How much do solar panels cost?
The good news for homeowners is solar panel costs have fallen considerably in recent years. Most homeowners who buy solar panels typically see a return on their investment in less than 10 years. To give you an idea of how much solar panels and installation costs, we analyzed data of installations in California last year.
The table below shows the average price paid for popular residential solar system sizes. The table also shows the cheapest price paid and the most expensive, highlighting the vast difference in the prices installers charge
The costs include solar panels, inverters, permits and labor to install the system.
|Solar panel system size||Cheapest price||Average cost||Most expensive price|
However the figures do not account for federal tax credits, rebates and state tax credits . Federal tax credits may cover up to 30% of the cost of your solar system so the real cost for your system is likely to be much lower.
How do I use tax credits and incentives to reduce the cost?
If you buy and have your solar panel system installed before the end of 2019 you can claim 30% of the cost as tax credit.
This amount is taken directly off your tax payment which essentially means your solar panels cost 30% less than the price you paid as you are able to claim this money back.
For example, if your solar system cost $10,000 then you can claim $3,000 off your tax payment. Essentially that means it actually only cost you $7,000 to go solar.
You can also reduce the cost further with rebates, state tax credits and incentives. All together this can reduce the cost of your solar panels by 50%.
What about solar prices in the future?
The cost of solar panels has plummeted by over 70% in the last few years due to advances in the technology and increased demand.
While solar costs continue to fall, the end of the 30% tax credit in 2019 means that households will be better off installing soon to cash in on the 30% reduction in tax payment before it ends.
How do I make and save money with solar panels?
The average US house saves over $25,900 with solar panels. Going solar allows you to significantly reduce your residence’s utility bill as you are generating free electricity from the sun.
In some states, any electricity you generate that is in excess of the amount you use in your home can be sold back to your utilities company, who will pay you for it. Net Metering rules in most of the United States mean your net electricity costs can be reduced to zero, but reduced no further.
The map below shows the average monthly savings in different parts of country:
How do I find the best price for my system?
It is always best to get at least 3 or 4 quotes from solar installers to know that you are getting the best deal. As the chart at the top of this page shows, the price people pay for solar panels varies dramatically. This is often the result of households failing to compare enough installers to find the best price.
Many people often assume that the large national installers offer the best price. However, many local state installers offer very competitive installation costs. We recommend always comparing both national and local installers.
You can complete the form at the top of this page to compare prices of trusted local and national installers to find the best price.
What if I can’t afford the cost of solar panels?
Buying your solar panels outright delivers the best return on investment.
However for households who do not have the cash available to buy outright, there are other options available such as leasing your panels or having them installed for free under a PPA agreement.