Understanding What Energy Offset Means

When you decided to move forward with your solar power system to generate clean renewable energy and help reduce your monthly utility bill, you were likely told that the system would offset a percentage of your electricity usage.  This may have been 100% or less.  Or, in some cases you may have opted to oversize the system and offset over 100% in anticipation of future electrical upgrades to your property that would use more electricity, like a heat pump or EV.

To understand this concept, let's start by understanding what the percentage is based on.  

Offset (%) = Solar Energy Produced (kWh/yr) / Pre-Solar 12 Months of Energy Usage (kWh/yr)

For example: Let's say your utility bill usage for the previous 12 months prior to getting solar is 14,800kWh. Then you get a 10.5kW system that generates 12,300kWh per year installed.

Offset (%) = 12,300kWh/yr  /  14,800kWh/yr  *  100  = 83.1%

Now, it is important to understand a couple of things;

Firstly the Pre-Solar 12 Months Usage value does not change.  Therefore, if you start to use more or less energy after the system is installed, it will affect the offset percentage.

Next, the solar power system is designed to produce a relatively fixed amount of energy annually. The system is not reactive based on usage.  Therefore, if you use more or less energy, the system does not have the ability to produce more or less power.  The system is only affected by environmental and utility factors.  

For example: In year 3 you add a heat pump and an EV to your home, and the energy usage increases from 14,800kWh/yr to 22,000kWh/yr, the system will still only produce about 12,300kWh/yr.

Yr 3 Offset (%) = 12,300kWh/yr  /  22,000kWh/yr  *  100  = 55.9%

Now in this hypothetical, even though you will need to buy more energy from your utility, you are still saving because the solar power system is supplying you a portion of your usage at a lower rate than your utility charges.  

The concept of energy offset can sound daunting to someone unfamiliar with it, but with a few simple math equations, you can calculate your home’s utility needs and understand the process of sizing a solar system. For more information on energy offset, and any other solar questions, please visit our Info Hub at Sunly.ca

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