Did you know that 55% of the world’s new renewable energy is now solar?
Buying solar panels is a big investment, and you want to make sure you’re getting the best deal.
It can be hard to know what solar panel installation will cost you. There are a lot of factors that go into the price, like the size and type of your home, the brand of solar panels, and even your location.
But don’t worry. Keep reading because we’ve created an easy-to-use guide on the average cost of solar panels that takes all of those factors into account.
What Are Home Solar Panels?
Solar panels are devices that convert sunlight into electricity. They are also called photovoltaic (PV) panels. Solar panels are created with PV cells, which are made of semiconductor items like silicon.
When sunlight hits the PV cells, it knocks electrons loose from the atoms. This process is called the “photovoltaic effect.” The electrons flow through the PV cells and into wires. This flow of electrons is called a “current.”
The current flows out of the solar panel and into an inverter, which converts it from direct current (DC) to alternating current (AC). AC is the kind of electricity that powers your home.
How Much Do Solar Panels Cost?
The cost of solar panels counts on the size of the system, the efficiency of the cells, the guarantee, and other aspects. The average cost of a 6 kilowatt (kW) system is $12,000 after tax credits.
The cost per watt ($/W) ranges from $2.50/W to $3.50/W. The average price of a 12kW system is $24,000 after tax credits.
What Impacts the Cost of Solar Panels?
There’s a lot that goes into the cost of solar panels. The size of the system, the type of cells, the efficiency, and the warranty all play a role in the price. Let’s look at them in greater detail:
System Size
Maybe the most obvious factor, the size of your system will have the biggest impact on price. A larger system will cost more than a smaller one. This is because you’ll need more panels, more racking and wiring, and more labor to install it.
Remember, solar is an upfront investment. But, it will save you money on your electric bills over the long run. The larger your system, the more you’ll save.
Type of Cells
Solar panels are made with either mono-crystalline or polycrystalline cells. Monocrystalline cells are made from a single crystal of silicon. They’re more efficient than polycrystalline cells, but they’re also more expensive.
Polycrystalline cells are made from many smaller crystals of silicon. They’re not quite as efficient as monocrystalline cells, but they’re cheaper to produce.
Efficiency
Solar panel efficiency is an important metric for determining the effectiveness of a solar panel. It is measured by the amount of sunlight that hits the panel that is converted into electricity.
The average efficiency of solar panels on the market today is between 15% and 20%. However, some panels can convert more than 30% of sunlight into electricity.
The most efficient panels are made from materials such as silicon and gallium arsenide. However, these materials are also the most expensive.
As a result, most solar panels on the market today are made from cheaper materials such as polycrystalline silicon.
Warranty
Solar panels are a long-term investment, and most manufacturers offer a warranty to cover defects in materials and workmanship. The standard warranty is usually 10 to 25 years, but some companies offer warranties of up to 30 years.
This coverage can give you peace of mind that your investment will be protected in the event of a problem. In addition, many manufacturers offer performance guarantees.
These guarantees typically cover the output of the panel, and they vary from 5 to 20 years. Performance guarantees can provide reassurance that your panels will continue to produce electricity as expected.
Location
The cost of solar panels also depends on where you live. States with high electric rates and good solar incentives will have the lowest costs. States with low electric rates and weak solar incentives will have the highest costs.
For example, California has some of the highest electric rates in the country. But, it also has strong
Panel Brand and Quality
As with any product, there are different levels of quality when it comes to solar panels. Higher-quality panels will cost more, but they’ll also be more efficient and have a longer lifespan.
Roof Characteristics
The condition and orientation of your roof will also impact the cost of solar panels. If your roof needs to be replaced, that will add to the cost. If your roof isn’t well-suited for solar (e.g., it’s too shaded), that could also increase the price.
Labor Costs
Finally, the cost of labor will also play a role in the price of solar panels. If you live in an area with high labor costs, that will add to the price.
Permitting and Interconnection Fees
Some fees are specific to solar. Permitting and interconnection fees can vary depending on where you live, but they typically range from $500 to $1,000.
Solar Incentives
The good news is that several solar incentives can help offset the cost of solar panels. The most common is the solar tax credit, which allows you to deduct 26% of the cost of your system from your federal taxes.
Several state and local incentives can further reduce the cost. To learn more about solar incentives in your area, check out our Solar Energy Incentives page.
What Are the Benefits of Solar Panels?
Solar panels have a lot of benefits. They’re good for the environment, they can save you money on your electric bills, and they can increase the value of your home. Let’s look at the benefits in more detail:
Solar Panels Are Good for the Environment
Solar panels produce clean, renewable energy. That means they don’t release pollution into the atmosphere. Solar panels help to offset the emissions from fossil-fuel power plants.
Solar Panels Can Save You Money on Your Electric Bills
Solar panels offer solar energy savings on your electric bills. How much you save depends on the size of your system, the amount of sunlight your home receives, and the incentives you’re eligible for.
But, on average, solar panels can save you 20% to 50% on your electric bills.
Solar Panels Can Increase the Value of Your Home
Solar panels can also increase the value of your home. They can increase the value by more than the cost of the system. That means you could make a profit if you decided to sell your home.
How much solar panels will increase the value of your home depends on several factors, including the size of your system, the amount of sunlight your home receives, and the incentives you’re eligible for.
How Do You Pay for a Solar Panel Installation?
There are a few different ways to finance a solar panel installation. Let’s look at them now:
Solar loans
With a solar loan, you borrow money from a lender to pay for your solar panels. The interest rate on solar loans is typically lower than the interest rate on a credit card or personal loan. And, you can usually get a solar loan with little or no money down.
Solar leases
With a solar lease, you make monthly payments to a solar company for the use of their panels. The advantage of a solar lease is that it typically has little or no money down.
The downside is that you don’t own the panels, so you won’t be eligible for the solar tax credit.
Solar power purchase agreements
With a solar power purchase agreement (PPA), you make monthly payments to a solar company for the electricity that their panels produce. The advantage of a PPA is that it has little or no money down.
The downside is that you don’t own the panels, so you won’t be eligible for the solar tax credit.
Cash
Of course, you can always pay cash for your solar panels. The advantage of paying cash is that you’ll get the full solar tax credit. The downside is that it requires a large upfront investment.
Solar Panel Maintenance Costs
Solar panels require very little maintenance. The only maintenance they typically need is a yearly cleaning. That said, you will need to replace your panels every 20 to 30 years.
The cost of replacement panels is typically about 10% of the cost of the original system.
Solar Panel Warranties
Solar panels come with warranties that cover defects and performance. Most solar panel manufacturers offer a warranty of 20 to 25 years.
What Is the Average Cost of Solar Panels?
The average cost of solar panels is decreasing, making this renewable energy source more and more accessible. If you’re thinking of going solar, now is the time to do it!
Check out our blog for more articles like this one that will help you make the best decision for your home and wallet.
And when you’re ready to take the plunge and start installing solar panels, remember to shop around for the best deal on solar panels—you won’t regret it!
