Looking At Solar Incentives
An important thing to consider, as youre shuddering from the sight of solar panel costs, is that you can make a lot of that money right back with solar incentives. There are federal, state, and municipal tax credits and rebates that you can apply for that, when added up, can cover nearly 50% of the installation costs. So, when you install a $30,000 solar panel system on your home, you may end up actually paying around $15,000 in the end.
The state and municipal credits differ depending on where you live, but all American solar owners are entitled to the federal tax credit, which provides a 26% credit on your solar panels. Its important to note that this is not a cash rebate but can reduce or eliminate your tax payments. Theres no limit on the amount you can claim, but this credit is set to reduce to 22% at the end of 2022 and go away completely by 2024 .
When To Install Solar Panels
Contrary to popular belief, winter is actually the best time to install solar panels. There is simply less demand for this service in winter, so the installation should cost less as a whole. Even if you live in a region that tends to be cloudy and/or chilly, your solar panels will still be able to generate energy and in some cases, will even generate more energy than they would in warmer months.
Installing solar panels during winter is, in addition to being cost-effective, efficient. With installation companies doing fewer jobs in the off-season, your panels are likely to be installed faster, and will be up-and-running in no time.
Thats Great But What About The Solar Panel Installation Cost For My Home
If you are curious about how much solar panels cost, it generally depends on a few factors. These include:
- The size of your home solar system
- Whether you buy or lease
- Whether you qualify for federal, state, or local incentives and Whether you install a battery
When installing solar on your homes roof, there are several factors to consider.
Electricity needs How much energy you currently consume will directly relate to how big of a solar system you need and how many panels you need to support your homes energy needs.
Where you live How much sun exposure your homes roof gets will directly correlate to how much energy your solar system can produce and will impact how many panels you need for your home. More sun means more energy produced and a greater potential to save with solar.
Choice of solar panels – Better panels produce more energy more efficiently. The efficiency of the solar panels directly impacts the savings you can experience.
Roof angle – In solar panel installation, it is important to angle the solar panels so they can get maximum exposure to the sun. This is not a problem when the roof is angled, but it can be if the roof is flat. Houses with irregular rooflines, skylights, and challenging angles can make installation more complicated.
Purchasing options and incentives The payment option you choose will affect your costs, as well as your eligibility for incentives.
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How Much Do Solar Panels Cost
As per the Center of Sustainable Energy, the average cost of solar panel installation ranges between $15,000 and $25,000. At the affordable end, you can install a system for around $5,000. At the higher end, you can opt for a Tier 1 solar panel system that could cost $40,000 or even more.
After considering the federal solar tax credit, the cost of a 10 kW solar panel installation in the United States ranges from $17,612 to $23,236. The gross pricing can be anywhere between $23,800 to $31,400meaning $2.38 to $3.14 per wattfrom which 26% tax credit will be factored.
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If we calculate the cost of solar panels for a three-bedroom house, it amounts to around $18,500 for a 6kW solar panel system for a 1,500 square ft. home. The price per watt for solar panels can range from $2.50 to $3.50.
Most residential solar panels have a power range of 3kW to 8kW and can be installed for a price between $9,255 and $24,552. Installing a larger solar panel system for your home will reduce the cost per watt.
Do You Want To Save Money On Your Electric Bill
One of the best ways to do that is by installing a solar power system!
And not just any solar system but one of the most powerful systems available, which can produce up to 3 kW of electricity.
These systems have been designed so they provide maximum energy production and efficiency, while still being affordable for people. And because its an investment in your future, this kind of system will pay for itself within a few years.
The payback period for your solar panels , will partly depend on savings you made when you purchased the system, plus ongoing federal, state, or utility company incentives. If you are eligible for rebate schemes such as the Solar Renewable Energy Credits initiative, you will save even more money!
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Other Types Of Solar Loans
In-house financing
Some solar companies offer financing through third-party lenders. These loans can be similar to home improvement loans unsecured with no down payment required. The payment plans could have lower rates than personal loans and longer repayment terms, making your monthly payment lower.
Compare a quote from your solar company with other options to find the most affordable one.
Home equity loan
If you already know how much your solar panels will cost, you can apply for a home equity loan. These loans have lower rates and longer repayment terms than unsecured loans because putting up your home as collateral reduces some of the risk for a lender.
Home equity line of credit
A HELOC is another low-rate option that is secured by your home. Its more flexible than a home equity loan because you can draw on funds as you need them for the project, and you often have the option to only pay interest during the initial portion of the loan.
If youre considering a home-equity option, learn the pros and cons of each before you choose.
Cash-out refinance
A cash-out refinance can get you a new mortgage at a lower rate that includes the cost of solar panels and installation. Its a good option if current mortgage rates are lower than what youre paying and if you can keep closing costs low.
Leasing or getting a power purchase agreement
The U.S. Department of Energy has more details about the difference between a lease and power purchase agreement.
How Much Does A 10kw Solar System Cost
The cost of a 10kW solar system varies by region. However, the average price of residential solar in 2021 averaged around $2.76 per watt. That would mean then, to install a 10kW solar panel system on your home, you are looking at an estimated $27,600 in total costs. This figure does not include local, state or federal tax rebates6.
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How Much Does A Typical Residential Solar Electric System Cost
A number of factors determine the final price of a PV system, including its size, component options and configuration, labor costs, local permitting costs and available incentives and tax credits.
The cost of a solar electric system is measured in dollars per watt. The average cost for a residential system is currently $3-5 per watt. That means the average 5-kW residential system will cost $15,000-$25,000, prior to tax credits or incentives.
Labor Costs For Installing Solar Panels
For a 5kW solar energy system, which comprises of 15 to 25 panels, costs about $30,000. The average labor cost for the installation is $0.59 per Watt. It is about 10% of the total system cost. Therefore, for installation of a 5kW solar energy plant, the labor charges would cost $3,000. The expenses include electrician installation and non-electrician labor costs. Labor costs for installing solar panels vary depending on the conditions, the output of the solar energy plant, and the soft costs. For example, the hardware required for the setup is high in the United States when compared to Germany. Therefore, labor costs in Germany are $0.36 cheaper per Watt than the USA. Although the initial investment is high, over the course of the period, the solar panels save anywhere between $7,000 and $28,000. It depends on the country and the environmental conditions. Receiving a quote will be helpful before choosing an appropriate installer.
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How Much Does A Solar Panel Cost
Prices have been coming down steadily over the years. The total cost will depend on how many kilowatts of power your array will generate. According to consumer reports, after solar tax credits are accounted for, the cost for a solar panel system on an average-sized house in the U.S. in 2021 ranges from $11,000 to $15,000.
What Else Should I Keep In Mind For The Installation Process
You might have to pay more to install your new solar battery system if it needs to be retrofitted into an old system. Prices can increase by $1,000 to $3,000 for a major retrofit, especially if your installation requires extensive electrical work. Similarly, if you want or need a backup load panel for emergencies, youll need to account for those expenses which fall between $1,000 to $2,000 extra.
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Estimate How Long It Will Take To Pay Off Your Solar Panels
First, multiply your solar panel cost by 0.26, which is the tax credit you receive for installing your system. If you spend $20,000 on it initially, your tax credit is $5,200. That takes your initial investment down to $14,800.
Now, let’s factor in energy savings. Divide your initial investment by the $1,500 you typically pay the electric company per year that’s how long it’ll take for your savings to equal the amount you spend. Using the example above, you’d divide your initial investment of $14,800 by $1,500: The result is a payback period of just under 10 years.
That might seem like a long time on the surface, but solar panels can easily last 25 years.
You can further expedite your payback period by selling renewable energy certificates, or RECs. These are measured in megawatt hours of electricity that come from a renewable source. Electric companies must purchase some electricity from renewable sources, meaning you could save more by selling energy generated by your solar panels.
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Is It Worth Getting A Battery
Buying a solar battery is tempting because it offers you quite a bit more freedom from the power grid as well as giving you a power store to draw upon in emergencies. The issue with solar batteries is that they’re extremely expensive and will only pay themselves off in 10 years plus for the typical household, far longer than the 3-6 years of a grid-tied system.
Batteries may be worth it if you’re planning to stay at a property for a very long time and enjoy greater power independence. The good news is that solar batteries are getting cheaper all the time, and you can set up a battery-ready system now and buy it later when the price has dropped.
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Solar Battery Storage System Cost Factors
There are many factors to consider when calculating your total solar battery project cost. Here are the biggest factors that can impact your budget:
- Energy capacity: A major cost factor is how much energy your battery can store. Units that store more kWh cost more than units that store less.
- Power: Your batterys potential output is shown in kilowatts and determines how much electricity the battery can generate in a specific moment. Storage systems that are more efficient at storing energy are likely to cost more.
- Battery chemistry: Lithium-ion phosphate batteries cost more than lead-acid batteries, with LFP batteries costing approximately 30% to 50% more than some of the cheapest batteries on the market.
- Brand: One brand might charge more than another, but it might also have installation prices tacked onto the total cost that saves you money.
- Quality: High-quality materials will run higher than low-quality materials.
- Upgraded features: Inbuilt inverters, smart technology, and other upgrades may add to the cost of your battery unit.
- Installation company: Some battery brands do not come with installation, as theyre solely for solar equipment. You may have to purchase the battery through the manufacturer and then find a separate installation company.
- Retrofitting an existing system: Youll pay more to have a battery added to an existing solar panel than if you installed them at the same time.
Case Studies: How To Avoid A Bad Installation
We spoke to four different customers about what they learned from their own experiences with solar systems and the installation process. So what do you need to know if you’re planning to buy solar?
Before buying: Lot’s of research
- Michael poured a lot of energy into the quote process to make sure he’d get the best system with the Victorian solar rebate. He got quotes from 8 different companies, read online reviews, and spent four hours over more than a month discussing systems before settling on G-store, a Victorian state retailer. G-store decided to split the system between the north and west side of the roof based on Michael’s usage habits.
During installation: The installer fixed any issues:
- While the installation ran into some problems, including broken roof tiles and leaks, Michael was impressed with the way his installer dealt with it, allocating specific people for specific jobs to get everything fixed up. In the end, he paid $8,200 for a 5 kWh system on a 20 year warranty, and expects to make his money back in 3 years while saving $2,500 annually on bills.
After installation: Switched to a better plan and has actually made money on hot days
- Following the installation, Michael switched to Amber Electric for their wholesale power prices after he saw people tweeting about it online. He says he’s made $60 on some hot days by switching off appliances with a 16c/kWh feed-in tariff.
Before buying: Found an installer who looked at his house in a lot of detail
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State Solar Panel Rebates & Deductions
Individual states and cities offer their own policies, incentives and credits, as well. Some utility companies will even offer 10 to 20% rebates on your installation. With these incentives, combined with the ITC, you may be able to save as much as 50%.
- Washington: Utility companies offer rebates up to $2,000
- Massachusetts: Utility companies which offer rebates of $0.50/watt and up to $625/kW.
- New York State: Tax credit of 25% for PV systems.
- Florida: Permanent sales tax exemption for solar energy products. Also several utility companies offering $500 rebates on solar water heating systems, which cost an average of just over $3,500.
Leave Solar Panel Installation to the Pros
Solar Panel Roof Tiles Cost
Solar panel roof tiles have a cost per watt of $2.72 on average. These are also known as photovoltaic shingles. They blend seamlessly into your roof rather than mounting on top of your roof. Therefore, they are more aesthetically pleasing, but they have slightly higher-than-average costs to install and require an entirely new roof.
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Cost Of Diy Solar Panels
The cost of DIY solar panels runs $2,000 to $20,000 for a kit ranging from 2kW to 10kW. These kits include everything you need to install your own solar array. However, you may even look to building your own panels.
The costs to make your own system and build it from scratch is going to vary quite a lot depending on you level of skill. Its a highly technical and specialized field. If you have a high level of electrical skills, you may be toying with the idea of building your own solar panels. The cost of solar cells and the silicon wafers used to create them are available to purchase individually. To build your own, you would typically put 60 of these wafers onto a backing and wire each of them. You would then need to connect this to an inverter.
Consider, however, that there are several risks associated with building your own, including:
- You can’t be sure of the quality of solar cells purchased.
- Homemade panels are often a fire hazard.
- Many tax credits and incentives will not apply when systems are constructed outside of approved facilities.
Solar Thermal Panels Vs Photovoltaic Panels
You may find that in addition to the many other choices you have when it comes to solar, you also have two panel types to choose from. Solar thermal and photovoltaic are the two main types of solar energy. For most homes, photovoltaic is the most common type, while solar thermal is typically used for larger commercial settings.
Solar thermal panels use heat, which it then converts to energy. This means it could store the heat from the day and then produce energy at night. Photovoltaic cells produce electricity from light. This is the most common cell because they can be installed with or without batteries, and they do not overheat. Some thermal panels lose efficiency as they heat up, making them not as good a choice for mounting on top of a home or in very sunny climates. Both have a similar cost per watt, depending on the manufacturer.
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