What is Solar Offset?

Don't worry. We'll do the heavy calculations for you. 

Picture of page author Alex Kelleher.

by Alex Kelleher
5 min read - Published on 05/10/2022

"Solar offset" is the new jargon in the solar industry—so what exactly does it mean? Essentially, solar offset tells you how much energy your solar system produces compared to how much energy you use. It's a one-glance peek into how effective your system is at swapping out your grid-based power.

To calculate your solar offset, divide the amount of electricity your solar system produced over a year by the total amount of energy you consumed in your home. This figure is expressed as a percentage. 

Understanding your solar offset gives you an idea of how much energy you'll have to pull from the grid to subsidize your system's energy production. I know it sounds like a lot, so let's break it down with a simple metaphor.

Pretend you have an apple tree in your yard that yields 50 apples during the year. Now pretend that your family eats 100 apples that year. You will have to subsidize the apples produced in your backyard with 50 more apples purchased from the grocery store, making your apple-tree-based offset 50%. Pretty simple.

Now let's apply that to a hypothetical solar energy system:

Your system produced 18,200 kilowatt-hours of electricity and you used 20,400 kilowatt-hours of electricity.
So your solar offset would be 89% because your solar system accounted for 89% of the energy your home consumed during the year. 

It's important to note that a 100% offset doesn't necessarily mean that you will have a $0 utility bill. Solar panel technology hasn't quite improved to the point of creating power from sunlight during the middle of the night yet (that's called magic!), so you will still be using grid-power or pulling from a backup battery during those hours. However, with a high enough offset number you will start selling your excess energy back to the grid, and lowering the cost of the energy you may have to purchase from your utility company. 

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What is the magic offset number?

There is none.

Sorry—probably not the answer you were looking for, but it's true! This is one of those things we will figure out with you. 

When we calculate your system size and determine your offset we will consider dozens of uncontrollable factors to optimize your design to best meet your expectations.

Ideally, we'll shoot for around or a little over 100% offset, but some homes have a huge south-facing roof with wide-open shingle space to fit a system sized for a king, and sometimes we do the best with what we have.

But, here is the beautiful thing: even if the best ends up at less than 100% offset, it's still pretty amazing.

What is the benefit to less than 100% offset?

With less than 100% offset you still benefit from a fixed monthly solar payment and lower costs from financing less panels, all while utilizing a clean and renewable source of energy for a good chunk of your energy needs. Some solar owners will even choose to start off small and include more panels over time, gradually increasing their offset. 

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Fixed Lower Monthly Payment

It's simple: the higher your solar offset, the less energy you have to buy from your power company and the more clean, renewable energy you can use to power your home.

Whether or not your offset is 100%, your solar payment will be a fixed monthly payment, so you won't have to worry about any more rate hikes or fees that you have dealt with in the past. 

By switching to solar with Lumio you reclaim power over your energy bill—at whatever offset plans meet your current goals. 

With minimal connection fees and your solar panels generating a good amount of power during those peak hours you’ll see your savings start to add up. With additional programs like net metering and the investment tax credit you can easily begin to produce your own electricity and help society pivot away from dependence on fossil fuels.

Less Panels To Finance

One of the biggest reasons for designing a system with less than 100% planned offset is due to limited roof space. Your roof may have a few unusable areas due to vents, skylights, or other obstacles, but financing fewer panels is a good way to limit your solar burden and still enjoy the rest of the sweet benefits of switching to solar. Remember any amount of solar produced by your panels can save you money, no matter the size!

Utilizing Renewable Energy

When you utilize the clean, renewable, energy from the sun that your panels generate you’re not just saving money, you’re doing your part to save the planet. Switching to solar benefits you and the environment by decreasing your carbon footprint, lowering our dependance on fossil fuels, and gaining true energy independence for decades to come.

Whatever your solar offset may be, solar with Lumio gives you the power to dictate what happens with the future of your electricity. To learn more, talk to one of our solar experts today!