How much do solar panels cost? 6 Tips for Managing Your Initial Investment Costs for Residential Solar Power
6 tips for managing the initial investment costs of residential solar energy.
Claim your Federal Investment Tax Credit (ITC)
Apply for the state, local, or utility incentives and rebates
Take advantage of financing options
Benefit from lower utility bills
Equity derived from increasing home market value
Save with net metering and PPA agreements
How much do solar panels cost? An overview
How much is the financial investment in a solar home energy system? The cost of affordable solar panels is only part of the equation. A complete answer to this question depends on multiple factors: What size solar system is required to meet your home's energy demand? What are the local utility rates? What type of solar panel do you want? Will the solar system require backup battery storage or will it be connected to the grid? What type of shelving is required? We will cover these answers below. For an in-depth look at solar home systems, be sure to read our Ultimate Guide to Solar Power for Homes.
The total cost of a system generally depends on its size. The size of a system is determined by a home's energy demands, the amount of available roof space, and the regional solar profile (how much solar power is available).
For example, the average home energy consumption in the US is around 909 kWh per month or around 11,000 kWh per year. This varies by region: in Texas, the number is closer to 1,200 kWh / month, Utah hovers around 800 kWh / month. and California is closer to 560 kWh / month. Under average conditions, a 5 kW (5,000 watts) solar power system generates between 435 kWh and 700 kWh per month.
If your goal is to fully offset your home's energy use with solar power, a 5 kW system might work well in California, but it might be too small in Utah. In Texas, a 10 kW system will most likely be required to fully offset the energy demands of homes.
When you receive a quote from a professional installer, make sure it covers everything from solar panels to installation. The total price should include solar panels, DC to AC inverter (s), wiring and all electrical components, a roof mounting system for panels, approval of permits and paperwork, and the cost of installation (assuming contractor solar installs solar energy).
Keep in mind that the cost of a solar energy system for your home depends mainly on the size of the system. To some extent, there are ways to save on system hardware. But while solar panels can vary in cost, the quality of the panel's construction dictates the amount of energy produced. Simply put, cheaper solar cells will produce less energy. With solar power, especially with panels, you get what you pay for.
There are three main types of solar panels that are used in home solar energy: monocrystalline, polycrystalline, and thin-film.
Monocrystalline solar panels are considered the most efficient at converting the sun's renewable energy into electricity and have an efficiency rating of 15-20% +/-. Therefore, a monocrystalline system requires fewer panels and less ceiling space. Also, monocrystalline panels are more efficient in hot climates than the other two types of panels.
Polycrystalline panels are a less expensive alternative to monocrystalline panels due to the efficient manufacturing process that creates multiple crystals of silicon (hence "poly"). Although less expensive than monocrystalline ones, these panels lose some efficiency in hot weather and have an efficiency rating of 13-16% +/-. For many homeowners, the slight decrease in efficiency may not justify paying a higher cost for monocrystalline.
The cheapest solar panels are called "thin film", so named because the "panels" are made in rolls of a thin, flexible black film. The mass production of thin-film panels has a much lower cost than any of the crystalline solar panels. As you might expect, the lower price reduces the efficiency of the panel. Thin-film panels are around 9% +/- and as such require at least twice the roof space that crystalline solar panels require.
Both types of crystal panels can be mounted using the same shelving system. A 5 kW crystalline solar power system requires approximately 400 square feet of unobstructed roof space. Thin-film shelving is much less expensive because the panels are so lightweight. However, the savings from lower installation costs can be offset by less power generation and a larger required ceiling area.
Your professional solar contractor can explain all the nuances of a home solar system and design a custom system for your home that meets your demands. A solar installer will also handle the necessary permits and paperwork while helping you take advantage of all the incentives and financing options available.
