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What is an average electric bill with solar panels?

And what can you do to reduce it?

Nobody likes paying bills. So if there’s a way to reduce your monthly bills, that’d be something everyone would want to jump on, right!? Well, you can easily reduce your energy bills and help save the planet by switching to solar. But before you take the leap, you probably want to know how much you’ll save on your utility bills. How much is an average electric bill with solar panels?

How to calculate your energy savings

Energy cost is calculated per watt. That’s how the utility company calculates your energy bill, and that’s how the cost of installing solar is calculated. 

In 2022, the average energy cost from a utility is 14.92 cents per kilowatt-hour (kWh). That means for every thousand watts your household uses, the utility company is going to charge you $0.1492. 

The average cost of a solar installation in 2022 is $2.94 per watt. Since there are a thousand watts in a kilowatt, an average five-kilowatt solar system will run about $11,000.

Now, that might seem like a huge price difference (and it is), but it’s important to think of solar as an investment, not a cost. When you install a solar system, you’ll generate power every month that you won’t have to pay for, and eventually you’ll get a hefty return on your investment.

Electric bill before solar panels

If you want to see how much you’ll save with solar, you first need to calculate your standard utility energy bill. Just take your utility’s rate and multiply it by the amount of energy you use:

Utility rate (kWh) x Household usage (kWh) = Energy cost

For example, the average U.S. home uses 893 kWh per month.
Multiply that by the average rate of 14.92 cents per kWh and you get an average energy bill of $133 per month.

Of course, energy costs vary per state, so your bill might look slightly different from the national average.

Now that you know what the average energy bill without solar looks like, let’s see what an average electric bill with solar panels might look like.

Woman Budgeting Her Bills

Electric bill with solar panels

Your energy bill with solar panels will largely depend on the size of the system you install. The larger and more powerful the system, the lower your energy bills will be! 

To calculate your energy savings, just follow this formula:

Solar production (kWh) x Billing rate from utility (kWh) = Your energy savings

If you install a five-kilowatt solar system on your home, your formula would look something like this:

5 kWh x 14.92 = $74.60

Now, compare your energy savings to your regular utility bill. Since the average utility bill is $133 and you’re saving $74.60 per month by going solar, your average electric bill with solar panels will be $58.40. That’s less than half of what you were paying every month!

It is possible to make your utility bill negative and earn money every month from the utility company with net metering

For example, if you decided to install a larger ten-kilowatt system, your energy savings would be $149.20 per month. Since your pre-solar energy bill was $133, your electric bill with solar panels would be -$16.20 per month. That’s right, the utility company would pay you $16 every month!

Reduce your electric bill with solar alternatives

It sounds great to turn your utility bill into a paycheck, but it can be quite expensive to install solar on your home or property. The average cost of a solar installation in the U.S. is around $20,498! If you don’t have the budget upfront to install expensive panels, there are other solar options to help you decrease your utility bills without taking out a second mortgage.

One of the most popular solar alternatives is community solar. Instead of paying tens of thousands of dollars to install solar on your home, many people in the area chip in a small amount (typically via monthly subscription) to build a solar farm off-site in a suitable location. 

Community solar is a great way to go solar even if you rent!

As the solar farm generates electricity, it sends it back to the power grid, and all the subscribers get a credit on their utility bills for being a part of the community solar project.

While community solar might not completely erase your regular monthly electricity bill, it can reduce it by between 10-25%. For example, if the average utility bill is $133, you could reduce it to around $99 per month — all without the massive upfront installation costs!

If you’re interested in seeing if community solar is right for you, check out some of the resources on And when you’re ready, fill out our form to find suitable community solar projects near you. 

Even if you don’t have the budget for a massive solar installation, don’t own your property, or live in an apartment, solar power is within reach. Don’t pay more for electricity. Reduce your energy bills and keep more money in your pocket with community solar.

Find out if there’s a community solar project near you and see how much you can save on your energy bills.

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