How Much Do Solar Panels Cost & Are They Worth It?

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Solar panels have become a popular way for homeowners to save money and do their part to protect the environment. Many people want to know how much solar panels cost and if they’re worth the investment. 

The cost of a single solar panel can range from $4,000 to $16,000. Since you need other equipment for your solar panels to work, the total fees for installing a solar panel system in your home can cost between $10,550 and $28,000. The savings you can get from solar panels make them worth it.

In this article, we’re going to look at the average costs of solar panels, solar panel systems, and reasons why solar panels are worth it. 

How Much Solar Panels Cost- Are Solar Panels worth it
Are Solar Panels Worth the Cost

How Much Solar Panels Cost?

In 2020, the national average to install an average-sized system can range from $10,085 to $28,000. An average price is around $18,500, which is a 6kW system. 

The cost per watt using solar panels ranges from $2.38-$3.50. These values include the 26% federal tax credit.

Individual panels can cost $0.40 to $1.10 per watt, depending on the solar panel brand. Panels are priced by watt rather than total cost.

To figure up the total cost, you can multiply the watt’s value by the panel’s wattage. This cost does not include the price of installation or the system needed to run the panels.

You can use a solar calculator to get an accurate estimate of how much your system will cost. This program will calculate electricity usage, roof direction, location, and other crucial factors.

Factors Affecting Price of Solar Panels

The final cost of your solar panel system will vary by multiple factors, including the brand of solar panels, where you live, and the size of your system. Residential solar panels range in size:

  • 3kWh – 3,6000 kWh to 4,800 kWh/year
  • 5kWh – 6,000 kWh to 8,000 kWh/year
  • 10kWh – 12,000 kWh to 16,000 kWh/year

Location

The area where you live can have a significant impact on the cost of your solar system. How much sunlight your location gets can affect system output, which decides how many modules you’ll require. The more you need, the more you’ll spend.

The availability of companies that can install your system can also affect costs. When there’s less competition, the prices can be higher. 

Electricity Usage

Your current electric spending habits is one of the best ways to figure out if you can save money by installing solar panels and a system. 

Analyzing your electricity usage helps you determine the size of the solar system you’ll need, so you don’t end up spending more or less than you need per unit.

An average home uses around 10,850 kWh a year, which equals around 900 kWh a month. Your solar system should be able to generate enough power to reduce or eliminate your electric bill.

Equipment

The equipment needed by the company for a solar system to operate correctly can vary in price depending on its fees and the brand of equipment. 

Inverters

In addition to solar panels, you’ll also have to purchase inverters, racking equipment, solar batteries or a grid connection, and performance monitoring. 

The different types of power storage and inverters can fluctuate in costs based on the type of inverter. The inverter transfers the direct current power (DC) from the sunlight and turns it into (AC) alternating current, which powers your home.

Racking

You also have to purchase racking, which is how your solar panels mount to your roof. There’s also ground mounts and solar carport racking. These racks help your solar panels rest at a 30 to 50-degree angle. 

There are fixed or track mounts, which vary in price. Track mounts adjust to the sun’s position, so they cost more than fixed racking, which keeps the panels stationary in one place.

Monitoring Systems

If you’re going to be using solar panels, you’ll need a way to track your hourly electrical production. You can use your monitoring system to watch your system’s performance.

You can spot issues so you can tweak your system to run correctly, saving you money, and improving productivity. Which system you choose will determine your price point. 

On-site monitors are installed with your panels. Remote monitors let you access your system through the cloud. You can track your performance online.

Energy Storage

Your solar system requires a way to store the energy your panels collect. The process is called net metering. Many states have net metering when you store your converted energy in the electrical power grid. 

Solar-plus-storage, or solar batteries, are usually lead-acid or lithium-ion and can retain some of your generated power instead of putting it into the power grid. 

Lithium-ion batteries are the most popular choice, but they are more expensive than lead-acid storage options.

Installation of Solar Panels

Most people cannot DIY solar system installations. It’s easier and safer to let experts set up your system. 

You should estimate 20% of the gross total for your system to go towards labor. This small fee pays for itself in warranties and enhanced performance. 

Affordable Options

Some states offer rebates for low-income households, so you can still afford to install a solar system. These programs do not give you solar panels for free, but they will reduce the cost drastically. 

In most locations with these programs, the grant would cover the cost of installing the solar system on the roof. But the homeowner will still face some expenses. There’s also on-bill repayment plans, which allow you to pay back the cost of installing a system by adding the charge to your electric bill. 

Low income means the family income is at or less than 80% of the area median income (AMI). States that offer low-income programs include:

  • California
  • Colorado
  • Connecticut
  • Hawaii
  • Illinois
  • Massachusetts
  • Minnesota
  • New York
  • Washington D.C.

Property Assessed Clean Energy (PACE) Financing Programs

PACE or Property Assessed Clean Energy financing programs let local governments help with financing for energy efficiency upgrades such as solar panel systems.

Currently, 17 states, including Washington, D.C., participate in PACE programs. These states are as follows:

  • California
  • Colorado
  • Texas
  • Arkansas
  • Florida
  • Georgia
  • New York
  • Vermont
  • Connecticut
  • Maryland
  • Maine
  • Missouri
  • Minnesota
  • Wisconsin
  • Ohio
  • Michigan

PACE legislation currently exists in 37 states. These include the 17 states we’ve mentioned, as well as:

  • Oregon
  • Nevada
  • Utah
  • New Mexico
  • Wyoming
  • Louisiana
  • Oklahoma
  • Illinois
  • Kentucky
  • North Carolina
  • Virginia
  • New Jersey
  • New Hampshire
  • Massachusetts
  • Rhode Island

Why Solar Panels are Worth It?

A common reason that many people consider switching to solar systems is that you can often get incentives, such as tax credits, reduced electrical bills, getting money back, and other incentives.

Investment Tax Credit (ITC)

If you’re planning to install solar panels, 2020 and 2021 is the best time to do it. Homeowners who go solar in 2020 will be eligible for the 26% solar panel. By the beginning of 2021, this credit will drop to 22%, and it will be unavailable by the end of 2021.

State Tax Credits

Your state of residence may also offer tax credits or rebates. States currently offer tax credits or rebates include:

  • Arizona
  • Colorado
  • California
  • Hawaii
  • Connecticut
  • New Jersey
  • New York
  • Massachusetts
  • Maryland
  • South Carolina
  • Pennsylvania
  • New Hampshire
  • South Carolina

Performance-Based Incentives (PBI)

Some states, including California, New York, New Jersey, Washington D.C., and Massachusetts, offer performance-based incentives (PBI). These programs give you extra money each year for the energy your panels produce. Homeowners get paid over some time with a flat rate for each kWh of energy.

Local Rewards

Some states, including Texas, come from local governments and utility companies. Check with your county and state utility departments to see if there are options for you.

In Closing

The cost of installing a solar panel system can seem steep and range from $10,550 and $28,000. Depending on your location, you may receive rewards or incentives for using solar systems, helping offset the costs. You’ll also see significant savings on your electrical bills. We hope we’ve answered how much solar panels cost and if they are worth it.

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