Value of Solar

How Partially Offsetting Your Electric Bill Still Saves You Money

This post was written by employee-owner George Mulcahey, one of our Solar Advisors in Massachusetts, after he realized there was some confusion around partial offsets in solar design.

Imagine if someone came up to you and said you could pay a lump sum of money today to secure an everyday essential - gas, groceries, healthcare expenses, pet food, transportation costs, and more - for a 70% discount over the next 25 years. You wouldn't think twice about it! This analogy extends perfectly to the realm of partial-offset solar solutions. Let's shed light on this topic, as it's a popular point of conversation, particularly for homeowners with smaller roof spaces and high electricity bills. 

Milton Nh Solar GabrielskiA partial-offset system is one that covers less than 100% of a homeowner's electricity consumption. And for many people considering solar, the reality of their living situation - whether it’s limited roof space, unfavorable roof orientation, or the challenge of partial shading from nearby trees and structures - means that a full-offset system isn’t feasible. However, homeowners can still save money and reap the benefits of solar with partial-offset systems.

For many homeowners, the idea of solar energy means either complete freedom from electric bills or no deal at all. And who can blame them? The thought of investing in a project aimed at cutting ties with utility expenses, only to still receive monthly bills, can be off-putting at first glance. 

But let's take a step back and reconsider. Electricity is an unavoidable everyday expense, just like food and gas. Just because we have to pay for it doesn't mean we have to be at the mercy of someone else's terms. 

Consider this scenario: a homeowner consumes 9,400 kWh of electricity annually, and their solar system generates 7,562 kWh, providing an 80% offset. While some might be quick to dismiss this as insufficient, let's examine the financial implications. 

partial offset aurora image.jpg

Calculation Assumptions:
  • Net electricity rate: 31 cents/kWh.
  • Annual rate escalation: 3%.
  • Neglecting max panel degradation of 0.5% or less per year due to natural deviation in weather cycles.
  • Net metering available at 1:1 ratio.
  • System cost of $3.75 per watt.
  • Cash purchase (for simplicity). 
  • The solar array pays for itself (and then some) by year 5. 
  • By year 15, the homeowner enjoys savings exceeding $47,404. 
  • The remaining 20% of electricity costs amount to $11,522. 
  • After deducting system costs and uncovered bills, the homeowner still gains $21,263 by year 15 alone. 

Yes, you read that correctly! The partial-offset system has effectively covered the portion of electricity it couldn't initially offset and will continue to do so well into the future. 
oceanview photo jump.jpgNow, let's consider the alternative: continuing with conventional energy consumption. Over the same period, this approach would result in nearly $59,000 in electricity expenses, with costs continuing to escalate. This is assuming a 3% annual increase on electricity, (conservative compared to the real average increase: close to ~5% per year over the past decade). 
This is only looking at the first 15 years. With a 25-year warranty and estimated lifespan of over 30 years, the financial and environmental benefits become even more compelling. The contrast between the advantages of partial offset solar versus traditional energy consumption only grows wider over time.  

Partial Offset, Full Impact

lupine love this house.jpgShifting our focus to the non-monetary impact, embracing partial offset solar plays a crucial role in broader community and global efforts to transition towards renewable energy. By adopting solar technology, homeowners become advocates for sustainable living and inspire others in their community to consider clean energy options. Collectively, widespread adoption of solar power can accelerate the shift away from fossil fuels and towards a cleaner, more sustainable energy future for all. 
With favorable government and state incentives in place to drive the adoption of solar energy, less than 100% offset is nothing to shy away from; it certainly beats 'business as usual' under the right circumstances. There's ample opportunity on that small roof to make a significant positive impact on both your pockets and the planet. 
Imagery and production simulation are courtesy of Aurora Solar 

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