With growing awareness around climate change, installing solar panels on your roof does double duty: You can rest assured you’re making a contribution to converting to cleaner, renewable energy and you can potentially save thousands of dollars on energy costs.
So, should you take the plunge into solar energy? Are the energy cost savings worth it? We’ll answer these critical questions and help you decide if solar panels are right for your home.
How much does it cost to install solar panels?
Although the cost of solar panels have been steadily decreasing thanks to advancements in manufacturing, they are still very expensive. Solar panels typically range from $15,000 to $25,000, but can be as low as $9,000 and as high as $40,000. Homeowners who can’t afford to pay for solar panels upfront usually choose to finance them.
Learn about other ways to pay for solar panels.
What factors affect the cost of solar panel installation?
Two major factors come into play when determining the upfront cost of installing solar panels. Your location and what type of roof you have.
System Output Size
Depending on your energy consumption, you’ll need a system that generates enough energy to power your home, measured in kilowatts (kW). The more kilowatts your system generates, the more it will cost.
Your Location
Depending on your state, the cost of installing solar panels is higher or lower due to market prices for labor and materials and local licensing and regulatory requirements. According to Consumer Affairs, Hawaii was the most expensive state for purchasing and installing solar panels with a starting cost of $19,560 for a 6-kW system, while the most affordable was Kansas with a starting cost of $13,101.
Roof Type
The type of roof you have and the angle will play a big factor in the cost of your system. If you have a ranch house with a continuous single-level roof, panels will be easier to install. Multi-level homes with several roof heights are more complicated. If your roof is too flat, they will have to install scaffolding so the panels are angled correctly to get the most sunlight, which will add to costs. In addition, certain roofing materials like wood shingle and slate are more fragile and make installation more complicated and more expensive, while asphalt shingle, tile, and metal roofs are ideal.
What are some of the cost benefits of installing solar panels?
On top of saving money on your electricity bills, and potentially even completely zeroing out all your electricity costs, there are other ways solar panels can benefit you financially.
Tax Credits
Tax credits are an important thing to factor into your cost of installing your solar power system. The federal residential solar energy tax credit allows homeowners to claim a percentage of their solar panel installation costs on their federal tax return. If your system was installed from 2020 to 2022, you can claim 26 percent, while systems installed in 2023 can claim 22 percent.
Selling Power Back to the Grid
In some cases, if your solar power system is generating more energy than you consume, you can sell your surplus power back to the energy company. Depending on your state, the power company allows for net metering, which means they’ll pay you for any energy you send back to the grid from your solar panels. Rates, rules, and availability vary depending on your state and utility company, so check with your local provider to see if this is an option.
Home Value
Studies have found that solar panels can increase your home value by up to $6,000 per kilowatt of system size. So, if you have a 6-kW system, it can increase your property value by up to $36,000. According to Zillow research, solar panels potentially increase home value by 4.1 percent, and 80 percent of homebuyers say energy-efficient features like solar panels factor heavily into their buying choices.
Will I save money if I get solar panels?
The answer to this is, “it depends.” If your roof is in good condition, a perfect fit for solar panels, and scores high in how much UV exposure it gets, the upfront costs of installing them would be lower and the amount of energy you generate would be very high. In that case, it’s definitely worth it for you to get solar panels. On the other hand, if your home would require massive upgrades to accommodate panels and there’s a lot of tree cover around you, you won’t generate enough power to make the cost of solar panels worth it.
Another factor that comes into play is how much energy you consume. If you don’t consume a lot of energy and your energy bills are already low, solar panels simply wouldn’t be worth it for you. But a large family that uses a lot of energy may see huge cost benefits from solar.
A simple way to check if installing solar panels is worth it for your home is to search your address on Project Sunroof. This Google initiative measures how much sunlight your roof gets using Google Maps data and calculates the average cost of financing solar panels in your area. It then compares that to your average electricity bill and calculates whether you will save money from buying solar panels.
