Estimated Electricity Bill Savings for Residential Solar Photovoltaic System Owners: Are They Accurate Enough?


Techno-economic models are widely used to estimate electricity bill savings attributable to residential solar photovoltaic systems. However, there are not many studies that examine whether estimated savings are actually realized or not. The objective of the study is to compare estimated savings with actual savings using statistical and econometric approaches of data analysis. Based on a sample of solar adopters located in the United States of America, this study finds that actual savings are on average 20% higher than estimated savings, but they are also relatively more spread out than estimated savings. One possible explanation for a lower estimated savings is the inability of models to fully capture favorable changes in household habits, the electric rate structure, and weather. Factors that are correlated with higher estimated savings are more technical (photovoltaic size-to-load ratio, floor area, and age of house) and do not necessarily matter for actual savings. Higher initial electricity bills are positively correlated with higher actual savings on average, but not with estimated savings. There is some room for making solar estimate models more customizable, indicating best and worst case scenarios depending on changes in household habits and exogenous factors. Finally, for the sample of solar adopters in this study, customers' perception on savings is fairly correct in reflecting the deviation between actual and estimated savings.



Research Center/Lab(s)

Center for Research in Energy and Environment (CREE)

Keywords and Phrases

Econometrics; Economics; Electricity bill; Net metering; Solar adopters

International Standard Serial Number (ISSN)


Document Type

Article - Journal

Document Version


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© 2019 Elsevier Ltd, All rights reserved.

Publication Date

01 Nov 2019