Although many commentators, bloggers, and armchair pundits argue that solar power is only cost-effective in sunny locations, the fact is that just isn’t true. While the argument that more sun means more electricity means more savings may seem tenable at first, it isn’t consistent with what’s happening in today’s solar market. New Jersey certainly isn’t mounting a strong challenge to become the new “Sunshine State,” and yet, it’s installed more solar than any other state in the U.S. On the global stage, high-latitude Germany is the clear leader in solar installations. An endless summer is no longer a requirement for solar power success.
Top 25 Cities That Benefit From Solar Energy Installations
Check out the data we compiled for a geographically-diverse smattering of 25 major U.S. cities. Using PV Watts – a tool that estimates the amount of energy a solar power system will generate anywhere in the United States – we gathered the key information for each city that illustrates the annual savings benefits possible across the country. [cost of electricity, average annual solar radiation, estimated electricity output of a 5 kW system (assuming an 80% derate factor, 180 degree azimuth, and array tilt equal to the city’s latitude), annual electric bill savings (cost of electricity X electricity produced), and production ratio (electricity produced/size of system)]. The following table shows the results of our calculations, sorted by annual savings from highest to lowest:
This is a lot of data to sift through, but here are some key take-aways:
1. Greater electricity costs mean greater savings, regardless of location
There is a strong correlation between your electricity costs and the savings you can expect from switching to solar. The four cities with the highest estimated annual savings are also the four cities with the highest electricity costs. So, even if you don’t live in a sunny location, if your electric rates are higher, you can save large amounts of money by switching to solar.
Solar Panels Work Just as Well in Cloudy Cities
For instance, New York receives less sun than 18 of the 25 cities we looked at, but with the highest electricity costs (17.5¢ per kWh), its residents stand to save the most from installing solar panels. Seattle is at the bottom of the list in terms of possible savings which seems to support the argument about not having enough sun diminishing the value of going solar since it is second to last in terms of sunlight levels. But this is misleading. Seattle doesn’t get much sun, but the real issue is that its electricity rates are low. If we were to raise Seattle’s rates to New York levels, its benefits and savings would skyrocket to over $850 which would move it up to 5th place on our list.
2. More sunlight means more electricity produced, but it doesn’t always mean more savings
Not surprisingly, in sunnier states, solar panels produce more electricity, but the relationship between electricity produced and estimated savings is weak. Take a look at Las Vegas, for example. Solar panels in Las Vegas will produce the most electricity, but only will save around $730 per year. That’s about $360 less than New York City, even though the panels in New York are expected to produce 2000 fewer kWh per year. Again, this is a function of the electricity costs which are twice as high in New York vs. Las Vegas.