Solar Economics – How Much Do Solar Panels Cost?
HOW MUCH DOES SOLAR COST?
- On the type, size and pitch of your roof. Steeply-pitched Spanish tile? Flat, tar-paper? Gentle pitch, shingles?
- You own a hot tub and electric car? Your neighbor doesn’t? Different energy needs!
- Rebates and incentives vary dramatically from state to state.
- Cost of solar panels also varies, depending on efficiency and design.
There is no typical system. Try our online estimate tool to get a rough idea. Follow that up by requesting a detailed price estimate (sign up here).
All this being said, the average price to install solar as of 2013 was $4.72 per watt, and an average-sized solar panel system is about 5 kilowatts. Those installation costs vary dramatically, though — the same size system costs between $3 and $7 per watt depending on where you live. So although it’s not a helpful ballpark, you can expect a turnkey solar system to cost anywhere from $10,000 to $35,000.
But this is before rebates and incentives. Federal, state and local incentives often bring that price tag down considerably, and there are enough options for incentives that solar systems can pay for themselves in just a few years.
Here’s an infographic on the average cost of solar by state in the U.S. In places with multiple incentives, we see homeowners go solar for as little as a few thousand dollars. Solar purchase power agreements (solar PPAs) and solar lease options create a way for homeowners to go solar for little or no money down. (More on this below.)
HOW TO BRING DOWN THE COST OF SOLAR PANELS
Be sure to get a per watt price
(instead of a total project price) so you can easily compare quotes. If you’re leasing or considering a solar power purchase agreement (PPA), the pricing is a bit more complex. With these, you’ll look at your total spend for the lifetime of the agreement, as well as your short- and long-term return on investment.
Note: It’s usually wise to get pricing on all your options for buying solar panels, so you can compare the return on investment.
Federal Solar Incentives
Perhaps the single best incentive for installing solar is the Federal Solar Tax Credit – which gives you a tax credit worth 30% of the out-of-pocket cost of your solar system. This rebate is a reduction of your tax obligation — it’s a credit, not a deduction. It’s as good as cash and can be rolled over if you don’t have that tax liability. Note, if there is a rebate provided by a utility to a homeowner as an inducement to install solar panels, then the basis of the solar equipment is reduced by the amount of the rebate.
State and Local Incentives
State and local incentives vary widely, change frequently, and can sometimes go all the way down to the ZIP-code level. The best way to find out what incentives are available in your area is to sign up with , and we’ll include detailed information on the incentives currently available to you in your solar estimate.
We negotiate great deals on solar with top-rated installers, then help you pick the one that’s right for your home. Even a few cents off per watt can mean hundreds, even thousands, in savings! Sign up to get your free, no obligation cost estimate from us – then comparison shop. Or, start with our online estimate tool.
Other financing options
Even with rebates and incentives, there can still be a considerable cash outlay. However! Many people who finance solar with a home equity loan find that their monthly electricity savings are immediately greater than their monthly loan payment. A home equity loan for solar can be a way to start saving from day one.
THE FINANCIAL BENEFITS OF SOLAR
Solar will reduce your electricity bill. When your system is producing more power than you are using, you sell that power to the utility company. Your meter actually spins backwards!Stabilize your monthly expenditures
Since 2005, U.S. electricity rates for residential customers have grown by more than 25 percent, and the utilities show no signs of stopping these rate increases. Utilities often raise rates in the name of funding big, new energy projects; if those projects are even vaguely green in nature, they charge a premium. Keep more of your hard-earned money by going solar. Whether you buy or lease, your electricity costs are stabilized.
A 2011 study by NREL (National Renewable Energy Lab) found that homes with solar panels sold 20 percent faster than non-solar homes and fetched a 17% higher asking price. That’s $17,000 for a modest $100,000 home, $34,000 for a $200,000 home and so on. See the table below.Get a positive return on your investment
Since 2005, U.S. electricity rates for residential customers have grown by more than 25 percent, and the utilities show no signs of stopping these rate increases. Utilities often raise rates in the name of funding big, new energy projects; if thoset projects are even vaguely green in nature, they charge a premium. Keep more of your hard-earned money by going solar. Whether you buy or lease, your electricity costs are stabilized.