Phantom Solar Savings
Inflated savings projections from solar installers that assume unrealistic energy escalation rates (5-7% vs actual 2-3%), cherry-picked production estimates, or ignore degradation and maintenance costs.
Why It Matters
Always scrutinize the assumptions behind a solar proposal savings estimate. Compare the assumed escalation rate, production estimate, and degradation rate to independent benchmarks.
Related Tools
Related Terms
Energy Cost Escalation
The historical and projected rate at which electricity prices increase over time. US electricity prices have risen about 2-3% annually over the past 20 years, though this varies by state.
Annual Degradation
The gradual decline in solar panel output over time, typically 0.3-0.5% per year for modern panels. After 25 years, panels still produce 87-92% of their original rated power.
Solar Savings Rate
The effective per-kWh value of solar electricity to the homeowner, accounting for self-consumption at retail rates, exports at lower rates, demand charge reduction, and avoided rate escalation.