Rising Energy Costs Have Most Americans Concerned. Solar Panels Might Be the Answer

It's not just the heat that's breaking records this summer: Home energy bills have also been on a rapid pace of increase this year.

In fact, a recent CNET Money survey found that 78% of US adults are concerned about their home energy costs this summer.

"Utility bills going up the way they are become a greater portion of someone's income, and it is concerning," said Sequoya Cross, vice president of energy storage at Briggs & Stratton Energy Solutions.

But Americans aren't helpless in the face of these skyrocketing energy costs. They have options to reduce their energy use -- and their reliance on the grid altogether. Installing solar panels is one way to do this and might be more cost-effective than ever as electricity rates continue to climb.

Here's what you should think about if you're eyeing a solar array as a solution to those eye-popping energy bills.

Why home energy costs have Americans worried

It's obvious the vast majority of Americans are pretty unsettled by their utility bills. Out of the surveyed group, 44% say they're just as worried this year as they were last year, and 34% of respondents say they're more worried this year compared with last. Only 6% of those surveyed said they're less concerned about energy costs this year.

The survey also revealed that most Americans, regardless of location, believe energy costs are affecting their household finances. 

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So there's more than enough worry to go around. But why?

"A lot of people are concerned because costs are rising pretty dramatically, just in the past couple years," said Gilbert Michaud, assistant professor of environmental policy at the School of Environmental Sustainability at Loyola University Chicago.

Historically, utility rates increase about 2% per year. But that pace of increase has been intensifying since 2020. The economic disruptions of COVID and the war in Ukraine haven't helped, nor has general inflation, Michaud said. The latest CPI report from the Bureau of Labor and Statistics shows electricity costs are up 4.4% over the last 12 months. For comparison, the same report shows overall inflation is up 3% year over year. 

It's not isolated to a certain part of the county, and CNET's survey data shows pretty consistent concern about these rising rates no matter the region.

"Everyone is dealing with this, and there's ways to get around it, but there's also ways where it's kind of inevitable," Michaud said.

Another CNET survey from May shows that utility costs has the fourth highest shock value -- with 41% of surveyed US adults saying their utility costs gave them "sticker shock" -- behind groceries, gasoline and dining out. 

The answer to reducing your home energy costs might be solar panels

Installing a home solar array is definitely something to consider if you want to shrink your monthly energy costs.

"Solar has always been one of those ways to reduce your utility bill," Cross said.

The way it works is pretty simple: When solar panels are soaking up the sun during the day, they send energy into your home that you can use, instead of drawing power from the grid. That reduces your usage charges from the utility company.

If your panels are generating more electricity than you need, you can often send it back to the grid and actually get paid by the utility company for that excess power. This is an arrangement called net-metering, and every state and utility company has slightly different policies around it, if they offer it at all. 

Of course, the solar panels themselves aren't free and do require an upfront investment in the thousands of dollars. You can pay for that in cash or with a loan. Or you can lease the solar panels from an installer and totally eliminate a down payment but contribute monthly to the cost of the panels.

Even with the installation costs, solar can still be a net financial gain. "For a lot of people it makes a lot of sense because you can reduce your monthly costs," Michaud said.

One way to get more return on the investment is to pair solar panels with a home battery. This allows you to store excess energy you don't use during the day, and then deploy it at night when you're home (and when utility rates are often higher).

"Batteries really help you leverage your solar production," Cross said.

Do solar panels make sense for you?

This all sounds great, but even solar's biggest boosters will tell you that solar doesn't make sense for everyone.

First off, you need a roof that can fit panels and is situated to soak up enough sunlight. A solar installer can help you understand whether your home meets that criteria.

But even if your roof can technically handle solar panels, you'll want to run some numbers. Start by looking at your utility bill to see how much electricity you use in an average month. Then compare that with how much you could offset that with solar panels. Again, a solar installer can help you run those estimates.

"Two people living in identical homes can have drastically different power needs," Cross said.

You also want to consider your state and local policies. Can you take advantage of net-metering? Does your state offer any financial incentives to offset the cost of installing solar?

"The financing of this can look extremely different based on where you live," Michaud said. (And don't forget about the hefty federal tax credits available.)

Sometimes, solar simply isn't the best solution for you. Improving your home's insulation or installing new windows, for example, might give you a better bang for the buck. "Solar is more sexy, but energy efficiency can be more cost-effective," Michaud said.

How to get the best deal on solar panels

If you decide to go ahead and install a solar array, you want to be careful to get a good price on the project.

Michaud and Cross recommend contacting a few different installers for estimates. Also ask around for neighbors who have solar to see if they'd recommend their contractor. 

You can also look online for reviews and complaints for any given installer and check to see if they're licensed or certified, which usually means they're more reliable. 

You can check out CNET's curated list of best solar companies here. 

At the end of the day, read the fine print and don't sign up for anything you don't feel fully comfortable with.