Can You Save Money by Using Solar Panels Instead of Paying for Electricity from a Utility Company?

The short answer is yes. If you have solar panels, transitioning to an off-grid solar system can indeed save you money in the long run. This guide will walk you through the process and help you understand the necessary components and considerations involved in building your own solar system.

Transitioning to an Off-Grid Solar System

The move to an off-grid lifestyle, powered by solar panels, is not just about having the panels. It requires careful planning and an understanding of the necessary components to make your system work effectively. Here’s a breakdown of the key elements you’ll need:

1. Panels

Evaluating your power needs is the first step. This includes adding up the watts used by all your appliances and devices. Multiplier your total amps by 2 for air conditioning, microwaves, toasters, deep well pumps, furnace motors, and refrigerators. Once you’ve determined your total watts, choose an inverter to supply that amount consistently. A 12kw inverter, for instance, would produce 9600 usable watts after accounting for a 18-20% power conversion loss.

2. Combiner Box

Use a combiner box to connect multiple solar panel arrays, ensuring they all work efficiently together.

3. Solar Charge Controller

Choose between PWM (Pulse Width Modulation) and MPPT (Maximum Power Point Tracking). MPPT controllers are generally more efficient and suitable for systems with many panels or panels that vary in performance.

4. Batteries

Without batteries, your system won’t generate power during the night or on cloudy days. There are three primary types of batteries:

AGM (Absorbed Glass Mat) batteries Gel batteries Lithium-ion batteries

Each has its advantages and disadvantages, with lithium-ion being the most efficient but also the most expensive. AGM and gel batteries, while less efficient, are more affordable.

5. Inverter

An inverter is necessary to convert direct current (DC) from the batteries into alternating current (AC), which powers your home. Ensure your selected inverter is powerful enough to handle your total wattage requirements.

Financial Considerations

Living off the grid can be financially advantageous, especially if you can occasionally sell excess power back to the grid. However, the cost of batteries still poses a significant barrier. Currently, the high cost of batteries makes it a longer-term investment. In many cases, you might opt to sell excess power to the utility company during peak production periods and buy back during off-peak hours.

Real-Life Examples

Consider the Motorway Service Centre in Drury, New Zealand, just south of Auckland. This facility has been running on solar power for years, demonstrating the feasibility and reliability of solar energy in an off-grid setting. The centre features solar panels on its roofs, with battery storage to supply power when the sun isn’t shining, making it an effective and stable solution.

Similar systems are in place for some isolated houses, which rely on solar power to ensure continuous and reliable electricity. Despite the high cost of batteries, these installations showcase the practicality and efficiency of using solar panels to generate and store electricity.

In conclusion: Transitioning to an off-grid lifestyle powered by solar panels can be a smart financial move, especially if you find yourself in situations where you heavily rely on the grid and pay high electricity rates. While the high cost of batteries can be a deterrent, the potential savings on your utility bills can make the investment worthwhile in the long run. Whether you’re looking to reduce your environmental impact or save money, a solar-powered setup can be a viable solution.