How Much Do Solar Panels Cost, and Are They Worth It?
Finance your next remodeling project!
Check the loan offers you qualify for.
Your credit score will not be affected
Sustainable living using renewable energy sources has now gone beyond being a fad and is a smart lifestyle choice that a lot of homeowners are opting for. Solar power is one of those smart choices that are both energy efficient and a sure-shot way of saving money on energy bills in the long run. However, as with any other investment, there is a cost involved. So how much do solar panels cost, and are they worth it? Let’s take a gander and figure it out.
The Cost of Going Solar
Choosing solar energy doesn’t just mean buying solar panels. There is a lot more to it than just that. The national average cost of a solar panel installation for a home is between $16,395 and $30,749, with slight variations depending on the state.
For example, the average cost of solar panel installation in Massachusetts is around $16,000, while California averages slightly lower at $15,150. Similarly, Maryland has an average installation cost of around $16,272 while Florida is a lot lower at $13,250.
While most service providers have solar calculators on their websites to help you calculate exact installation costs based on your specific needs, let’s break them down to see what the various components involved are.
1. Types of Needs
First, you’ll need to decide what your need is, and buy a solar panel system based on that need. There are three main types of systems.
If you have a utility grid and want to only save money on your electric bill, you will need a grid-tie system.
If you are looking at using solar power only for certain applications, or as a backup when you have no power, you will need a grid-tie system with batteries.
If you’re remotely located and have no grid access, you will need an off grid system.
2. Types of Panels
Sure, you’ll need to buy solar panels first. But what kind of solar panels will you buy? Monocrystalline panels are more expensive, but are more efficient. You will need to allocate less space and buy fewer panels if you choose them. Expect to spend between $0.60 and $0.90 per watt on monocrystalline panels. They last as many as 35 years.
Polycrystalline panels will be easier on your purse strings, but are less efficient and more space consuming than monocrystalline panels. These will cost you between $0.40 and $0.60 per watt, and are slightly less durable, with a maximum longevity of 27 years
Thin film panels are the least efficient and durable of all three, while costing almost as much as monocrystalline panels. These will not last you more than 17 years.
3. Size of Panels
The size of a solar panel is measured in wattage. Panels come in a variety of sizes, from tiny panels that generate only 5 watts to larger premium panels that generate upwards of 400 watts. The most common panel size for domestic usage is 330 watts.
4. Brand of Panels
The cost of solar panels will also depend on whether you choose a tier one brand like Sunpower, Panasonic and Solarworld or if you want to save money using a tier 2 or tier 3 brand.
5. Energy Consumption
The number of panels you will need to buy will also depend on your monthly energy usage in your area. The average American household will need a 5 kilowatt solar energy system to help reduce monthly utility bills.
A 5 kilowatt solar energy system will normally need to be powered by 16 330 watt panels.
6. Type of Installation
Where you want to install solar panels will also make a difference to how much you may eventually end up spending.
Do you want your panels ground mounted or roof mounted? Roof mounted solar panel installation is more affordable amongst the two.
Even if you choose to roof mount your panels, the kind of roofing your home has will also affect your final expenditure.
For example, tiled roofs are more expensive to install solar panels on because you will need special brackets to lift the panels above the tiles. Concrete tiles are cheaper to install panels on in comparison with clay tiles.
The most affordable and adaptable roofing material to install solar panels on are metal roofs with standing seams.
7. Weather Patterns and Shade
The amount of sun and shade your panels will have exposure to affects the cost of your solar energy system as well. The general rule of thumb is that your panels will generate half the amount of power when under shade or cloud cover as they would when exposed to direct sunlight.
You will need inverters to convert the DC power generated by your panels to AC power that you can use to power appliances in your home. How many inverters you need, what brand you buy and what type of inverter you choose will all affect how much you end up spending.
9. Monitoring Software
You will need to bear the cost of a monitoring software, or interconnection cost, to monitor your energy usage. Different utility companies have different charges for this service, so check with your local utility company to know how much your interconnection cost will be.
10. Payment Mode
How much you eventually end up spending on your solar power system will also depend on whether you take a loan to pay for it, lease it out or buy the system outright.
Choosing to install a solar energy system and be environmentally conscious comes with benefits as well. You automatically qualify for a 26% Federal Solar Tax Credit on the total cost of your installation.
That means if the average cost of setting up a 5 kilowatt solar panel system for your home costs you $21,000, you get a rebate of $5,460, which means you end up spending only $15,540.
Other than the Federal Solar Tax Credit, you may also be eligible for local incentives, net metering and more. To see what you qualify for in your area, check the Database of State Incentives for Renewables and Efficiency website.
Return on Investment
How long before I make back my investment on solar power, you ask? Well, the calculation is pretty easy. Take the estimated cost of your solar installation and divide it by the electricity rates charged by your local utilities company. Divide that number with your annual usage in kilowatt hours, and you will have the number of years it will take for you to make back your investment.
On an average, the expected ROI period is 8 years. Most solar panel systems last at least 20 years, with most lasting around 25 years. That means your basic investment will pay for itself anywhere between two and three times over. Talk about great ROI!
To Invest or Not to Invest
Still on the fence on whether you really want solar panels or not for your home? Well, let’s leave you with a comparative analysis to help you decide.
- Solar power is definitely going to save you money on your energy bills.
- Except for occasional cleaning and regular maintenance for your batteries and inverters, solar panels are maintenance free.
- A lot of new technology is solar powered. Be a part of that revolution.
- If you don’t have sufficient sunlight, there’s not much energy your solar panels can generate.
- Solar panels take up a fair amount of space, even if it is on your rooftop.
- A recent study suggests that solar power may not be as environmentally friendly as they are believed to be, implying that they produce even more greenhouse gases than conventional power generation methods.
Thank you for reading!
We would love to stay in touch with:
- New renovation articles
- Related discounts
- Contractor referrals