Adding solar panels and switching rate plans can lower your American Electric Power electric bill
Updated: October 22, 2020Installing solar panels can help reduce your AEP bill, thanks to Florida’s sunshine and the company’s net metering program! Combined with the 30% solar tax credit, KUA customers can see great savings when they switch to solar!
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Solar panel cost calculator
Are solar panels worth it for American Electric Power customers?
Probably. With the Federal solar tax credit, and available Texas solar property tax exemption, home solar panels are an investment worthy of your careful consideration as an American Electric Power customer. When signing up with a retail electricity provider, look for one which offers solar net metering rates. Then you can also get some credit on your power bill for the excess solar electricity your panels produce which you can’t use onsite. Your credits, while potentially accruing at a lower rate than you pay for electricity, will roll over to the next month’s bill.
Does American Electric Power offer net metering credits for exported solar power?
AEP Texas is what's known as a transmission and distribution utility. They run the grid and deliver your power, but the energy you buy comes from a retail electric provider (REP).
The rates you can get for excess solar power will vary based on which REP you choose, and there are several who currently offer programs very much like net metering, where you earn a 1-to-1 credit for every kilowatt-hour you send to the grid that reduces your bill based on the retail price.
When you speak to solar companies in your area, be sure to ask which REP to choose to getthe most value out of your solar panels.
What incentives, tax credits, and rebates are available to AEP customers for installing solar?
The biggest financial incentive for solar homeowners is the 30% federal solar tax credit. The tax credit equals 30% of the solar installation costs and directly reduces your federal income tax liability.
Some states and local governments offer additional solar incentives. These incentives include state tax credits, rebates, or performance-based incentives like Solar Renewable Energy Credits (SRECs). The best part is that these local incentives can be used in addition to the federal tax credit!
Here is every incentive you may be eligible for as a AEP customer:
Table 1: Incentives
| Upfront Incentives | Value* |
|---|---|
| Residential Clean Energy Tax Credit (Federal) | -$6,847 |
|
Renewable Energy Property Tax Incentive
(State)
100% of cost of solar system not included in property taxes. |
Varies |
| TOTAL | -$6,847 |
*Based on 9.76 kW system, average installation cost $22,824
How much does installing solar panels save the average American Electric Power residential customer?
If you input the details for a AEP customer with a power bill of $210 per month into the best online solar panels calculator, it tells you that you need a 9.76 kW solar system that will produce 13,719 kWh per year and that this system will return the owner a $55,623 profit after repaying the cost of the system.
The solar savings possible for you as an AEP customer will depend on the amount of electricity you use and the cost of the solar system you buy. Savings also vary based on the direction of your roof or any shading of your roof that affects output.
Here is a monthly and lifetime solar savings estimate for the same relatively typical AEP customer with a $210 per month electric bill prior to solar and who installs a 9.76 kW solar system.
How much do residential solar panels cost for AEP customers?
Showing data for:
Prices based on a 9.8kW system, after 30% federal tax credit
Solar prices near you
Net profit (savings less system cost)
$58,301-$71,257
Payback period
4.5-5.5 years
Recommended size for the selected utility bill
9.8kW
Solar panel cost calculator
Detailed information about your estimate
Table 2: Estimate details
|
System Size (for 100% usage offset) 9.76 kW |
|
Annual Power Generation 13,719 kWh |
|
Pay-back time (assuming Cash purchase) 7.7 Years |
|
Internal Rate of Return (IRR) on Investment 9.8% |
|
Gross cost $22,824 |
|
Total Upfront Incentives and Rebates -$5,935 |
|
Net Cost of System after rebates and incentives $16,892 |
|
Total Cost of Utility Power Avoided over 25 years $72,515 |
Please note that the investment return figures do not include the possible increase in property value.
What are the environmental impacts of American Electric Power customers installing solar panels?
While most homeowners decide to install solar panels because of financial savings over time, the environmental impacts of this choice are the primary motive for others. Here is a breakdown of the environmental benefits from an American Electric Power customer installing a 9.76 kW solar system on their property:
A solar system generating 13,719 kWh per year will save you money AND make the world a nicer place
Saves you
$2,225
on average per year
Reduces CO2 emissions
6.79
tons per year
Equivalent to planting
48 trees
per year
Equivalent to driving
15,023 mi
less per year
CO2 emissions calculation based on the electricity generation and emissions data for your state in 2015 as published by the US Government Energy Information Administration.
What factors affect the price of solar panels for American Electric Power customers?
The cost of installing solar panels will vary with brands of solar panels and inverters you choose and also the installation company you choose to install them.
It is common to see really good systems, using quality brands of equipment, being sold for around $2.34 per watt or $16,892 for a standard 9.76 kW solar system after the customer claims the 30% federal solar tax credit.