There are a lot of people who don’t like solar energy because they feel that it is a costly affair and that too it’s a costly investment. They are right to some extent, because solar energy is an expensive way to generate energy, but the good news is that it is definitely an affordable option as well.
If you are wondering how solar energy is less costly than electricity and what would be the solar panel costs for homes then this article will answer your questions.
Solar panels cost roughly $16,000 on average, or between $3,500 to $35,000 depending on the type and model. While solar panels might help you save money on energy prices, knowing the total upfront cost of solar panels can help you develop a budget.
Average Cost of Solar Panels
The average cost of a solar panel installation in 2023 ranges from $16,870 to $35,000 after taking into account the federal solar tax credit, with an average solar installation costing about $20,020. On a cost-per-watt ($/W) basis, solar panel prices in 2023 average $2.86/W (before incentives).
Solar installations are a one-of-a-kind product; average solar panel costs might vary greatly depending on your location and the manufacturer of your chosen solar panels.
Cost of Solar Panels by State
Solar panel prices and costs will differ by state and location apart from regions with higher usage and statistically more sunny days per year will often have comprehensive incentive schemes in place already, whereas other locations in the United States may not.
Cost of Solar Panels by Type
If you are looking to go for solar panel system then you need to start knowing the various types of solar panels and which one suits your requirement. You can also compare the prices of each type of solar panel.
Monocrystalline Solar Panels
Monocrystalline solar panels (the most energy-efficient solar panel choice) typically cost $1 to $1.50 per watt, which means that outfitting a 6kW solar panel system (also known as a solar system) costs between $6,000 and $9,000.
Polycrystalline Solar Panels
Polycrystalline solar panels are less energy-efficient than monocrystalline solar panels and cost $0.90 to $1 per watt, therefore outfitting a 6kW solar panel system would cost between $5,400 and $6,000, making it a more reasonable option.
Thin-Film Solar Panels
Thin-film solar panels typically cost between $1 and $1.50 per watt, implying that a 6kW solar panel system will cost between $6,000 and $9,000. Thin-film solar panels are less expensive than their equivalents, but they take up a lot of space, therefore they’re mostly employed in industrial settings.
Solar Panel Installation Costs
Solar panel installation can range between $15,000 and $25,000. This price will vary depending on where you live, with solar electricity costing more in areas farther from the equator, such as Alaska, and less in sun-drenched areas, as well as how many solar panels you’ll need.
Factors That Affect Solar Panel Costs
The cost of solar panels is determined by a variety of factors, including your electricity usage and residence. Consider the following factors when evaluating costs:
Permitting And Interconnection
While the cost of solar permits and interconnection fees are key components of your solar energy system price, they can also be a consideration. To connect your solar energy system to the grid (known as “interconnection”), you will typically need to get a few solar permission documents and pay a fee.
There is some exciting work being done in this area to keep the prices and time lag to getting an approved hookup as low as possible – the Department of Energy’s SolarApp+ is attempting to make the interconnection process cheaper and faster for everyone.
The cost of solar panels is determined by the firm you choose. The price will vary from business to company, from the solar equipment system itself to installation expenses to add-ons, and the first step is to assess your options for the finest solar providers.
Size, Weight And Number Of Panels
When calculating the cost of solar panels, consider the size, weight, and quantity of panels. For example, when deciding how many solar panels you’ll require, you’ll need to know a few things:
- How much energy does your household consume?
- How much space does your roof have?
- How much sunlight your property receives, as well as the wattage and relative efficiency of the photovoltaic (PV) solar panels you’ll be putting in.
The size of the system you get is perhaps the most evident and crucial component in the price you spend for a solar panel installation. It’s simple: a larger system with more panels will cost more than a smaller system with fewer panels (and lower energy output).
There is, however, a Costco-like link between system size and pricing, with a larger system having a lower average $/W. It’s similar to buying food in bulk: the overall cost is higher, but the per-unit cost is lower.
Remember that while larger solar power systems may be more expensive, they will almost certainly save you more money in the long term. If you install a 10-kW solar energy system that covers all of your electricity needs, you may have to pay more out of pocket, but you’ll be eliminating a major monthly expense – your utility bill – and saving more money as a consequence.
Solar loans with no down payment and cheap interest rates are becoming more prevalent, making it even easier to purchase a solar panel system that will fully balance your electricity expenditure and optimize your solar savings.
Effect Of Type Of Solar Panels
As we have discussed above, there are three types of household solar panels available.
Monocrystalline solar panels are the highest-performing type of panel in general, costing $1 to $1.50 per watt. However, they are frequently more expensive than polycrystalline solar panels which cost $0.90 to $1 per watt.
However, because polycrystalline panels have lower efficiency, you may need to purchase more of them, so your final installation prices may not differ as much as you’d think.
Thin-film solar panels are another possibility, ranging in price from $1 to $1.50 per watt, however, they are rarely utilized in residential setups. Consider a compact thin-film system for solar panel installations on RVs and campers.
Brand Of Solar Panels
Another way to sort solar panel prices is by panel brand as the solar panels vary in quality, and the cost can be heavily influenced by the manufacturer. Although most manufacturers perceive comparable cost ranges, the greater the price, the better the quality of the solar panel.
To some extent, the price you pay for a solar panel brand reflects panel quality. SunPower panels, for example, have the highest average pricing ($22,140 for a 6 kW system and $36,900 for a 10 kW system), and SunPower is regarded for manufacturing well-made, high-efficiency products.
Surprisingly, there aren’t many outliers, and most manufacturers observe similar cost ranges. When evaluating system prices based on panel brands, keep in mind that there are numerous aspects other than panel manufacturer that influence the ultimate system price – such as installer experience, location, racking equipment, inverter brand, warranty, and more.
Efficiency Of The Solar Panels
The amount of sunlight reflected on the surface of solar panels determines their efficiency, which is ultimately converted into electrical or thermal energy. The most efficient solar panels are monocrystalline, but their cost is expensive due to their intricate manufacturing. Polycrystalline solar panels are less expensive than monocrystalline because they are easier to manufacture. Thin-film PV cells are less expensive and easier to manufacture, but they are the least efficient type of solar panel.
What Is Your Location?
Solar panel prices vary by state as a result of local quotation trends and system size variances. Because states have varied average system sizes and incentives, costs vary from state to state.
Solar installation costs vary depending on where you live, usually per state. The pricing disparity isn’t that huge, and much of the variation by region is attributable to differences in system sizes and incentives, but it’s worth keeping an eye on.
Arizona has the lowest total average cost per watt at $2.33 and Washington, D.C. has the highest overall value from the 2023 federal tax credit, at $8,866. However, as previously stated, system sizes tend to be higher in areas with cheaper prices, thus comparing a 10-kW system in Florida to a 10-kW system in Massachusetts is not always fair. Their energy requirements are simply too dissimilar.
What Type Of Roof Do You Have?
Your total solar panel costs are also affected by the quality of your home and roof. Your solar business will often charge for the difficulty of the installation, and having a complex roof will increase the cost of your system.
Installing solar on your home will be relatively easier for your installer if you have a south-facing roof that slopes at a 30-degree angle, as they can probably install all of your panels on a single roof plane that has optimal sun exposure (better, more direct sun exposure = fewer panels needed, which will lower your costs). If your roof has numerous levels, dormers, or skylights, the extra effort required to complete the project may include more equipment and installation fees.
Sola Panel System Installation And Labor
The company that does the solar installation is another element of the jigsaw. Solar installers charge different fees for their services, and the ultimate price they give for an installation is determined by factors such as your installer’s track record, warranty options, and internal procedures.
You can see how a reputable solar installer with premium warranty options can charge more for an installation project and yet make a profit.
Rebates And Incentives Might Help You Cut Your Solar Expenditures
We’ve discussed the variables that increase the cost of a solar installation, but it’s also important to consider the ways you might save with solar rebates and incentives. You can obtain money back on a solar system through tax credits, cash rebates, performance-based incentives (PBIs), and energy credits. The availability of these types of incentives nearly always depends on where you live; utilities, cities, and states all typically offer their own solar incentives to residents of their service regions.
Federal Solar Tax Credit
You can get a federal solar tax credit for installing solar panels. This implies you’ll obtain a tax credit for your income taxes, lowering your tax burden. If your solar system is new or being utilized for the first time between January 1, 2006, and December 31, 2023, you may be eligible for the Investment Tax Credit (ITC). Unless Congress renews it, the ITC will expire in 2024.
When Should You Install Solar Panels?
The qualities of your roof, such as the pitch, will also influence the cost of solar panels. Your solar business will often charge for the difficulty of the installation, and having a complex roof will increase the cost of your system.
Installing solar panels throughout the winter is not only cost-effective but also efficient. Because solar installation businesses undertake less work during the off-season, your panels will most likely be installed faster and up and running in no time.
How Do You Pay For The Installation Of Solar Panels?
Once you’ve determined the cost of solar for your specific project, you must select how you’ll pay for solar. For residential solar systems, there are three basic financing options: cash purchase, solar loan, or solar lease/power purchase agreement.
In general, a cash purchase is appropriate if you want to maximize your solar savings, have enough tax obligation to qualify for the solar tax credit, or have the funds available to pay for a solar panel system upfront.
Loan Facility For Solar Panel Systems
If you don’t want to pay the whole cost of a solar panel system up front, you still want to save as much money on your energy bills as possible, and you want to be eligible for all incentives and rebates, a solar loan is for you.
Lease Facility On Solar Panel System
If you prefer that someone else manage and maintain the system, if you are not qualified for tax advantages, or if you just want to lower and/or lock in your monthly electricity price, a solar lease or PPA is for you.