Select Page

The majority of people install solar panels on their homes in order to save money. The quantity of energy you create vs the amount of energy you consume is measured by solar offset. You might think that using solar power to meet 100 percent of your energy needs will save you the most money, but it’s more complicated than that.

When you use electricity generated by your solar energy system instead of the grid, you save money on your monthly utility bill. There are instances, though, when you produce more electricity than you require. There are instances when the amount of electricity generated by your solar panels is less than the amount of energy you require. These conflicting amounts of electricity from both your solar panels and the grid create a notion called solar offset when assessed over a year. 

This post will explain what solar offset is, how to calculate it, what the ideal solar offset is, and how to use the notion to reduce your monthly energy bills.

Definition of Solar Offset 

The annual difference between the quantity of power generated by your solar panels and the amount of electricity used by your home is known as solar offset. It’s usually given as a percentage. 

In an ideal world, your home would consume the same amount of energy that your solar panels produce, but realistically, this will never be the case. Based on your previous energy consumption habits, you can still design a system that gets as near to 100% as possible.

Consider the following scenario: 

  • Your home consumes more electricity than your solar panels generate during some months (typically in the winter). This means you’ll have to use electricity from the grid. 
  • You create excess solar energy that your home cannot use during other months (typically the summer). You have the option of sending the electricity back to the grid or storing it in solar batteries. 

As a result, solar offset provides a technique to quantify this imbalance so you may better understand your electricity output and consumption.

Calculating Solar Energy Offsets 

The formula is straightforward: 

Solar Energy Offset = Annual Solar Electricity Generated in Kilowatt-Hours (kWh) / Annual Solar Electricity Consumed in Kilowatt-Hours (kWh). 

After you’ve completed this calculation, multiply the result by 100 to convert it to a percentage. For example: 1 = 100%, .5 = 50%, and 1.5 = 150%

To put it another way, the “ideal” solar energy offset is 1, or 100%. In other words, your home consumed the same amount of electricity that your solar panels did over the course of a year.

Consider the following scenario: 

  • In a year, your solar panels produced 9,420 kilowatt-hours (kWh) of electricity. 
  • In a year, your home utilised 8,640 kWh. 
  • 9,420 kWh / 8,640 kWh Equals 1.090, or 109 percent, solar offset. 

It’s simple to do the computations using previous data. If you have solar panels, you already know how much electricity your home consumes and how much electricity your solar panels generate. When you don’t have solar panels on your roof and want to estimate how many you’ll need to attain a target solar offset, things get tough.

What Solar Power Offset Do I Require? 

Solar panels are frequently installed by homeowners in order to reduce their utility expenses as much as possible. You could believe that by creating a solar power system with a 100 percent solar power offset, you can completely eliminate your energy expense (aside from charges like fixed fees that you will always pay to remain connected to the grid).

However, due to the way net metering works in many locations, a 100 percent offset solar system may still leave you owing the utility for part of the power you consumed. Solar offset does not account for the amount you pay for power from the grid or the amount of credit you obtain for net metering because it assesses the balance of output and consumption over a year. 

Consider the following scenario: you use 20 units of electricity each month and there are only two seasons: winter and summer.

Sunny days in the summer mean your solar panels create 30 units of electricity. Because you only need 20 units, you can return the extra 10 to the grid and receive credit. However, the grid may only credit you 50% of the time, so the 10 units you return may only get you 5 credits. 

The shorter days of winter mean that your solar panels only produce 10 units of electricity. You have 5 credits each month left over from the summer, and you’ve generated 10 units (for a total of 15), but you still need 20. As a result, you must still purchase 5 units from the utility.

Because you consumed 240 units (12 months x 20 units) and produced 240 units ((6 months x 10 units) + (6 months x 30 units), your solar offset is 100%. To meet your demands, you still needed to purchase 30 units from the utility (6 months x 5 units). 

As a result, in order to maximise savings, we occasionally recommend a solar offset that is greater than 100%. We may recommend a solar offset that is less than 100 percent in some circumstances since it will save you money overall. It all relies on the cost of solar, your local utility’s net metering regulation, and other considerations.