Updated: Jun 17, 2020
by Dr Aznan Ezraie Ariffin.
It is only natural to be sceptical of new products that boast promises of “saving you tons of money” with so many trendy investment opportunities available in today’s day and age. Solar panels are no different, it claims to be saving money through reducing the electric bill as one of the main appeals and selling points for solar as a product and premise upgrade. The simple answer to the question “do solar panels really save you money?” is yes. However, how much one will save depends on a number of factors. Direct hours of daily sunlight and size and angle of roof are both important, but local electricity rates play the biggest role in determining how much solar can save on the electricity bills.
How much do solar panels save on electric bills? The first step to understanding how much solar can save you is to calculate how much you are currently spending on electricity every year. According to TNB’s statistics, there are more than 100 thousand residential customers with an average monthly bill of more than RM 500. This bill amounts to a usage of 1000 kilowatt-hours (kWh) monthly. Thus using this data, this customer pays RM 6,000 annually on their electricity bill alone. Next you have to consider the nature of electricity prices and determine what utility rates will be in years to come. When you compare the cost of utility electricity with home solar, you should keep in mind that you can expect electricity rates to increase over time, in Malaysian case, every regulatory period of 3 years. Over the past decade, national electricity costs have increased at about 6% every 3 years. Utility rate inflation is an added incentive for solar: when you generate your own energy with a rooftop PV system, you’re taking control of energy costs so that you are no longer victim to variable utility rates. The only costs associated with a solar system will be the cost of your installation and any added electricity costs in the event that your panels do not completely offset 100% of your electricity use because of the nature of solar as an up-front investment. As to whether or not your system will completely offset your electricity needs is primarily determined by how appropriately you size your PV system – you can calculate how many kWp system you will need to secure that percentage. Solar panels aren’t just good for the environment – you can benefit from serious savings over the lifetime of your solar panel system.
How much will solar panels save you? Key points to consider Solar panels cost money upfront, but will save you money in the long term. The average home can save between RM 30,000 and RM 60,000 over the lifetime of your solar panel system. Start comparing custom quotes on the SEDA solar calculator to see your estimated savings from solar:-
How much do solar panels save? Do solar panels really save you money?
The simple answer to the question “do solar panels really save you money?” is yes. That being said, how much you’ll save depends on a number of factors. Direct hours of daily sunlight and the size and angle of your roof are both important, but TNB’s electricity rates play the biggest role in determining how much solar can save you.
What benefits will you get by having solar panels on the rooftop?
Do you still have an electric bill with solar panels?
Installing solar panels to make your electric bill will go away entirely is a common misconception. Even if you install enough solar to completely offset your electricity use, you will still receive an electric bill from TNB as long as your premise remains grid-connected. However, this doesn’t mean you will always be paying the full amount on your bill – here’s why:
Thanks to a policy called Net Energy Metering (NEM) 1-one-1, energy your solar panels produce that you don’t use immediately is sent to the grid in exchange for credits on your electric bill. This allows you to draw energy from the grid during the night (when the sun isn’t shining and powering your solar panels) but not pay any extra money, as long as you draw back the same amount or less than you provided to the grid. When you receive your monthly electric bill, any NEM credits you used that month will be indicated and you won’t be charged for that power. The remaining electricity you pulled from the grid that wasn’t offset by NEM credits that wasn’t produced and used immediately at your home is where you might see remaining charges for electricity.
In summary, yes, you will still receive an electric bill when you install solar panels. Importantly, the bill may not ask you to pay anything, and may simply indicate how your usage was offset by NEM credits for the month. In the case where you provide more electricity to the grid than you pull, TNB will roll over your unused NEM credits to the next month for you to take advantage of (up to 24 months). Regardless, installing solar panels will almost certainly lead to lower average monthly electric bill charges, and may eliminate your monthly electric bill in some cases.
How much can solar panels reduce your carbon footprint?
Financial returns are a major incentive for going solar, but money isn’t the only thing that solar panels save. When you install solar, you’re also improving the environment and reducing greenhouse gas emissions. That’s why the question “How much can solar panels save?” can be answered two ways: how much money solar can save and how much CO2 it can save (avoid being emitted into the atmosphere).
There is a formula to help you calculate how various green practices result in carbon emissions reductions. The below table converts solar energy production into greenhouse gas offsets using the metric converters 7.44 × 10-4 metric tons CO2/kWhr of energy produced and the national average for solar panel production ratio, 1.42 kWhr/ watt of power.
A good comparison point to use when thinking about carbon emissions is that a typical vehicle emits 4.7 metric tons of carbon dioxide every year. This means that a 6 kWp solar panel system comfortably offsets the emissions produced by one fossil fuel automobile in a year. In addition to significant bill savings, a solar system comes with the satisfaction of “taking a car off the road,” so to speak.
Solar panels can create big savings
Ultimately, regardless of whether you’re looking at finances or carbon emissions, a solar panel system will generate big savings for you. The deciding factor will primarily be the cost of electricity, which varies significantly depending on what rate are you paying now. Nonetheless, a good rule of thumb is if you are in middle- to upper-level TNB rates, solar will be a risk-free investment with major returns. On the emissions side, as panel system size increases, so do the carbon dioxide reductions in the surrounding environment, making solar an eco-conscious investment.
What can we offer?
At TNBX, together with our partners, we provide consultation and end-to-end solar solutions customized to your needs. For further information, please contact us at firstname.lastname@example.org