Solar Panels Benefits – FREE Heating, Cooling & Electricity + Heat Pumps: 4 Year ROI, & $10,000/yr Savings

Typical Cost To Install Ductless Mini-Split Average: $3,070 - $4,380
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Between 2020 and 2022 I installed 15,400 Watt Solar PV and 6 zones of high-efficiency Ductless Heat Pumps (HYPER HEAT that works down to -15°F), at an average cost of $40,000 total out of pocket after rebates and tax credits ($52,000 actual cost).

I also will try to qualify for Mass Save heat-pump rebate of up-to $10,000, but I have doubts about this one. 🙂

Top Benefits Of Solar Panels

In 4 years I will completely pay off (ROI) my solar & heat pumps. If I hired an HVAC contractor, my ROI would extend to about 5-6 years, which is still extremely good!

In 4 years I will be generating about $9,000-10,000 (likely more, as cost of energy is only going up) in net annual saving/income, until my solar heat pump dies, or I sell the house.

At 10 years mark, the SMART (SREC) program will end, and my savings will be reduced by about $1,780 / year. However, at that time, the cost of energy savings will likely far surpass this “loss”.

Here is my story in real numbers, and why almost everyone should do the same!

Heating System (Ductless Heat Pump) Overview And Design Requirements

Typical Cost To Install a 4-zone Ductless Heat Pump Average: $11,890 - $18,910
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For this whole concept of free heating to work, you will need not only big enough solar PV array, but also powerful and efficient Low Ambient Temperature Ductless Heat Pump system.

We will discuss details of this below in greater details, but here are the basic specifications:

-Ability to heat in very cold outdoor temps: -15°F

-Multi-zone design – heat on rooms that are occupied.

-Outdoor unit(s) mounting with snow build-up in mind – use 18-24″ AC stand to keep condenser unit above snow.

-Base-pan heating strip to melt ice build-up inside condenser unit.

Essentially in US, there are only about 5 manufacturers (that I know of, and Daikin is not one of them) which offer these Hyper Heating systems:

Fujitsu (xLTH series that heats down to -15°F)
Mitsubishi (“Hyper Heat” series that heats down to -13°F)
LG (“RED” series that heats down to -13°F)
Cooper & Hunter (“HYPER” series that is advertised as heating down to -22°F)
Mr.COOL (Universal Hyper Heat central heat pump that heats down to -22°F)

NOTE: Cooper & Hunter is a private labeled MIDEA equipment, and can be found under different brand names.

Pro Tip: My choice among all these brands is Fujitsu (hence I put it first in the least).

Fujitsu offers superior specs, significantly lower cost (compared to Mitsubishi), unparalleled quality of Japanese engineering, and excellent reliability.

In over 5 years of installing Fujitsu, I’ve not had any service or repair calls, including multiple systems in my own home, that run year round!

Free Solar Heating Overview [VIDEO]:

I recorded this video immediately after my solar was installed, but not yet turned on. It is actually working out better than I thought, and covers about 80-85% of my total electricity needs for Cooling, Heating and Electricity needs.

How You Can Get (ALMOST) FREE Heating & Cooling in Your Home?

BASIC PREMIS: You need to heat your home, and will do it. You also need to run AC on very hot days, and need electricity for your lights, fridge, computers, etc.

You may go into extreme saving mode – wear winter coat inside your home, and drop heating temps to 65°F (as Obama suggested in 2011), and run fans in the summer, and turn of most lights, etc.

Still you need to heat your home (even at 65°), and need electricity, etc. And at some point you get tired of walking around your house in a winter coat.

Guess what – you can have a comfortable temperature setting in your house all year round (72°F per Obama’s recommendation), and pay very little for it or nothing at all, depending on where you live, and after 4-8 years be getting money back from your electric company!

Will it work for everyone – NO!
Will it work for many people – YES!

It will require a substantial upfront investment (which can be financed with a FIXED RATE LOAN) and in most cases your energy savings will be higher that the combined loan payment, it will not actually cost you anything.

When you finance your Solar + Heat Pumps with Hyper Heating, in most cases, your loan payment will be LOWER that what you would pay for electricity / gas / oil / propane!

You can estimate your monthly heating bill with out Heating Costs Calculator, and you cooling bill with our AC Cooling Costs Calculator.

To cut to the chase, the “FREE HEATING” is REAL, but requires initial investment into:

  • Solar PV, and a multi-zone Ductless Heat Pump (or Hyper Heat Central Heat Pump, which are very rare).
  • Your local Net Metering rules & regulations will also affect how “free” your heating will be.
  • Finally, your roof size, orientation and shading will determine how much solar you can install.

Why Install Solar Panels In A Nutshell

1) You install 10 to 20+ KW of solar panels – outright purchase with OR without solar loan or home equity loan, etc. NO Solar Leasing or PPA.

2) Your solar panels generate enough electricity for your AC in the summer, and the excess kWh get stored with your electric company as credit.

3) Throughout late spring, summer and early fall, as well as during the rest of the year, you accumulate large enough credit AND generate enough kWh to cover most if not all of your electricity used for HEATING during the winter.

4) Your monthly solar loan payment is lower than your combined heating/electrical bill saving.

Within 3-7 years you should completely pay off your solar (or save enough money to pay it off). After than you begin to pay off your new HVAC equipment cost.

My Solar Payback And How I Get FREE HEATING

There are a lot of ifs, so “your mileage will vary”. But for me – I hired a reputable local solar installer & paid retail price of $2.68 per Watt$41,272 total before any rebates, for a 15,400 Watt solar PV system.

Payment would be $437.75/month, if you finance at 5% for 10 years, but that is BEFORE rebates, Tax Credits, S-REC payments, and the electricity that you actually generate and use.

If we subtract 26% Federal Tax Credit and $1,000 MA State Solar Rebate, our out of pocket cost is $29,541.28, which gives us $313.33/payment at 5% APR, and a more realistic payment at 7% in 2022 would be $343.00.

Now consider this – my average electric usage in 2020 (when I had two heat pump zones which covered most of my heating & cooling, but not in every room) was 850 kWh per month. At current EverSource ACTAUL rate of of electricity at $0.31 / kWh, that would cost me $263.50 per month.

Rate is CORRECT, and is based on Apr 25, 2022 bill for $241.61 and usage of 779 kWh = $0.310154 / kWh.

An anomaly I noticed – my May 25 bill is $49.32 for 123 kWh (less $7 customer charge) = $0.3441 / kWh – ouch 🙁 … things are getting really bad, and I am ever-so-glad I went with solar.

Now that I added a new 3-zone Fujitsu Heat Pump, and basically completed installing heat pumps in my home with a total of 6 zones of Hyper Heat (XLTH) heat pumps, next winter I will have a full picture of how much electricity I actually use.

However, because one of the zones replaced an “older” single zone unit, and the other 3 zones zones will be rarely used – we will only have 3 active zones.

One of the zones gets a LOT of residual heat from downstairs and rarely needs to be turned on at full blast. In 2021 that zone was not even installed and the room was warm (about 70°F on a cold day) for the downstairs unit.

Therefore I don’t see much increase in actual electric usage.

ANNUAL SOLAR PRODUCTION: One important aspect to mention – the way net metering works in MA – I’m limited by 10KW AC inverter size if I want to get 100% net metering credit.

If I go over 10KW, my net metering credit goes down to 60% for the whole amount! So I had no incentive to go with more than 10KW inverter.

This meant that I lose about 10-15% of production due to “CLIPPING”, during late spring, summer and early fall months.

Basically while my solar panels produce about 12 kW at peak sun, the inverter can only process 10kW – the rest is lost to the clipping.

My pro so far in 2022 (as of Jun 26th) is 8.43 MWh (8430 kWh). Since we are at mid-year mark, it is safe to assume that I will end up with about 17,000 kWh in 2022.

That is the electricity I will not have to buy at $0.344 per kWh! My actual saving on electricity will be $5850 / year OR $487 / month!

My net gain at this point is – $487 -$343.00 (loan payment) = $144/month in net savings!

But wait – it gets better: I also (should be) getting about $0.11/kWh in SRECs (solar renewable energy credits) or “MA SMART” payments, which is about $1,780 per year or $156 per month.

And it gets even better than that! I also reduced my insanely high Gas Heating bill down to about $75-100 / month for stove / dryer / water heater usage!

My last full month of heating with a 64% AFUE furnace was in Feb 2020, and it was about $660 (about $580 of that went to heating + 75 kWh in monthly electric costs for blower fan).

At this winter’s rate we would be looking at about $850/mo peak and about $600/mo average for 6 months or $3,600/year in savings on gas heating!

So, my total saving per year is $11,230! Even if I’m overly optimistic, and my actual saving will be closer to $9,500 due to EverSource’s net metering shenanigans (they actually only “pay” you $0.275 per kWh, while selling the electricity to you for $0.344, so about 80 cents on a dollar), and having to income tax on the $1,780 SRECs, and overestimating Gas savings, etc, I’m still looking a 3 YEARS ROI on my Solar PV!

Really it’s actually better, because 6 months a year I use 100% of what I produce, so there is no net metering. I will still have to buy some power, because Heat Pump heating is very energy intensive – I will know for sure in 6-9 months.

Regardless – I have to pay for gas or electricity to heat and cool my home. cost of monthly production is about $600 (includes SRECs), and the loan payment is $343, so I net about $247 in monthly saving by going solar!

Once solar ROI hits, I will be recouping the cost of the heat pumps at about $10,000/year!

If I paid an HVAC contractor, my heat pumps cost would be about $20,000 – 25,000 (minus $10,000 rebate on total house heat pump heating), so my total ROI would be about 5-6 years.

Since I did the install myself, and my equipment cost is about $11,000 – I will ROI in 4 years on both Solar + Heat Pumps! After that I will have ALMOST FREE heating, cooling and electricity, after a small electric bill of about $100/month.

When And Where WILL Solar Panels NOT WORK?

As mentioned before – there are numerous limiting factors, such as your home / roof orientation to the sun, shading, roof size (how many solar panels you can fit on the roof), local laws, neighbors, your state’s net metering rules and laws, your electric rates.

Most people in the US will be paying above $0.20 per kWh in 2022 and onward, so this won’t be as much an issue as it was say 2 years ago.

Other issues include how much sun you get in your state/province. For example, electricity in Alaska is not too inexpensive, but winters are very cold, and there is very little sun, so solar is not really a great option. Same in Idaho – electricity EXTREMELY cheap, but it’s cold and not enough sun.

The good news however – these states have small populations, and most Americans live in states with milder climates, more sun hours, and higher electric costs.

So for most people, limitation if the first paragraph of this section are more relevant.

Finally keep in mind, that I installed my heat pumps myself, saving about $15,000-20,000 on labor, and my total time spent on this is about 2 weeks.

If your electricity cost is low(er), then your ROI period will be longer – closer to 6-8 years on total systems (Solar + Heat Pumps).

Still we are talking about TODAY’s prices. Energy costs go up historically about 5-7% per year, which is much higher than inflation we had before Covid and Great Inflation of 2022 (thanks Joe).

Now all bets are off, and energy costs in US are going up by double digits. I paid $0.22 / kWh in Aug 2021. A year later its $0.344 / kWh, which is a 64% increase in 12 months.

Going forward, it WILL NOT GET BETTER! Therefore even if your ROI is 8 years now, in couple of years with price increases it can easily go down to 5-6 total years of ROI.

As mentioned before – electricity / gas / heating oil and propane – are irreplaceable when you need to heat and cool your home.

You can only reduce your heat load by lowering the thermostat in the winter (and raising it in the summer), but you won’t get rid of energy completely. You still need heating / cooling / electricity.

Insulate Your Home, Before Installing New HVAC And Solar!

Typical Cost To Install Spray Foam Inuslation Average: $4,180 - $10,370
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Speaking about reducing heat load – one thing that REALLY works to reduce your energy bill year after year is INSULATION, and you should really work on adding as much of that as possible (including installing energy efficient windows).

I did this in 2021. A year before I did it, my living room heat pump was working on FULL LOAD when temps dropped to -7°F and could not keep up. Temperature in the living room was barely 59-61°F and I had to run my furnace.

After insulating upstairs bedrooms, and replacing about 250 sq. ft. of single-pane glass (windows) with new Alside Windows (Triple Glaze UltraMaxx), and insulating a screened porch 6″ of closed-cell spray foam + 10 double-glaze “cheap” Alside windows, the same Single Zone 9000 BTUs Fujitsu 09LZAH (which has 22000 BTUs of heat output) kept about 1100 sq. ft. combined downstairs/upstairs living space at a comfortable 76°F even when outside it was -8°F.

My friends actually complained that it’s always too hot. I did not run my furnace the entire winter of 2021/2022, and just two 9000 BTU Fujitsu heat pumps kept my house warm all winter!

Typical Cost To Install 10 Windows Average: $3,620 - $6,640
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So the only difference is Insulation and New Windows, and indoor temperatures went up 16°F with the same electrical load (which was maxed out at 2400W on coldest days).

VERDICT – ALWAYS GET MORE INSULATION before new solar and/or new heating/cooling system. Reducing the heat load is the most efficient upgrade you can make.

In actual terms, you can reduce your heat load form 70K-90K BTUs to something like 50K-60K BTUs with massive insulation upgrades.

This will result in almost 30-40% reduction in your energy costs for years to come!


Typical Cost To Install Ductless Mini-Split Average: $3,070 - $4,380
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I don’t know what is the best way to put it, but ALL CENTRAL Heat Pumps absolutely STINK at heating!

Even the $50,000 Lennox or Daikin … They are just terrible and are a total scam.

That’s a whole different subject and we will cover it in a separate guide.

For now, check out our Heat Pump Heating Efficiency guide, to learn why only Hyper Heat / XLTH ductless heat pumps are a viable heating systems in temps down to -15°F.

If you are too lazy to read the above guide, in a nut-shell:

Central Heat Pumps DO NOT HEAT in outside temperatures below 35-40°F! They just don’t – they can only heat when it is above freezing.

As a backup source of heat, they use a Gas Furnace or an Electric Heat Strip 😀 … That means going solar will not do anything for you if you use Gas Furnace, as you will still be burning gas to heat your home.

And if you use Electric Heat Strip, you will be using 3-4 time more electricity for heating than a heat pump, and losing 10-25% of that heat in the ducts.

Might as well just do electric baseboards throughout your home – it will be more efficient and much cheaper, and normal size solar will never generate enough power to cover even half of your power needs.

However, big HVAC brands are pushing their “heat pumps” and lying to people in their promo literature, tricking them into thinking that Heat Pump will heat…

Yes it will, but only when it’s above 35-40°F … which is spring/fall – not winter.

Bottom line – you need a dedicated Extra Low Temperature Heating Ductless Heat Pump. And central heat pumps are a SCAM!

NOTE: There is only one exception to the above – a MrCOOL Universal Hyper Heat central heat pump (-22°F), which can work in very cold temperatures without backup Gas Furnace or Electric Heat Strip.

Additional Considerations Before Installing Solar Panels

NOTE 1: I did not install the solar, and that (full house grid-tied solar) is a project beyond my realistic capacity, and doing it myself, would actually cost me more, as I earn more in my day job, than I would save by wasting 3-4 weeks hanging panels and running wires, and another 2-3 weeks doing the paperwork.

NOTE 2: More than half of my solar cost is materials, so actual savings would be about about $17,000-19,000, if I did it myself – a lot of money no doubt.

But I also claim 26% tax credit on this, so actual saving about $12,500-14,000. I would make more in 6-7 weeks doing my actual work, and not be so stressed.

As you can see, doing the HVAC work myself is much more cost-efficient.

Since most homeowners cannot do HVAC work, you will most likely hire a contractor and a ductless heat pump will cost about $4,000 per zone/room.

If you feel like you can handle HVAC, I have a complete DIY the Heat Pump Installation Guide.

Typical Cost To Install a 4-zone Ductless Heat Pump Average: $11,890 - $18,910
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About Leo Bender

Leo has been a contractor since 2003, specializing in: roofing, siding, general contracting (GC) and residential remodeling. Leo is also a Certified HVAC, Oil & Gas Heating Technician/Installer. In addition to roofing and remodeling, Leo is passionate about Solar, green building and energy conservation, so a lot of my time and energy goes to installing energy efficient heating and cooling systems.

See more about Remodeling Calculator team here

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2 comments on “Solar Panels Benefits – FREE Heating, Cooling & Electricity + Heat Pumps: 4 Year ROI, & $10,000/yr Savings

    1. Leo B Post author


      I’m very familiar with this site. Please name a couple of cold climate CENTRAL heat pumps sold in US (besides MR.COOL) that do heating below 35°F … say at 5° or at -13°

      Even top of the line LENNOX will shut off heat pump around 35° and switch to alternative heat (furnace or electric strip).

      I haven’t found any commercially available Central Heat Pumps sold in US, made for cold climate heating.

      Meanwhile I’m on year 4 of heating my home with Fujitsu mini-splits, and now with solar, have a tiny electric bill around Feb/Mar, when my accumulated credit runs out.

      Also, credit is in dollars (not kHh), so what EverSource did/does – drop electric rates in the summer (it was around $0.28 credit per kWh in summer of 2022), and raise prices in the winter – now at $0.406/kWh … so in the winter they charge me 32% more for electricity that I generated in the summer. Still, my first bill this year was in February. Last bill before that was in March 2022. The rest was covered by solar. This includes lights, refrigerators, come cooking, other electric use, which is not small in my family with 5 kids, and living and fairly cold Massachusetts.