Were you aware that the average residential electricity prices could rise by 3.9% this 2022? If that comes to pass, electricity could cost 14.26 cents per kilowatt-hour (kWh), up from last year’s 13.72 cents/kWh.
So if your household uses about 11,000 kWh a year, you’d pay approximately $1,568.60 for electricity alone. Fortunately, you can recoup those costs (and some) by selling power back to the grid.
Interested? Then keep reading, as we’ll tell you how to cut your utility bills and sell your solar power in this guide.
How to Make Money Selling Solar Power
You can make money selling solar power back to the grid through the energy savings and credits you get. Hopefully, you live in one of the 38 US states with a net metering policy to qualify for this incentive.
Net metering is a billing system that credits back solar energy system owners with a net meter. That specialized meter runs backward when a system owner sends back power to the grid.
For example, suppose your solar power makes more electricity than you need during the day. That excess energy then gets sent to the grid to supply the needs of other consumers. Your net meter runs backward as long as the system creates more power than you use.
How Net Metering Works
Suppose your total energy consumption reached 900 kWh by the end of the month. However, your system generated 950 kWh, 50 of which got sent back to the grid. Your electricity provider should then credit you back for that 50 kWh.
In that case, you should see a negative amount on your bill, as you have a credit for the 50 kWh you sent to the grid. So if your electricity rate is 14.26 cents per kWh, your credits should be $7.13.
That may seem tiny but remember: your solar panels already saved you $128.34 for the first 900 kWh it generated. If this plays out throughout the year, you can keep the $1,540.08 ($128.34 x 12 months). You also have $85.56 worth of credits ($7.13 x 12 months) that you can rely on during less sunny days.
Getting Maximum Return on Your Investment
Don’t forget that solar companies offer incentives to their customers, such as rebates. You might even snag an 18 months free promotional deal.
However, the most significant savings you can get is from the federal solar ITC. ITC stands for “investment tax credit,” and owning a solar energy system is one of the ways to qualify for it. With this incentive, you can deduct up to 26% of the cost of your system from the federal income taxes you owe.
The federal solar ITC phases down to 22% in 2023, so it’s best to act fast if you want to get the 26% credit.
Start Selling Power Back to the Grid ASAP
As you can see, you can make extra money through the savings you get by selling power back to the grid. The $7 credit/month example above may seem small, but that adds up to hundreds of dollars in savings over the years.
So, why not consider making the switch to solar power ASAP? The sooner you do, the sooner you can save money with clean, renewable energy.
Are you looking for other guides on finance or lifestyle? Then feel free to check out more of our blog posts now!
