In Conclusion: Are Solar Panels Worth It
At the end of the day, the cost of solar is only as important as the return youll get from installing solar panels. For most homeowners, solar is a worthwhile investment, and you can break even in as few as 7 or 8 years. From that point on, youre essentially generating free electricity and racking up the savings. During those 7 to 8 years, youll be generating your own electricity instead of paying for electricity from the grid, and any extra electricity you produce you might be able to get credit for thanks to net metering policies .
Of course, just like the cost of solar panels varies by state, your payback period with solar will also vary depending on where you live. As a general rule, places where electricity is most expensive will lead to the most lifetime savings from a solar panel system. Check out our article about electricity rates and solar savings for a more in-depth explanation of how this actually works.
What Determines The Cost Of Solar Panels
While the actual costs of solar panels and inverters have come down significantly in the past decade, the so-called soft costs remain high. Such costs include permitting, inspection, interconnection, marketing, sales tax, supply chain costs, and overhead. The costs of PV solar systems differ from state to state largely due to the red tape surrounding permitting, inspection, and interconnection. Even within the same state, the cost of solar panels largely depends on a number of factors. In addition, federal, state, and local financial incentive programs can also determine the final cost of a PV solar system.
- Solar system size and electricity consumption. Residential solar panel costs can vary based on the size of the system specific to your households needs. The larger the solar system, the higher the installation costs. Your past electricity usage can determine how much solar panels will cost for you. Your electricity consumption every month and the rate your utility charges you for the amount of kW/h used from the power grid determine your electricity bill. To find out how much electricity you consume, you can use this simple formula:
- Calculate the watts each device uses per day.
- Convert watts to kW .
- Determine the kW an appliance uses per month.
- Figure out the cost by multiplying the kW per month by your electric rate.
- Types of solar panels. There are three major types of solar panels on the market with different characteristics that determine their prices.
Estimated Solar Energy System Costs Per Watt
|10kW||$31,500 – $35,500|
Although the per-watt price of installing solar ranges from $2.50 to $3.50, it varies regionally You’ll see the greatest difference between the Southern and New England regions. This does not necessarily mean that it is less cost-effective in New England as opposed to other regions. Different states, even different counties, will have varying returns on investment dependent on other factors.
These factors include:
- Average electricity bills.
- Amount of sunshine expected per day.
Below you will find the average rates of having your system professionally installed, according to region and wattage. These figures do not include any tax credits or incentives. Consider that the average size is 5kW. Hawaii, included in the Western region, has a high rate per watt at $2.85 on average. Georgia, in the Southern region, has a lower rate at $2.53 on average.
Don’t Miss: How To Book Solo Cabin On Royal Caribbean
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.
Support From The Solar Trade Association
Solar Energy UK is a not-for-profit organisation that offers resources and guidance on all aspects of solar energy production for both commercial and domestic installations. All members of the Association follow best-practice guidelines to ensure solar farms are delivering a positive influence on both the energy production of the UK, and the environment. Their main points include:
You May Like: How Long Before Solar Panels Pay Off
What Is Driving The Declining Cost Of Solar Power
One of the main drivers bringing down the cost of solar power in the last decade is the tremendous growth in solar panel installation. Solar generation has experienced an average annual growth rate of 49%, which activates whats called the economy of scale. Thanks to increasing demand across the private and public sector for clean electricity, there are now more than 89 gigawatts of solar capacity installed nationwide, enough to power 16 million homes.
Add to that the impact of technological improvements and a competitive marketplace among a large base of experienced, internationally active project developers, and you have all the ingredients for a financial adjustment in the cost of solar.
Thus, solar panel installation cost has dropped by more than 70% over the last decade, leading the industry to expand into new markets and deploy thousands of systems nationwide.
Over the next 20 years, solar research firm Wood Mackenzie expects more than 2.6 terawatts of solar power to come on stream globally, taking renewables share of the worlds power capacity, including wind power, from 10% today to an impressive 30%.
And while the solar panel cost decreases, advancements in solar panel materials and methods used for fabricating photovoltaic solar cell has gotten better, too! Keep reading to learn more.
How Many Solar Panels Do I Need
Your energy needs determine how many panels you need, which affects the overall price of your solar system installation. To eliminate your electric bill entirely, you must generate 100% of the electricity your home needs. Most homeowners need between 25 and 35 panels to achieve complete energy independence.
Average households need867 kWh/monthin electrical power
A solar panel typically produces about one kilowatt-hour per day, so if your daily kWh usage is 30, you would need 30 solar panels to generate all of your energy needs. If you need to generate extra energy to heat a pool or run the air conditioning for most of the year, this adds to your energy costs.
To estimate the amount of energy youll need, you need to know your average kilowatt-hours . This number should be on your utility bill as kWh used. To get your monthly average, look at bills for the past year, add up the stated kWh used and divide by 12.
Next, divide your monthly kWh average by 30 to calculate your daily average. For instance, if your average monthly kWh is 900, then your average daily kWh is 30.
For a more accurate calculation, try to factor in times when there is not as much solar power available, like when its cloudy or in the evening. There are two main ways to account for this:
These additional calculations can be difficult, but they are necessary if you want the optimum solar power system for your home.
Don’t Miss: How To Install Solar Panels Myself
What Is The Average Cost Of Solar Panels
While solar panels can reduce your overall spending on energy during your lifetime, there are some major upfront costs to consider. The average cost of installing solar panels is $3.05 per watt, according to solar comparison-shopping marketplace EnergySage. With the average system size tallying in at 6 kilowatts, this means that the average solar panel system cost in the U.S. is around $12,810 after tax credits are applied.
The cost of panels only continues to fall as the technology becomes more advanced and cheaper to produce. Additionally, the federal solar tax credit deducts up to 30% from the total cost. This makes the solar panels much more affordable than they have ever been before.
The Invention Of Solar Panels By Usa
Solar panels were invented in the States back in the 1800s. The technology was lucrative, but profits were nowhere to be seen. The cost of solar was simply too high and energy store non-existent. Then, in the 1900s, American scientists created silicone solar panels and made solar power much cheaper. There was still no solar energy market and the few solar panel systems that were produced were mostly of the experimental value.
You May Like: How Much Are Solar Panels In California
Tesla Solar Installation Cost
Tesla solar panels cost $2.74 a watt. This translates to $14,940 to $17,940 for a 6kW system fully installed. Several factors impact the installation costs. These include your location, how much shade your property gets, roof pitch, and the panel and inverter types. Tesla makes a wide range of different panels and, in recent years, has aggressively pushed the market to make panels more widely accessible. They also carry a full line of batteries for those wanting to go off-grid.
Solar Inverter Cost By Type
Your solar panels may be good at producing electricity from the suns energy, but they are not enough on their own to power your home. Solar panels produce direct current or DC electricity. Most homes use AC or alternating current electricity. Therefore, an inverter is required to convert the energy from DC to AC so that your home can use the energy.
There are several types of inverters, each with attributes and costs to consider.
|$2,000 – $2,300|
Don’t Miss: How Much Does A Solar Farm Cost
What Factors Affect Solar System Cost
A single solar panel costs between $2.67 and $3.43 to buy and install.4 The price of the whole system is based on its capacity, measured in watts. How big a system you need will be based on how much energy you use, your roofs sunlight exposure and panel efficiency.
The amount you save will rely on several factors, including:18
- Regions sunlight exposure
Solar Panel Installation Cost
Installation costs range between 100% and 200% of the cost of the solar panel system itself. So, for example, if you purchase a 6kW monocrystallinesolar panel system for $9,000, then a solar installation company will likely charge approximately $18,000 to $27,000 for the system and the installation, combined. The installation of a larger system will naturally increase labor costs.
Recommended Reading: Do You Need A Generator If You Have Solar Panels
Solar Panel Installation Cost By Type Of Mounting System
Another component you may not give much thought to in your solar installation is the . This is what your solar panels attach to. If you have a roof installation, the mounting system type is dependent on your roof material. If you cannot penetrate the roof to install it, then a ballast method must be used. However, nearly all residential roof installations are known as a fixed mount. If you have a commercial installation, you need a tilt mount or an adjustable mount. If you have a ground installation, you have even more options. Costs will not impact your total installation very much because the racking only makes up roughly 10% of your total costs. However, the solar mount type you choose can impact how it looks and works.
|$500 – $1,000|
What Is The Average Payback Period For Solar Panels On A 3000 Square Foot Home
The average solar panel payback period is 7 to 10 years. That means that, after installing a solar energy system in your home, you can expect to see savings on your electricity bill for the next 7 to 10 years.
Keep in mind that these numbers may vary depending on where you live and what kind of sunlight your home receives. But this should give you a general idea of what to expect.
Read Also: Does Duke Energy Install Solar Panels
What Is The Cost Of A Solar Panel Installation For An Average 2000 Square Foot Home Today
The average cost of a residential solar panel installation in 2021 ranges between $18,000 and $20,000, before applying tax credits or other incentives that may be available where you live. This works out to between $2.75 and $3.35 per watt of solar installed, depending on your location and the brands of solar equipment used.
Once you take the federal solar tax credit into account, the overall cost drops to an average of between $13,320 and $14,800 – thats almost 80% lower than the cost of solar 10 years ago! Our solar panel cost and savings calculator will show you local incentives you may be eligible for to help lower the upfront costs.
Solar Panel Cost By Manufacturer
Another way to break down solar panel price data is by the panel brand. The following table was made using data from the EnergySage Marketplace and tracks the average cost of 6 kW and 10 kW solar panel systems by the brand of solar panel used in the installation project.
Table: cost of solar panels by panel manufacturer
NOTE: These ranges are system prices BEFORE the 26 percent federal tax credit for solar.
The price you pay for a solar panel brand is reflective of panel quality to a degree. For example, systems using SunPower panels see the highest average prices , and SunPower is known for producing well-made, high-efficiency products.
Interestingly, there arent that many outliers when it comes to brand pricing, and most manufacturers generally see similar cost ranges. Its important to keep in mind that when comparing system prices based on panel brands, there are so many factors aside from just panel manufacturer that impact the final system price like installer experience, location, racking equipment, inverter brand, and more.
Don’t Miss: How To Set Up A Sole Proprietorship In Georgia
How Much Do The Solar Panels Themselves Cost
So how much does an actual solar panel cost? Well, it depends on a few things: how powerful the panel is and who is buying the panels.
If you are not a solar installer and are considering doing a DIY solar panel installation on your home, you will likely have to pay retail prices for each panel. The general rule of thumb is that installers who buy in bulk pay around $0.85 per watt, while retail consumers pay around $1 per watt.
A typical solar panel ranges from 150-350 watts, so for this example well cut right down the middle and use a 250 watt solar panel.
If you are going through an installer, youre looking at around $212.50 per panel . If youre going DIY and buying panels yourself, youre looking at around $250 per panel . Keep in mind that this is before tax rebates!
Average Cost Per 250 watt Solar Panel: $212.50
Figure Out How Many Solar Panels You Need
Now that you know your average monthly electricity bill, its time to find out how many solar panels you need. In order to do this, youll need to calculate the size of your solar system in kilowatts.
To figure this out, take your homes square footage and multiply it by 1,000 . Then divide that number by 3 and 1000 . This will give you the size of your solar system in kilowatts.
For a 3000 sq ft home, you would need a 10kw solar system. However, keep in mind that these calculations are only estimates- the efficiency and cost of solar systems can be affected by factors other than size.
Recommended Reading: Can You Write Off Solar Panels On Taxes
Solar Panel Price By Cell Type
Depending on the company you contract with, you may have a choice of solar cell types. There are three main types – polycrystalline, thin-film, and monocrystalline. Of the three, thin-film solar cells have become the most common. For many homes, you may not notice much of a difference between them, but in terms of cost and total energy output, there are variations.
|Type of Cells|
|$0.60 – $1.20|
Approximate Costs Of Solar Systems After The Rebate
The range of prices in Australia below is mainly down to the quality of the hardware used in the installation. To use a car analogy , expect the lower price range to be Kia level brand and the upper cost to be a BMW level brand. Ill leave you to decide if BMWs are worth paying more for than Kias!
Approximate cost of a good quality solar system installation with Tier 1 solar panels as at November 2021 in Australia:
Update: November 2021 There have recently been major disruptions to solar panel supply , which have pushed prices of 6.6 kW systems up by about $1,000. Current prices of panels are fluctuating daily so dont be surprised if your quotes are only valid for a few days.
Note that the above assumes the use of 370W solar panels, so the final solar panel capacity may be a bit more or less than the figures mentioned above.
See Real-Time Australian Solar Pricing
The costs quoted above are based on thousands of data points. To see real-time, average prices being paid for full system installations of various capacities in your state, check out the SolarQuotes Solar Price Index.
If you want a good quality microinverter or optimiser system installed, expect to add around 20% in cost to the above price ranges.
If you want to downgrade to a reputable budget inverter , you may be able to save about $700 on these prices.
Finding The Money
You May Like: How Much Can Solar Panels Save