoFlow DELTA Pro portable power stations with solar panels to maximize the system’s energy output. Using a power station allows you to store energy for power outages and provide expansion options for even more future savings.
Frequently Asked Questions
The average 5 kW residential solar system can save $100 to $150 monthly on electric bills. The actual savings depends on various factors, including solar array size, energy usage, and electricity costs in your area. Weather conditions and the orientation of the panels also play a role.
Final Thoughts
With proper planning, solar power provides clean, renewable energy and significant long-term savings. By estimating your potential savings and carefully considering factors like location, system size, and energy consumption, you can determine whether solar panels are a smart investment for your home.
If you aren’t ready to install a complete solar array, you may want to start with a scaled-down solar generator that allows you to enjoy the benefits of solar power without committing to an extensive rooftop solar array.
EcoFlow is a leading manufacturer of solar solutions, including high-quality solar panels, innovative solar generators, and whole-home backup power solutions. Shop EcoFlow today to find your clean, renewable electricity solution.