Note: We installed a whole-house solar power system in July because in our remote location we suffer from an average of two power-outages per week. This post is based on my experience after owning our whole-house solar power system for about five months, including through a three-week grid-down event during Hurricane Helene.
I’m sure you can imagine how useful solar power can be when the grid goes down, but at what cost, and is it worth it? I provide some real-world information below to help you make that decision.
The Economics of Solar Power
The days of making money by throwing a few solar panels on your roof are behind us. Most electrical utilities have done away with programs that let you sell power back to the grid at the same price they sell it to you. This will vary by state and utility, but many states have changed the rules, minimizing the economic advantage of producing your own power. As a result, large solar power installers in California and Texas have gone out of business in 2024 because they can no longer sustain their business model.
If they can’t make money, chances are, neither can you. My advice up front: Don’t look at solar as a way to get-rich quick… or ever.
Even if you can’t make money, you can still save money with solar power. The more your utility charges you per kilowatt hour (kWh), the more you can save. Counting riders and other fees, our electrical costs are about 17 cents per kWh. Our average power usage was about 900 kWh per month, which is darn close to the national average. Do the math and you’ll see that we paid an average of $153 a month for power.
After installing the solar power system, we had bills of $1.67 (August), $-1.21 (October), and most recently, $17.24 (November). (This is leaving out the September bill when half our panels were not working and we were hit with Helene.) Over those three months, we saved $441.30. If we extrapolate that over the course of a year, we would save $1,765 annually. I expect our cost of electricity will continue to rise, which means my savings should also increase.
What savings you can realize will depend on several variables, including the amount of power you can produce, the size of your batteries, how much power you consume per day, whether your utility has time-of-use rates, your latitude and longitude, your weather, what rebates or other programs your state or utility has that can lower your upfront costs, and what kind of net metering agreement your utility offers.
Net Metering
You can plug an appliance or lamp into an outlet and use electricity from the grid, but you can’t send electricity from your solar panels back to the grid unless you have a net metering agreement with your utility. These agreements vary by state and are usually approved by your state’s utility commission. While your utility may give you a choice of multiple plans, you can’t change the specifics of a plan.
I have come across three basic types of net metering agreements.
True Net Metering
The utility buys and sells power to you at the same cost. So if you use 500 kWh in a month and sell them 400 kWh, you only pay for 100, the difference. Likewise, if you sell them 500 kWh and use only 400 kWh, they pay you the difference (although many times this surplus carries over for a month or a few months and can be offset by your later consumption). This is the original plan that allowed people to make money and pay off their system. This is the best deal for the homeowner, but these plans are becoming scarce.
Offset Net Metering
Next we have a version in which you have net metering for every kWh you use, but not for the difference. So, if you sold them 500 kWH and used 400 kWh from the grid, you would not pay for the 400 kWh because the power you sent them would offset it. Instead of paying you for the 100 kWh extra at the same rate, they would pay you wholesale rates. You still save money but won’t make as much. You might make a few bucks in the summer when there is lots of sun, but the emphasis is on “few” because you can’t make much money at 3.5 to 5 cents per kWh. I consider this a plan that is fair to both the consumer and the utility.
Wholesale Net Metering
In this method, they buy electricity from you at a wholesale or lower rate. So if you use 500 kWH from the grid and sell them 500 kWh, it doesn’t fully offset. You still end up paying your rate minus the wholesale cost of your consumption. This is the worst possible plan, unless you buy batteries.
With batteries, if you make and consume 500 kWh while the sun shines and also store an additional 500 kWh for use at night and when it is cloudy, you won’t need to buy much electricity at all. So you don’t make money, but you should have a significantly lower power bill. Batteries are expensive, so your capital costs will be higher. This plan may become more reasonable as battery prices drop.
Time-of-Use
As it becomes tougher to meet electrical demand, utilities are moving to time-of-use schedules where you pay more for electricity during the hours when it is in demand and less when it isn’t. This is to incentivize people to charge their cars when electrical demand is low and to discourage people from running the AC or clothes dryer when demand is high. Depending on where you live, the rates and times can change seasonally. Usually, higher rates are before people go to work and after 5 p.m., when they are arriving home. In the summer, they will include peak cooling times.
If your solar power system has batteries and a time-of-use setting, you can program it to provide you with power from the sun or batteries when costs are high and buy grid power when costs are low. This won’t make you any money, but it will reduce your electric bill.
Bill Savings
Even if you choose not to hook your system up to the utility and sell power back to them, every kilowatt you generate is one you don’t have to buy. Depending on where you live, this is a savings of 12 to 24 cents per kilowatt. Generate and store 500 kWh, and you save $60 to $120. Generate and store 1,500 kWh for “self consumption,” and you save $180 to $360.
Even if you save an average of $300 a month, or $3,600 a year, it is going to take a couple of decades to pay off your investment. This brings us to my rules for solar power.
Rules for Solar Power
Rule 1: Do your research before you buy. Talk to your utility. See what kind of net metering or other agreement they offer. Get multiple quotes for three different installers. Understand what they offer and why the three quotes differ.
Rule 2: Don’t buy solar power to make money. It is not an investment with a high ROI.
Rule 3: Don’t believe anyone who tells you your bill will be zero or claims you will pay off your investment in X years. No one can predict the future and utility rules change.
Rule 4: Don’t lease your equipment or borrow to pay for it. The financing costs will make the economics of solar power even worse and can cause problems if you try to sell your house.
Rule 5: Only install solar if you own your house and plan to stay there at least five years. Ten or twenty years is better.
Rule 6: Don’t invest in solar in your principal residence if you plan to bug out.
Putting solar power on your house won’t do you much good in a disaster if you leave it behind to bug out. You would be better off buying a larger solar generator and enough solar panels to generate 800 or more watts per hour of sunshine. Then you can pack it into your bugout vehicle or stash it at your bugout location. Alternatively, if your bugout location is a small cabin or an RV, you could install a small solar system there.
One of our neighbors had solar in their RV, which was parked behind their house. Tt allowed them to take a hot shower and use some electricity.
If, however, you plan on bugging in and staying home, then a whole-house solar power system can have a huge benefit during the disaster and the post-disaster recovery.
Rule 7: If you buy a portable solar power system or a so-called “solar generator,” make sure it can grow with you.
For example, get a system that can take an expansion battery and can accept more solar panels than you plan to buy. Modular systems that can be enhanced with new modules will be the best investment because you will probably want more storage and panels than you think.
You also want a solar generator that can rapidly recharge from a generator or house current. If there are rotating outages because of electricity shortages in the future, you want to recharge your battery pack as fast as possible during those hours when the power is on.
Rule 8: Some solar power is better than no solar power, but in most cases, more is better.
The more electricity you can produce, the longer you can run your refrigerator, freezer and other must-have items. Keep in mind there is less sunshine in the winter and size your unit accordingly. It’s easy to produce enough power during the long days of May through August. Doing so from November through February when the sun sets early is more challenging.
Likewise, the more power you can store, the better. You never know when you will get three days in a row of rain and fog, or five days of snow. Of course, this depends on where you live, but if you plan to survive on solar, you need batteries that will last through a worst-case scenario or a generator to recharge them.
Conclusion
Whether you invest in solar power because you want to reduce emissions, be more environmentally friendly, or survive during a long-term grid-down scenario is up to you. A good system will accomplish it all, but it won’t come cheap.
In my opinion, solar power is great for preppers and a must-have for off-grid living, but it is not better than having food and water. Preppers should invest in their long-term food storage and water storage and purification systems before they spend tens of thousands of dollars on solar power. Solar power is not cheap and will not make you money, although if you live with a system for fifteen or twenty years, you might break even. (Please refer back to rule 3.)
