“How do I calculate the ROI of solar panels?” is among the most common questions we’re asked. It’s no surprise; solar panels are a significant home improvement investment, and you want to be sure you’re investing wisely.
Calculating the ROI of solar panels isn’t all that difficult. It involves assessing your current electric bills, factoring in the cost of solar panel installation, and determining how much you’ll save on your electric bill each month.
The first step is understanding your electric bill.
Understanding Your PEPCO Electric Bill in Maryland
If you live in Maryland and PEPCO is your utility provider, your electric bill should be a little easier to understand thanks to a new design rolled out by PEPCO in March.
Information about your energy usage is found on Page 2 of your PEPCO bill. The section titled “Details of Your Electric Charges” includes your rate schedule and meter information, such as meter reading dates, energy consumption, and energy type. It also informs you of your next scheduled meter reading.
In the upper right corner of Page 2, you’ll find a section titled “Electric Summary.” This is a quick and easy way to find your electric charges for the month. You’ll need to know how much electricity you use each month, on average, to evaluate the ROI of solar panels for your home.
PEPCO can view a video guide to understanding your PEPCO bill here. View a sample PEPCO bill here [PDF].
Understanding Your BGE Electric Bill
The other major utility company in Maryland is BGE. Your BGE bill provides detailed information about your home’s energy use. The summary section on the left hand side of your BGE bill includes information about current charges, including gas, electric, and service contracts.
On the right hand side, you’ll find your electric usage profile and gas usage profile. While both are important for understanding your home’s total energy use, the information about your electricity usage is most helpful for determining how much money solar panels can save you.
Page 2 includes a section titled “Electric Details.” This is where you’ll find information about your electric rate schedule, meter readings, and how much electricity you used during this billing period.
You can find a sample BGE utility bill here. BGE also provides a guide to help you understand your BGE bill.
Understanding Your Delmarva Power Bill
If you’re a Delmarva Power customer, you’ve probably noticed the utility company has recently made a number of changes to your monthly statement, making it easier to understand your power bill than ever before. Here’s a look at the key sections of a typical Delmarva bill:
- The payment coupon – This is on top of the first page. It states your name, address, amount due, and due date.
- Electric delivery summary – This is on the bottom of the first page. It states your mailing address, account number, the billing period for which you’re being charged, the address where the electricity is hooked up, and the total amount charged.
- Electric meter information – You’ll find this on top of the second page. It shows the information from your meter and the approximate date when it will be read again.
- Electric delivery charges – This is found in the center of the second page. It shows the rate at which you’re billed, the current seasonal rate, and the rate schedule that applies to your account. It also includes a breakdown of several special charges. We’ll look at how those work in a minute.
- The bottom of the second page shows a chart of your monthly power usage over the past year, to help you manage your utility expenses.
The “Special Charges” section of your Delmarva Power statement contains a lot of information. Let’s look at each of those areas:
- Delivery charges – This reflects the charges you pay to have the electricity sent from the plant to your home or business. It’s one of the fees that persons who use solar power don’t have to worry about.
- Customer charge – This shows the flat rate that you’re charged simply to keep the account active.
- Distribution charge – This shows the cost associated with receiving power from your local substation.
- Universal service program – This money goes into a fund to help persons with financial difficulties to pay their electric bills.
- MD franchise tax – The utility collects this tax for the state government.
- Environmental surcharge – This charge goes to fund various environmental projects within Maryland.
- Total electric delivery charges – This is simply a subtotal of the amount owed.
- Supply charges – This section shows how much you might save if you purchased your electricity from other suppliers. This section is especially important if you’re considering switching to solar power, as it can give you an idea of the savings you might realize. Learn more about the costs of residential solar power.
Other Electricity Providers in Maryland
Thanks to the restructuring of the electric utility industry, Maryland homeowners can choose the electricity supplier that best fits their needs. PEPCO and BGE may be among the largest electricity suppliers in Maryland, but there are plenty of others. Click here for a list of electricity suppliers serving Maryland.
When calculating your solar panel ROI, the key figures to look for on your electric bill are your electric rate (sometimes called a rate schedule), your total energy usage, and your total electricity charges and electric bill amount. We’ll use these figures to calculate your potential utility bill savings from solar power.
Next Step: Evaluate the Cost of Solar Panel Installation
In the next blog post in our series on the ROI of solar panels, we’ll explain how to determine the installed cost of solar panels. In the meantime, you can request a FREE evaluation from our solar installers to find out if solar is right for your Maryland home.