# How do you calculate solar savings?

29 September
2023

With solar energy, its all about the savings. The main selling point for a solar energy system is that the savings you incur on your electricity bills will not only pay for the system itself, but in the long run, it will save you a lot. So, with all that chatter about savings and save big and whatnot, how do you actually calculate solar RoI? How do you calculate solar savings so that you may figure out just how much of the claims are really concrete and not just jingo from big solar to sell more solar? Today, we’ll look into it.

Calculating the return on investment (RoI) on solar is simple: calculate the cost of the system plus the installation, then check the savings incurred. Multiply it to the age of the system (usually around 20 years) and you’ve got the solar savings over the life of the solar energy system. But how do you calculate the solar savings of your own solar energy system. Lets get into it.

## How do you calculate solar RoI?

Solar savings can be calculated by using the return-on-investment method, wherein the cost of the solar energy system and the installation is considered an initial investment, and the savings incurred over time is the RoI. Let’s look at it in more detail and understand how do you calculate solar RoI.

The simple formula for calculating your solar savings is this: first up, add the cost of the solar energy system and the installation and then divide the cost from the potential savings incurred from the solar energy system; this will give you the payback period for the solar panels and the system. As for the solar savings, simply take the output of the system and your usage or consumption. This can usually be found on your electricity bills; how many units of electricity have been consumed in a month. To calculate solar savings, you will need an average of the consumption over a year; since the system will operate and generate electricity for you all year long, the consumption needs to be divided as such.

Once you have both, simply calculate the amount of the units that have been generated by the system and covered by the decreases in the electricity bills. This will give you your actual solar savings incurred over a period of a year, and you can then calculate it for the years forward using the same formula, accounting for things like weather changes, loss of power over time for solar panels and any other environmental factors that might come into play.

## Solar savings: why should you calculate them?

Again, solar energy is all about savings. You get the amount you invested not in the form of cold, hard cash or in the form of stocks, but rather in the form of savings that are incurred. For that, to ensure that your solar energy system actually does deliver on its promises, you need to calculate the solar savings. This will give you an idea into how much energy is the system actually generating, and how long will it be before you hit the breakeven period (where the system has essentially paid for itself) and the system starts generating you some free electricity, now that the system has been paid off.

## The role of net metering in solar savings

Net metering is a feature of solar energy systems, where excess electricity generated by the solar energy system is fed back into the grid, thereby crediting the consumer with units against their consumption from the electricity supply company. This means that aside from the excess electricity that was actually consumed (passively saving you a lot in terms of electricity bills), now you have a credit line with your local distribution company, which will further lower your electricity bills. Therefore, net metering can do wonders for solar savings, and it is one of the primary reasons why people prefer hybrid solar energy systems, since they allow for net metering and the maximum solar savings that can be made possible.

## Savings with the best solar company in Pakistan

If solar is all about savings, then the most you can get out of solar is with a company that not only understands solar itself but implements in a way that solar savings are maximized, always. Beacon Energy, with its revolutionary line of INTRIX solar energy systems, is one of Pakistan’s foremost solar companies that have perfected the science of solar energy, and are revolutionizing the spread of solar energy across Pakistan, promoting energy reliability and solar savings for everybody.