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Benefits of Having a Solar Energy System

Updated: Jun 24, 2020

Nowadays, we cannot live anymore without our mobile phones, our computers. Indeed, advancements in technology have already drastically changed how we live our lives. But did you know that there is one very important aspect of our lives that still uses a technology that is 140 years old? And that is with our main energy source, which is coal energy. Yes, there have also been improvements to the technology used in extracting energy from coal, but there is a limit to it because the coal that we are using is still the same coal that was first used 140 years ago.

Fortunately for us, we now have a newer, cleaner and better energy source at our disposal in the form of photovoltaic (solar panels) and solar energy. But since it is a relatively new technology, many are still not aware of the many benefits of having a solar panel installation on your home.

Read on below to know the benefits of having solar panels or a solar energy system on your home.

Solar Energy is Clean and Renewable

With climate change making more and more destructive weather events all across the world, we know that it is inevitable that we find a replacement for our current energy sources as soon as possible. The mess that we are in right now in terms of our climate situation started in the 18th century with the invention of the steam engine, which was powered by coal.

By burning coal, we disrupt our planet’s natural carbon cycle by releasing the carbon content of coal in our atmosphere in the form of Carbon Dioxide. This increases the amount of Carbon Dioxide in our atmosphere, which then traps heat from the sun and warms our entire planet.

Fortunately, solar energy is both clean and renewable.

  • Clean – solar energy does not produce any emissions of any harmful greenhouse gases in its operation. Also, by using solar panels on a solar energy system, you reduce the amount of energy that you buy from your electric grid, therefore reducing our total emissions. Even though the amount of solar energy that you will produce on your roof is very small compared to our total energy consumption, with our combined efforts, we can make a change.

  • Renewable – a renewable energy source is one that is from a fuel that is inexhaustible. Examples of these are sunlight, rain, wind, waves, tides and geothermal heat. This is very important for an energy source because it means that we do not have to worry about running out of fuel. For traditional fossil fuel energy sources such as coal, the majority of costs come from mining, refining, and transport of fuel. Since this is not a problem for renewable energy sources, they have the potential of being much cheaper.

Since we already know that we can’t forever rely on fossil fuel energy sources such as coal, replacing it with a cleaner and better energy source becomes inevitable. And since solar energy is the only energy source that can be utilized by single households, it has become one of the top choices for possible replacements for coal.

Monthly Savings

As they say: “money makes the world go round.” Because of this, just being the cleanest energy source would still not be enough to solve our energy problems. It must also be financially feasible. Fortunately, solar panel costs have continuously dropped due to improvements in photovoltaics or solar panel technology and manufacturing techniques and processes. Because of this, grid parity for solar energy has already been achieved in most countries all over the world. This basically means that solar energy has officially already been cheaper than the electricity from the grid.

Right now, solar energy systems have already become an option for homeowners that want to save up from their monthly electric bills. Since the sun shines basically anywhere in the world, there is no limitation on which houses can utilize solar energy systems effectively.

To understand in detail how you can save up from your monthly electric bills, you will have to understand a few concepts relating to solar energy systems:

Net Metering

Our electric grid has been designed only for unidirectional electricity transmission, which is from the electric grid to our houses. However, with renewable energy such as solar energy systems, homeowners are given the ability to generate power right on top of their very homes. This opens the possibility for electricity to flow from the houses back to the electric grid. To accommodate this change, a net metering scheme was created.

Net metering is a mechanism where homeowners are allowed to export or sell back energy back to the grid and even get credit for it through their monthly electric bills. Since a solar energy system generates energy when there is sunlight, there may be times when it will produce a lot of energy but the total energy consumption of your household is low. In these cases, the excess energy will then be exported back to the electric grid. Your electricity provider will then credit you with an amount that is equal to the total exported energy multiplied by the feed-in-tariff in your location.

When your solar energy system produces energy, your household appliances’ priority is to consume that energy first. If it is not enough, that will be the only time that you will buy energy from the grid. When your solar energy system produces too much energy, the excess is exported and sold back to the grid.

Self-Consumption vs. Exported Energy

Self-consumption refers to the energy from your solar energy system that you consume. On the other hand, export energy refers to the excess energy from your solar energy system that you export to or sell back to the electric grid.

This means that the energy that goes into your self-consumption will be worth the same as the price per kWh of electricity from the grid. This is because instead of buying electricity from the grid at this price, you get the energy from your solar energy system instead.

On the other hand, for some countries including the Philippines and Australia, exported energy is worth less than your self-consumption. Remember that when you export or sell energy back energy to the grid, you get credit for it through your monthly electric bills. The problem is that you get credited at a price per kWh that is lower than the total price of electricity. For example, in the Philippines, the price of electricity is around 10 pesos per kWh. However, you only get credited for around 5 pesos per kWh. There are also other countries like the US, where the exported energy is credited with the same price as the price of electricity from the grid.

This is why in sizing a solar energy system for your home, which is determining the optimum number of solar panels to be installed, it is very important to consider in detail your hourly consumption pattern to get an estimate of the self-consumption and exported energy that will result from your solar energy system.

How Much Can You Save

How much you can save depends on whether your exported energy will be credited at a price that is lower than the actual price of electricity from the grid or at the same price. In the case that it is the same price as the electricity from the grid, you can easily save 100% from your monthly electric bill by having a solar energy system that produces as much energy per month as your monthly electric consumption.

For the other case, determining how much you can save is a lot more tricky. To start, you must first evaluate your consumption patterns. Think about how many appliances do you use in the morning until the afternoon. Your energy consumption from this time during the day is the part of your total energy consumption that you can offset with your solar energy system.

However, to get a more accurate estimate that considers both self-consumption and exported energy, you should contact a solar company to do this for you. They would only require a copy of your electric bills and a description of your hourly consumption pattern. From that data, a good solar company should already be able to create a 25-year financial analysis that would show not only your expected monthly savings, but also other financial parameters such as:

  • Recommended system size and options – a good solar company should be able to recommend the size of solar energy system that is perfect for your consumption and justify this recommendation. However, they should also present you with other options in terms of system size so that you can choose the best for you, considering your budget and desired monthly savings. Take note that some solar companies may recommend a system size that is higher than optimum just to increase their sales.

  • Brand and model of solar panels and solar inverters to be used – there are lots of cheap, low-quality solar panels and solar

  • 25-year financial analysis – from there, they would be to show you how much energy it would produce and estimate the amount that would go to your self-consumption and the amount that would be exported back to the grid. This can then be used to create a financial analysis for the whole lifetime of the solar energy system (25 years), which should show the expected monthly savings for all months of the year, ROI, payback period, levelized cost of energy or LCOE and others.

  • Service package – a good solar company should also be able to explain in detail their service package for you to know their full responsibilities, most especially after the installation itself.

  • Improving Self-Consumption – to further increase the benefits that you can get from a solar energy system, you can adjust your consumption pattern to better match your solar energy system’s production. For example, you can opt to use appliances such as your washing machine, flat iron, and any other appliances during noontime. This will minimize your exported energy (which is less valuable for solar energy systems in some countries)

Increase Property Value

The newest trend in residential real estate, especially for properties in the US, is having a solar energy system installed. This is not only beneficial for the buyers, but for the sellers as well. This is because having a solar energy system has been shown to increase house value by 3-4%. Not only that, houses that already have a solar energy system installed is also now becoming more in-demand, as people are now becoming more and more aware of the benefits of having one.

Becoming an Independent Power Producer

Probably the best thing about having your own solar energy system is being an independent power producer. It means having your own solar power plant, right at the top of your very roof. Traditionally, energy has always only been generated at large power plants and controlled by big businesses or the government. However, with the advent of solar energy, normal people have also been given the power to become independent power producers. This will benefit not only yourself but also your country’s power industry as a whole:

  • For yourself – by being an independent power producer, you lessen your dependence on the electric grid. This means that you don’t anymore depend on it for 100% of your electrical consumption. When this is the case, electricity price hikes will not affect you as much. And considering that solar energy systems last for more than 25 years, imagine how many electricity price hikes would have happened for that long.

  • For your country’s power industry – did you know that in Germany, electricity prices going negative is already a common occurrence? This basically means that homeowners will be paid instead to consume energy! That is because Germany, being one of the world leaders in renewable energy, has put up so much wind and solar power plants that there are times when they produce renewable energy that is much more than the total energy demand. By having a solar energy system, you help in reducing your country’s total energy demand. The law of supply and demand states that the lower the demand, the lower the price will also be. This will eventually drive the prices lower and since energy supply is a major factor that drives a country’s economy, it becomes a small contribution to your country’s progress.


Engr. Jet Andal has 6 years of experience in the design and installation of residential, commercial and utility-scale solar PV systems. Together, and with the use of solar energy, let us help make the world a better place. You can click here to read all of our other blogs. For aspiring solar PV engineers, you can also check out his Solar PV Engineering Ebook on Amazon on this link.


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