Cost of Solar Panels: Understanding the Expense of Going Solar
Solar energy is the world’s greenest source of renewable power and savvy home and business owners are increasingly putting solar panels on their rooftops to take advantage of this abundant resource. It allows them to reduce their energy bills and their carbon footprint at the same time. But how much does it cost to go solar? And, is it worth it?
In this piece, we’ll break down the costs of typical solar panels, the different types of solar panels, the cost of installing solar panels, the pros and cons of a solar panel system, and how much cash a solar system can save you. This information will help you decide if solar panels are the right choice for your house or business.
What is a solar panel?
Solar panels are devices that absorb the sun’s rays and convert them into electricity or heat. Photovoltaic solar panels or PV panels are those that convert sunlight into electricity. They also have additional benefits, including:
They can increase the value of your home, as they’re considered an upgrade.
By using solar energy you reduce your reliance on fossil fuels, which harm the environment.
They last a long time and are designed to endure the elements.
While the cost of solar panels continues to drop, you can get an even better deal on them thanks to federal and local incentives and tax credits that lower their costs.
What are the different types of solar panels?
There are various types of solar PV panels. The most common are monocrystalline or polycrystalline silicon panels, and thin-film solar panels. Each panel is made up of a number of PV cells that are connected to each other in series. Each type of panel has advantages and disadvantages.
The more efficient a solar panel is, means it converts more sunlight into electricity. A system with more efficient solar panels will produce more energy in the same space as a system with less efficient panels. The most efficient solar panels often cost more than less efficient panels because the materials used cost more.
Monocrystalline solar panels are made of highly pure monocrystalline silicon cells. These are among the most efficient commercially available solar panels. They also have long lifespans and provide good performance in low-light settings. However, they’re usually the most expensive solar panels and costs vary from $3 to $4 per watt.
Polycrystalline solar panels are built from polycrystalline silicon. They are generally slightly less efficient than monocrystalline silicon solar panels, but they are less expensive to produce. Polycrystalline silicon solar panels costs vary from $2 to $3 per watt.
Thin-film solar panels are constructed from thin layers of various materials such as amorphous silicon, cadmium telluride, and copper indium gallium selenide. They show the most promise for increasing efficiency at lower costs but currently are usually less efficient than their silicon counterparts.
They are also more flexible and lightweight. It makes them ideal for applications such as rooftops with limited load-bearing capability and curved surfaces. As such, some are fashioned into roofing tiles. They generally cost between $1 and $2 per watt.
Things to consider before investing in solar panels:
When choosing to install solar panels, there are several things you should consider. Chief among them is how long it will take for them to pay for themselves. Your solar installer should help you understand that by discussing the following factors:
Does my house get consistent sunlight all year?
Does my roof face to the south, southwest, or west?
Is my roof completely or partly clear of shadows?
Is there enough space on my roof for a solar panel system?
Will my solar system outlive my roof or should I install a new roof first?
What tax advantages, incentives or refunds do my utility provider and local government offer for solar power?
Are there trustworthy, well-established solar providers in my neighborhood?
How much does a solar system cost?
The cost of a solar system includes a number of variables, including the size of a system, installation and permitting costs as well as the costs of the panels themselves. The average cost of residential solar systems in the US is $3.43 cents per watt, according to the Solar Energy Industries Association’s (SEIA) latest figures from the third quarter of 2023.
This implies that an average 6-kilowatt (kW) residential solar system would cost about $20,580 without any incentives or rebates. However, the cost of a solar array for your home or building often costs less to you depending on where you live and local incentives.
Reports show that the average cost of solar panels in California was about $3.05 per watt. Whereas the same solar system would cost $2.45 per watt in Texas. You’ll also find that prices and quotes will vary from installer to installer in your region. So, it’s important to get numerous quotes from highly regarded installers before going solar.
How much can solar panels save you?
Based on the cost and size of a proposed solar array, we can estimate how much the solar panels will save the average homeowner over its lifetime. After the cost of a solar array is paid off it’s providing free energy. Depending on how the financing of a solar system is handled and local regulations you could even sell electricity back into the electric grid!
That said, most solar arrays generate enough electricity to pay for themselves between six and 10 years of operation. The solar panels are expected to last between 25 to 30 years before their efficiency begins to diminish. This means that after you pay off your solar panels, you will save on power expenses for more than 16 years.
How much will that add up to? Let’s say the cost of installing your solar panels is $16,000, before considering incentives. The 30% federal tax credit on the system will reduce the cost by $4,800 making your system cost $11,200. If the system reduces your electric bill by about $100 a month or $1,200 a year, the system would pay for itself in under a decade. After that, if the system operates for 16 more years it will have saved you $19,200—more if you’re utility raised rates while you saved with solar.
If your local regulations include net-metering, you can sell the electricity your solar panels produce and that you’re not using to the electric grid. Net-metering also helps reduce the need for utilities to burn more fossil fuels since they’re getting it from you, your solar powered neighbors and local businesses. Check with your utilities and solar installers to see if they offer this option.
Is investing in solar panels worth it?
Installing solar panels is almost always worthwhile because the long-term savings and increased property value outweigh the initial expense. A solar installation significantly lowers, if not entirely eliminates electricity expenses. On average they produce an annual savings of $1,346 compared to buying electricity from the grid and they have a lifespan of 25 years or more. However, whether or not solar panels are worth it for your home depends on some additional factors, including:
The local climate and weather conditions
The size, steepness, and orientation of your roof
Local solar incentives
How much energy your home uses.
The best savings are realized on homes with large, south-facing roofs, in areas with lots of sunshine, and are bolstered by great solar incentives. Even if you don’t live in the ideal conditions a solar installation will still produce energy savings in many circumstances.
Conclusion:
Solar panels are a fantastic way to create your own renewable electricity, save money on your power bills, and increase the value of your home. However, solar panels are a significant investment and to get the most out of them requires planning, decision-making and finding good partners, like a reliable solar installer, to work with.
If you’d like to know more, or would like to get an estimate from your local solar installers, you can use our tools here.
