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20KW Commercial Solar System: Cost Guide. 20000 kwh solar system

20KW Commercial Solar System: Cost Guide. 20000 kwh solar system

    What Do Solar Panels Cost and Are They Worth It?

    Consider solar panels for your home if you have a high utility bill, live in a prime location and qualify for tax breaks or other savings.

    Lauren Schwahn is a writer at NerdWallet who covers debt, budgeting and money-saving strategies. She contributes to the Millennial Money column for The Associated Press. Her work has also been featured by USA Today, MarketWatch and more. Lauren has a bachelor’s degree in history from the University of California, Santa Cruz. She is based in San Francisco.

    Tommy Tindall Lead Writer | Consumer debt, saving money, gig economy

    Tommy Tindall is a personal finance writer who joined NerdWallet in 2021, covering consumer debt, practical ways to save money and the gig economy. Before NerdWallet, he worked on the marketing and communications team at Fannie Mae. Today, Tommy strives to make the topic of money approachable for all. His work has appeared in The Washington Post, The Associated Press and on MarketWatch. Tommy is based in Bel Air, Maryland.

    Courtney Neidel is an assigning editor for the core personal finance team at NerdWallet. She joined NerdWallet in 2014 and spent six years writing about shopping, budgeting and money-saving strategies before being promoted to editor. Courtney has been interviewed as a retail authority by Good Morning America, Cheddar and CBSN. Her prior experience includes freelance writing for California newspapers.

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    The rising cost of electricity from traditional sources and government incentives to go green make the idea of installing solar panels more attractive for many homeowners.

    But the true cost of solar panels, and whether they’ll help you save money. depends on a few key factors.

    How much do solar panels cost for homes?

    On average, solar panel installation and the system together can run from 15,000 to 25,000, according to the latest information from the Center for Sustainable Energy. Home services booking site Angi bumps that up, putting the normal range for solar panel installation in the U.S. from around 18,000 to 35,000 based on its database of completed projects.

    Before you make the leap, learn how your electric bill. location and incentives can impact your wallet over time. Here are five steps to take to determine whether you’ll save more than you spend on solar panels.

    Review your electric bill

    Solar panels generate their own power and can therefore greatly offset your monthly electricity bill. if not eliminate it. The higher your bill, the more likely you’ll benefit from switching. But be aware that electricity rates and usage — the main charges on your statement — are volatile.

    If a utility’s electricity fluctuate, so could the amount of savings, says Garrett Nilsen, deputy director for the U.S. Department of Energy’s solar energy technologies office. Similarly, if energy consumption changes, the amount of savings can also vary.

    Electricity rates vary by location. The national average is about 15 cents per kilowatt-hour, according to year-to-date 2022 data from the U.S. Energy Information Administration [0]

    Visit the EIA website to view the most recent per state.

    Evaluate your sunlight exposure

    sun means more energy produced and a greater potential to save with solar. Certain states, like Arizona and California, average more sunlight hours per day.

    Your home’s orientation toward the sun, the amount of shade it gets, and its roof type also affect a solar system’s output. You can estimate the efficiency of panels on your home using this solar panel cost and savings calculator from SolarReviews.

    Estimate and compare the cost of solar panels for homes

    The brunt of the expense with solar panels is in installation and the purchase of the actual panels.

    Minimal long-term costs can make up for the upfront costs. “Most systems don’t require much maintenance and are designed to last for 20 years or more with little change to the amount of electricity produced,” Nilsen says.

    When calculating the total price, consider how much energy you regularly consume — your usage is listed on your monthly utility bill — and what size system will generate the amount needed. Some tools, like the SolarReviews calculator, estimate the system size for you.

    With installation, an average residential 5-kW system costs from 3 to 5 per watt, according to the CSE, which results in the 15,000 to 25,000 range. That cost is before any tax credits or incentives.

    If you know your current energy usage, you can calculate how much you’ll need to pay for solar panels.

    Then comparison shop for solar panels as you would other big-ticket items, such as a car or TV, says Vikram Aggarwal, CEO of the solar marketplace EnergySage. Some companies reduce installation costs through rebates and other programs.

    Aggarwal recommends getting quotes from three to five contractors. EnergySage compiles solar companies’ customer reviews, certifications, Better Business Bureau profiles and other information to help you find reputable providers.

    Take advantage of government incentives

    A federal law passed in 2022 incentivizes consumers to make clean energy enhancements, like installing rooftop solar. A substantial update to an existing energy-related tax break that was set to expire at the end of 2023, the Residential Clean Energy Credit allows taxpayers who have solar (and other approved clean energy equipment) installed to recoup 30% of the cost in the form of a federal tax credit.

    What that means: A solar setup that costs 15,000 would yield a 4,500 credit (30% of 15,000) that you can take advantage of come tax time to reduce any federal taxes owed. The credit isn’t refundable though, meaning any money left over after your full tax bill is covered won’t be paid out to you. But you may be able to apply the remainder of the credit toward taxes owed in subsequent tax years.

    The credit applies to eligible equipment installed after Dec. 31, 2021, and remains in effect at the 30% rate through 2032. It decreases incrementally after that.

    Depending on your state, you may receive extra incentives like cash back, property tax exemption, waived fees and expedited permits. In some states, homeowners with solar panels can sell excess power to their local utility companies. Look up credits available in your state by reviewing the database of state incentives for renewables and efficiency.

    Keep an eye on trade policy

    Changes in government trade policy also impact prices. There have been varying tariffs on imported solar cells and panels over the last decade affecting costs and supply. For example, tariffs resulted in a 16-cent-per-watt increase for the average consumer in 2018, which translated to an overall increase of 960 for a 6-kW system, according to EnergySage.

    President Biden placed a two-year pause on new tariffs on the solar industry in June 2022.

    Is solar panel installation right for your home?

    If you live in an area with high energy rates and a suitable solar rating, and if you can afford the initial investment, it’s worth installing solar panels on your home while the 30% tax break is in place — for the good of the environment and your wallet. But don’t expect to eliminate your power bill overnight.

    If you decide to purchase solar panels, shop around and search for incentives. Consider financing with a solar loan if you’d rather spread out the cost over time. Keep in mind that you don’t have to buy solar panels — you can lease them, too. Leasing offers a lower upfront cost, though since you don’t own the panels, they won’t raise the value of your home, and you may not be eligible for incentives.

    Going solar isn’t the only potential way to save money. Learn more about what you can do to lower your bills.

    kW Commercial Solar System: Cost Guide

    The 20kW commercial solar system suits a wide range of medium-sized factories and commercial shops.

    You can expect to pay around 19,332 for a 20kW system installed. can vary wildly depending on the quality of panels you install and the company that quotes the job.

    The above price is after you have received your government rebate (7,022 for 20kW systems) and does not include the price for battery backup.

    Rebate on 20kW solar system

    Under the federal government’s solar rebate programs, commercial solar systems generally receive more rebate than residential systems. This is because commercial systems are bigger and generate more solar energy daily.

    Commercial solar owners can receive these rebates by claiming their Small-scale technology certificates (STCs). The more of these certificates you have, the more rebates you’ll receive for your solar system.

    The 20kW commercial solar system enjoys some generous rebates. However, the total amount of rebates you’ll receive will largely depend on your location.

    This is because the STCs are given depending on the sunlight intensities of your area. Therefore, states with higher sunlight intensities tend to receive more rebates than those in low-intensity states.

    This program, which started in 2017, is being phased out by 1/15th each year and it’s set to end by December 2030.

    Here’s a rough estimate of how much rebate you can expect for your 20kW solar system.

    StateSystem SizeZoneZone ratingRebate

    In some of these states, you can also apply for the state rebate program and supplement the federal rebates. The most popular states with incentive programs include Victoria, New South Wales, South Australia and Western Australia.

    Feed-in tariff on 20kW solar system

    Like the rebate amounts, the total feed-in tariff income you’ll receive will largely depend on your location. But while the rates might be different, the feed-in tariff is one of the best ways to improve the ROI of your 20kW commercial solar system and increase your earnings.

    This scheme allows you to receive credits or incentives for selling back your surplus electricity to the grid. Your energy company then pays you per kilowatt, for all the surplus power you send to the grid.

    On average, most utility companies will pay you feed-in rates of between 8c – 20c per kilowatt. However, these rates could go as high as 29c during peak hours and 7c during off-peak hours.

    Since the 20kW solar system generates so much power during the day, you can be sure of substantial incentives from the feed-in tariffs.

    Keep in mind; there are no fixed feed-in rates. Different companies offer different feed-in rates depending on your location in the country. You should therefore strive to get the best rates for your exported solar. Visit this page for more details on the feed-in tariff rates for your state.

    How long until a 20kW solar system pays for itself?

    Around 3 – 5 years. One of the main benefits of investing in commercial solar systems is their quick payback period. Your 20kW commercial solar system usually offsets its initial investment costs by the fourth year. This gives you enough time to enjoy 20 – 25 years of savings from ‘free energy’.

    However, several factors affect how fast your 20kW commercial solar system can pay for itself. These include your location and your energy consumption habits.

    As earlier mentioned, the price of 20kW solar systems varies between states because of the different rebates offered.

    Therefore, in states where their cost is higher, solar systems tend to have a longer payback period than states where panels are cheaper.

    Businesses that consume more energy during the day also record faster payback periods. You should, therefore, consume more of your generated power to improve the system’s ROI.

    How many panels will I need for 20KW?

    Around 68 solar panels. The 20kW commercial solar panel is quite big compared to most residential solar panels. It, therefore, uses a lot more panels. The actual number you might need for your system will depend on the size (rating) of panels you choose.

    The formula for this total simply requires you to divide your system’s total size (20,000W) by the size of solar panels you choose.

    If you choose solar panels with higher energy ratings, e.g., 300W, 330W or 350W you’ll need only 67, 60, and 58 panels respectively. However, with lower-rated panels, e.g., 250W, 260W, 275W, you’ll need 80, 77 and 73 solar panels respectively.

    How much roof space is needed for a 20kW solar system?

    Assuming you’re using the average 1.7m x 1m solar panels, you’ll need anywhere from 98.6m 2 to 136m 2 of roof space. This is assuming you use the 58 – 80 solar panels from the 250 – 350W.

    Your roof shape, condition and orientation may also demand more roof space than expected. Get an expert installer to assess how much space you’ll need.

    You might also have to remove some of the things mounted on your roof to create more space. Homes with flat roofs may also need more space as they have to make room for tilting frames.

    All things considered; you may end up requiring around 150m 2 of roof space.

    Battery storage for 20kW solar system

    When looking to maximize on your 20kW commercial solar system, investing in solar battery storage is a good option. Solar batteries ensure that your business can consume nearly all of its generated energy, thus increasing your savings.

    Battery storage is also crucial during power blackouts and cloudy or rainy days, as it ensures your business operation doesn’t stop.

    What Battery size do you need?

    If you’re going to invest in solar batteries, you need to know how to size one correctly to suit your solar system.

    The good news is most commercial places of business use a bulk of their energy while the sun is shining. This is different for residential who need to store most of their power for the night.

    A 20kW system produces 75kW of power during the day, you might need to store 30-40 % of that for use before the sun comes up and after the sun goes down.

    You’ll need to store 25-30kW of power which is 2 x 14kW Tesla Powerwalls. Each costs 12,500.

    Do I need a solar battery?

    Because the cost of solar storage batteries is still very expensive in Australia you might be best oversizing your system and taking advantage of solar feed-in tariffs.

    This allows you to use the grid as your own personal virtual battery.

    Having a solar battery may be worth it for businesses that need 24/7 power to run. It could also work if you want to go off-grid – but with a larger battery.

    kW solar inverter for commercial solar

    For a 20kW solar system, you’ll only require 1 – 2 inverters depending on the installation design and your location. You’ll have to choose between one 20,000W inverter or two 10,000W inverters.

    The inverter size should always be as close to the size of your commercial solar system as possible.

    However, you should consider your location before settling on an inverter size. If you’re in an area with a lot of sunlight, stick to a 20,000W inverter or a slightly bigger one due to the high energy generation.

    If you’re in an area with lower sunlight intensity, an inverter slightly smaller than 20,000W should work. This is because the solar system’s overall output is lower.

    Most installers recommend having two inverters for better efficiency and to ensure that a fault in one inverter doesn’t affect your entire energy production.

    What is the daily output of a 20kW solar system?

    A typical 20kW commercial solar system in Australia generates anywhere from 62kWh to 84kWh daily. This output varies daily depending on your location and the time of the year.

    Different states across Australia receive varying power output from the 20kW solar system because of the varying sunlight intensities. Cities with higher sunlight intensities like Brisbane and Perth generate more power than Sidney and Melbourne.

    Another key factor that affects your 20kW solar systems output is the orientation and angle of solar panels. North-facing panels are the most efficient in Australia, while panels facing the East-West direction lose efficiency by nearly 20%.

    Solar panels inclined at around 30 degrees also generate more power than panels on flat roofs. Look out for shading as well. It reduces the efficiency and overall output of solar panels.

    Here’s a rough estimate of the daily output from a 20kW commercial solar system in different cities across the country.

    CitySolar Output

    What is the monthly output of a 20kW solar system?

    Just like the daily output varies, the overall monthly output of your 20kW solar system fluctuates. The average monthly output ranges between 1,860kWh – 2,520kWh depending on your state in the country.

    The overall output of the solar panels is usually highest during summer, October to February, because the days become longer and the sun is highest in the sky.

    In winter, June through to August, the solar panels monthly output is the lowest. This is because the days become shorter and the sun is much lower in the sky.

    How much money can I save with a 20kW commercial solar system?

    With a well-installed 20kW commercial solar system, you can save up to 10,000 every year. Since it generates so much power daily, you can save money by consuming the generated power, storing it for later use, and even the feed-in tariff.

    In general, how much you save with commercial solar systems depends on your energy consumption and the current cost of electricity.

    The more power you consume from your solar systems, the more money you save. This also includes the incentives you receive from sending your excess power to the grid.

    Additionally, the rising electricity costs in the country plays a key role in increasing your savings. (We count your savings as the total amount of grid-power that you avoid using by going solar).

    How do I calculate my solar savings?

    Here’s an easy way to help you calculate how much savings you can have annually.

    We’ll take a business in Brisbane which consumes about 80% of its power during the day. The electricity cost in Brisbane is around 28c/kWh, and the average feed-in rate is about 10c/kWh.

    With the average daily output for a 20kW commercial solar system in Brisbane being 80kWh, this business consumes 64kWh daily. This converts to around 23,360kWh annually.

    In savings, this becomes: 23,360 x 0.28 = 6,540 annually.

    The surplus generated power is 16kWh daily or 5,840kWh annually. If this is sent back to the grid, the business also receives: 5,840 x 0.10 = 584 in feed-in tariff income.

    Your total saving for the year therefore becomes: 6,540 584 = 7,124.

    With such savings, you’ll considerably cut down your power costs and reliance on power from the grid.

    Do regular solar companies install commercial systems?

    Yes, most solar companies do. Anything above 50kW will need a commercial solar installer for safe and accurate installation. Most local installers can also complete the job comfortably.

    However, the Australian market is flooded with installers and solar companies, making it harder to find legitimate and qualified installers.

    You should, therefore, be extra cautious when choosing a company to complete your commercial solar installation.


    There are three main ways in which solar panels can reduce your power bills. The main way is through reducing your reliance on power from the national grid. With businesses spending nearly 70% of their power during the day, their monthly bills will be drastically low.

    Solar power also saves you money through the feed-in tariff scheme and the federal tax credits.

    Usually, no. The income from feed-in tariffs, based on residential solar systems is not taxable in Australia. However, feed-in tariffs income may be taxable if the solar system is on a commercial building.

    So, if you use your building to make a profit of any kind, then your feed-in income is taxable. Nevertheless, this law is still quite vague and so, make sure you consult an expert before ruling out the taxes.

    Different commercial solar systems occupy varying spaces depending on their size. For instance:

    • The 20kW commercial solar system occupies around 160m 2
    • The 30kW commercial solar system occupies around 250m 2
    • The 50kW commercial solar system occupies around 400m 2
    • The 100kW commercial solar system occupies around 750m 2

    No! Living off the grid is completely legal in Australia for both residents and businesses. You’ll, however, need a big solar system and battery storages to ensure adequate power supply, and water tanks for storage.

    Author: Ben McInerney is a renewable energy enthusiast with the goal of helping more Australians understand solar systems to make the best choice before they purchase. Having an accredited solar installer in the family helps give Ben access to the correct information, which allows him to break it down and make it easily understandable to the average homeowner.

    Are Solar Panels Worth It?

    Here’s the breaking news in case you missed it: solar is taking off. In the past decade, the expansion of the residential solar energy market has been nothing short of astonishing. Though it’s still early days, all key market metrics point to continued growth for the coming years. Like many homeowners, you may be asking yourself if you should invest in solar panels.

    A vision of the future: your solar neighborhood (Photo credit:

    Nobody wants to hear “it depends”, but that is the reality when it comes to solar. So we decided to write a guide to cover this topic with the level of detail it deserves. We will cover quite a few topics and go through a number of examples in this guide. At the end, we hope you will have the answer to the question are solar panels worth it with respect to your particular case.

    “Today, solar is still something that folks are not used to seeing,” explains Jigar Shah, solar industry expert and SunEdison founder. “In ten years, everyone will have solar on their roof. In addition to saving more money, you want to be part of the ‘early mass market.’ You will get better service and more bragging rights than if you are the last one on the block to switch.”


    Answering the question of whether you should go solar requires an in depth look at various factors that affect the profitability and feasibility of solar power. To make it easier, we have broken down this guide into discreet sections so that you can navigate more easily.

    What Is The Solar Picture Today?

    Electricity Cost Comparison: Solar Versus Utility

    Other Solar Considerations: Roof, Shade, Orientation

    Do Solar Panels Increase The Value Of My Home?

    Conclusion. Are Solar Panels Worth It?

    Here are the top takeaways:

    ✓ Don’t fixate on latitude and weather conditions where you live: utility rates and incentive programs can make a huge difference, making solar profitable in many northern locations that aren’t sunny year round.

    ✓ Determining the cost per kilowatt-hour at your location is a bit tedious, but only an apples-to-apples comparison can give you the answer you need (we also make it simple with our calculator, Discover).

    ✓ When it comes to solar power, think like an investor, not as a utility customer. You have to look at the cost/savings over the lifetime of your solar panels.

    ✓ A solar lease may look like a good option for going solar, but in all likelihood, a solar loan is an even better option.

    ✓ It’s never too late to start charting your solar strategy.


    While solar panels are still a rare site in much of the United States, there are a few states where solar energy is taking off. Take a drive around Pasadena, California or down the streets of Fair Lawn, New Jersey, and you are bound to come across solar panels. Rapidly falling solar equipment and generous incentives, like the 30% federal investment tax credit for residential solar, have helped make this a reality.

    “In 2006 there were only 31,000 U.S. homes with solar,” according to Alexandra Hobson, Press Officer Communications Manager at Solar Energy Industries Association (SEIA). “Today, there are nearly 1 million and that number is only going to grow.”

    Homeowners, frustrated by their ever increasing utility bills, are looking for an alternative that will save them money in the long run. They are also looking for ways to help the environment by producing their own clean energy. Jim Jenal, CEO of the solar company Run on Sun in Pasadena, California knows this firsthand:

    “For most homeowners it starts with a desire to save money; however, even for the most cost conscious, the understanding that they are doing something good, sweetens the deal.”

    With dramatic price drops in solar equipment, solar energy is more affordable than ever for homeowners considering the switch.

    “With new financing options, and more capital moving into the industry, it has never been cheaper or easier to install solar on your home or business,” according to Hobson at SEIA. “Over the last decade, the price of residential solar has dropped nearly 60 percent.”

    Decreasing solar costs is great but that doesn’t mean solar panels will make financial sense for everyone. Another important factor is the cost of electricity where you live. If you happen to live somewhere with cheap electricity, you’re unlikely to recoup your investment. Going solar in locations with cheap electricity is more about lowering your environmental footprint and being more self-sufficient.

    “We have clients who don’t even care about what they will save; they just want to be as green as possible,” Jenal from Run on Sun explains. “For our non-profit clients it is about fulfilling their educational mission and being good stewards of the environment.”


    Chances are, when you think about the suitability of solar energy for your home, the first thing that comes to mind is sunny skies and long hot days. While the level of solar radiation in your city is an important factor, it’s not everything. There is another factor that is equally, if not more, important: your current utility rate. Ultimately, figuring out if solar energy will save you money in the long run boils down to figuring out if the cost of solar electricity is the same or cheaper than electricity from the utility. If the answer is yes, then solar energy makes financial sense.

    So how do we do this? We will walk you through the steps.

    Finding your current electricity rate

    OK, I will admit, figuring out the cost of electricity from your utility is not as simple as it should be. It would be nice if the cost per kWh was clearly indicated, but in many cases, it is not. A ballpark figure can be determined by taking your total charge for the month and dividing it by the number of kilowatt-hours you used.

    Utility bill sample (Source: Southern California Edison)

    So in this example bill from a California utility, you would take 300.09 / 1500 kWh = 0.20/kWh.

    20kw, commercial, solar, system

    But this is not really the most accurate number because it includes your fixed monthly charges, which inflate the cost per kWh. With solar panels, you would still stay connected to the grid and would continue to have fixed charges. Therefore, it would be better if you could find the total cost before the fixed charges. You can compare multiple monthly bills to see which charges are fixed from month to month, or speak to your utility to learn more about the fixed charges for solar customers.

    If you don’t want to dig up your past electricity bills, you can also use the 12-month average for your state (for the latest 12-month averages by click here). In the case of California, the state average for the past 12 months is 0.17/kWh, which is lower than the figure we calculated above.

    Now, how do you determine the cost of solar electricity?

    For most people, determining the cost of solar electricity can be reminiscent of high-school trigonometry problems…not fun. It turns out that the math for solar electricity is actually much easier than a basic trigonometry problem: the issue is the novelty factor. We’re simply not used to thinking about electricity as something that we produce by investing in a “power generation asset”. But buying or leasing solar panels is exactly that, so we need to think like a producer, not a consumer.

    To do that, we calculate the levelized cost of solar energy (LCOE), which is essentially the cost of solar electricity, including both the initial installation costs, as well as the ongoing expenses such as fuel and maintenance over the expected lifetime of the investment. The term levelized refers to making an apples-to-apples comparison of different sources of energy.

    All other things being equal, the more sun a location receives, the lower the levelized cost of solar energy.

    The levelized cost of solar energy should not be confused with another solar cost: cost per watt. The cost per watt is nothing but a handy way to normalize the total cost of installation. For example, if the cost of installation for a 5 kW (i.e., 5,000 watt) solar PV system is 20,000, then the cost per watt of this system is 20,000 divided by 5,000 watts: 4 per watt. Cost per watt is not dependent on the amount of sun a location receives, but it does vary from place to place because of other factors, such as the cost of permits and customer acquisition, to name a couple.

    Location, Location, Location

    As mentioned, where you are located greatly impacts the cost of solar electricity, or LCOE. Not only is the amount of sunlight that falls on your panels location dependent, but so are the available financial incentives, such as rebates and tax credits.

    Since there are so many different municipal and state incentive programs, for simplicity, we will only consider the federal investment tax credit (ITC) of 30%, because that is available nationwide (after 2019 the ITC will be reduced to 26% for 2020, 22% for 2021 before disappearing completely for residential solar as of 2022).

    20kw, commercial, solar, system

    If you live in Canada, there is no federal tax credit, but there are some incentives/rebates at the provincial level.

    I just bombarded you with tons of information, so let’s take an actual case and illustrate some of these points:

    Solar system installation cost: Assuming a cost per watt of 4, an average-sized residential solar panel installation with 5-kW capacity would cost about 14,000 (20,000 minus the 30% federal investment tax credit). Other available rebates would decrease this cost further.

    Operating and maintenance cost: An estimate for the operation and maintenance costs over the expected 25-year lifetime of your panels would be about 10 percent of the purchasing cost before tax credits (0.10 20,000) — in this case, about 2,000 for a 5-kW system. This is essentially a provisional budget to account for things like an inverter replacement or minor repairs. With no moving parts, solar panels themselves are virtually maintenance free, but some of the other electrical equipment may need some care.

    Fuel cost: In the case of solar, the fuel comes from the sun, so there is no additional cost. In practice this means two things: 1) you will actually save money using a star that’s about 93 million miles from your panels; and 2) once you pay off your solar loan, your annual electricity cost will be minimal.

    Coming back to Earth, let’s sum up the installation, as well as operation and maintenance costs, in order to estimate the total lifecycle cost: 14,000 2,000 = 16,000.

    We’re almost done! But we still need to determine how much electricity you can produce with your system to determine the levelized cost.

    Energy Produced with a 5 kW System in Los Angeles

    Levelized cost of solar electricity in Los Angeles

    Electricity Produced: Using our solar power calculator Discover, we can see that a 5-kW system installed in Los Angeles would generate about 8,100 kWh of electricity per year. By comparison, the same system installed in Portland, Oregon would yield about 5,840 kWh per year.

    Because, as we mentioned, most solar energy installations have an expected lifetime of 25 years, we multiply the annual average generation by 25 to get 202,500 kWh over 25 years for Los Angeles, or 146,000 kWh over 25 years for Portland.

    Levelized Cost: The final step is to divide the life-cycle cost (16,000) with the amount of electricity the system will generate over its lifetime. In the case of Los Angeles: 16,000 divided by 202,500 kWh equals about 0.08/kWh, whereas in Portland, we are looking at about 0.11/kWh.

    So far, we assumed that you would buy the panels with an all-cash transaction. In reality, many homeowners will need some sort of a financing mechanism (we discuss your financing options in more detail below). Incorporating the cost of financing into the levelized cost estimates complicates the math (compounded interest rate calculations anyone?), so I suggest that you use our Buy or Lease Calculator and quickly go through some alternative financing scenarios to determine the best option.

    We were considering the same system with the same life-cycle cost, but because the amount of sunshine differs in the two locations and, therefore, so does the amount of solar electricity that can be produced, we find that the levelized cost is significantly different for the two example locations.


    Grid parity is achieved when the Levelized Cost of Electricity (LCOE) for solar electricity is the same or lower than the utility rate where you live. When you’ve reached grid parity switching to solar will save you money over the lifetime of the panels. (Of course, there are other technical considerations which affect your decision to go solar, such as the shade on your roof – we explore these other factors below).

    In the case of Los Angeles, using the state average utility rate of 0.17/kWh and comparing that to the LCOE of 0.08/kWh, we see that solar energy makes financial sense, and you would save a significant amount of money over the lifetime of your panels.

    Of course, if you live elsewhere, or learn that the cost is different than the 4/W we assumed, or that you can benefit from additional incentives, you need to run the numbers again (have been falling, so a more accurate figure is probably 3/watt now, but if the math work for 4/watt, it only gets better as the cost goes down!). You can sharpen your pencils, sort them in descending order, take out your favorite notepad and prepare to spend some time on the math, or just use Home Solar Discover and save yourself the hassle.

    To see how your state compares when it comes to residential solar, you can check out our interactive grid parity map. You can even adjust the cost of solar panels to reflect falling prices. If your state hasn’t reached grid parity yet, you can see at what “cost per watt” it does. If you live in Canada, we have a map for you too.

    You can easily see how critical the federal investment tax credit of 30% has been in stimulating the growth of the residential solar market. Just try switching it off with our interactive map and see what happens when there is no ITC. It’s helped residential solar take off in many locations.

    Remember, any additional state or municipal incentives will only improve the profitability of solar where you live.

    To sum up, I’ll just imagine what Yoda would have said about the topics we covered above:

    “Remain the same over the lifetime of your panels, the levelized cost will. Almost certain to rise, the cost of electricity from your utility is. Yeesssssss.”

    “While the LCOE will remain the same over the lifetime of your panels, the cost of electricity from your utility is almost certain to rise.”


    You have determined that, from a financial perspective, solar energy makes sense! But even though the financials are sound, there may be other potential show stoppers. The state of your roof, its configuration, as well as the orientation and shade levels are all important factors.

    Using Home Solar Discover, you can take into account the estimated level of shade, the orientation of your roof, and its slope. With that, you have a good start, but ultimately, solar installers will need to visit your home and see for themselves. They will make recommendations on the type of equipment and the placement of panels so that you maximize your investment.

    James Hahn, CEO of My Solar Home, a solar company in New Jersey, explains the importance of a site visit like this:

    “Our home site audit enables our field technicians to take detailed measurements of your home in order for us to optimize the design of your solar energy system to ensure it best meets your home’s specific energy needs. We conduct a thorough examination of your roof which includes measurements, condition/age of roof, along with determining if there are vents, attic fans, chimneys or other obstructions that will impact the system design and production. We obtain comprehensive shade readings to ensure optimal power production. We complete a thorough inspection of your electrical service panel to determine how we will connect your system to the utility grid, as well as assess the structure of your roof by closely inspecting the home’s framing. This comprehensive site audit and inspection ensures that we custom design the solar energy system to best meet your home’s needs.”

    If you already know that your roof is in need of repairs or will need replacing in the next few years, it likely makes more sense to do that work now before you speak with installers. However, in some cases, you may be able to combine the work, as some contractors do both roofing and solar installations, so this option may be worth examining as well.

    Solar panels are a big investment, and for that reason, you want to be as prepared as possible before you speak with solar companies. Understand your options, from central inverters to micro-inverters, know your electricity usage so that you end up with the optimal system size, and read up on solar basics. The installers will be able to walk you through most of it, but you will understand much more and make a more informed decision if you do some simple research first. Home Solar is here to help, with articles on all these subjects and much more.

    Alexandra Hobson from SEIA offers these additional tips for homeowners considering solar energy:

    “Become an informed consumer. any homeowner considering solar should know their situation (electricity usage, roof, finances etc.); do your homework (make sure to get multiple bids for your solar system, research your solar company, understand how tax credits, local incentives and Renewable Energy Certificates may apply); and understand the agreement (know the terms of your contract and fully understand what your warranties protect and for how long).”


    With more and more homeowners choosing to install solar panels (nearly 1 million homes in the U.S. today, according to SEIA), both homeowners and appraisers/realtors need to better understand how solar panels affect the value of a home.

    Whether the PV system is owned or leased is an important distinction. The studies we refer to below looked at owned systems. In the case of leasing, it is more relevant to consider the terms of your agreement if you think you might sell your home. can the lease be passed on to the next owner, what are the penalties for breaking the lease agreement, is there a buy-out option, can you take your panels to your new home, etc.

    As with many solar panel related questions, the premium on solar homes is location dependent. Homeowners in jurisdictions that are favorably located for solar energy production, that have high retail electricity prices, and that encourage development through incentives and subsidies are more likely to find their investment will pay off. This is even more true in areas where green or renewable energy is very highly valued, such as neighborhoods with a higher concentration of hybrid or electric vehicles.

    According to a recent study by the Lawrence Berkeley National Laboratory, supported by the U.S. Department of Energy SunShot Initiative, the average premium for a home in the U.S. with owned solar panels was 3.78/W, or 14,000 on an average sized PV system of 3.8 kW on a home sold in 2011. PV premiums varied across the U.S. (in the study, 43 home-sales pairs were studied in six states, where home-sales pairs are pairs of comparable PV and non-PV homes) and the premiums ranged from 2.68/W to 4.31/W. It was found that PV premiums were more similar to net PV costs, as opposed to gross PV costs, which is understandable as incentives/subsidies decrease the cost to the homeowner significantly. As the cost of solar PV installations decrease, it is expected that PV premiums will also decrease.

    Investing in solar panels for your home is no longer just an environmental decision taken by green-living homeowners. It is an economic decision taken by homeowners looking to make a Smart, financially sound decision with respect to the value of their home.


    Congratulations! You made it to the end of this guide. By reading this, you already took an important step in taking charge of your own energy future. We are in the middle of an energy revolution, and it’s time to join the party.

    A decade ago, rooftop solar panels were a rare sight. Today, more and more homeowners are taking a serious look at what solar energy can do for them.

    “Growth in solar markets across the country is at a level unimaginable at the start of this decade,” according to Alexandra Hobson from SEIA. “Thanks to the recent extension of the solar investment tax credit, by 2020, the industry will be employing more than 420,000 American workers and deploying more than 20 GW of solar electric capacity annually. To put this in perspective, at the end of 2014, 20 GW was the total amount of solar that America had installed in its history.”

    With rising electricity rates in most parts of the country, solar energy is increasingly an investment that makes sense for homeowners. Fortunately, the cost of solar has decreased significantly, making it a more affordable option.

    “Whether you save 10% from day one or just 1%, utility are going up and the available solar incentives are going away,” says Jigar Shah. “The time is now to get your roof checked out and see if you have a nice unobstructed view of the sun.”

    In addition to installing solar panels, there are many other things homeowners can do today to manage their electricity bills, starting with reducing electricity consumption, especially during peak periods, and implementing home energy-efficiency measures.

    All of these steps have the added benefit of helping the environment and reducing the negative effects of climate change.

    As Hobson sums it up, “if we are to have a realistic hope of continuing greenhouse gas reduction, then greater deployment of 21st century solar technologies – both in the United States and around the world – is absolutely critical.”

    Whether you do it for the environment, for your finances or just to impress your neighbors, the time to go solar is now. All that’s left to do is to crunch the numbers and find highly-rated installers in your area. Home Solar Discover is here to help!

    Spread the solar goodness: please share this guide with your friends and family.

    Simone Garneau is the co-founder of Home Solar, an online consumer education website for residential solar energy. The goal of Home Solar is to help homeowners go solar and save money. In addition to 200 articles about solar energy, Home Solar offers homeowners other great resources: a Solar Report for solar energy, Discover, to preview solar energy for your home, and Learn for fun and interactive solar tools.



    and more Canadians are turning to solar energy to reduce their electricity costs but financing their system remains a challenge. Check out various solar financing options.

    Smart Technologies for Home

    Not ready for solar but still interested in reducing your electricity use, helping the environment and making your life simpler? Check out our guide to Smart technologies for your home.

    How Do Solar Panels Work?

    Home Solar is full of very useful information for homeowners who are interested in solar power. Here is a gentle introduction to each key aspect with links for in-depth information.


    Breakdown of the cost of solar panels, including hardware, installation, permits, and a complete guide to financing solar panels. The perfect place to start learning about going solar.

    How Many Solar Panels Do I Need to Power My House? (2023 Solar Guide)

    This guide has helped many homeowners determine the optimal solar system size for their home. Let’s get started!

    Each product and or company featured here has been independently selected by the writer. You can learn more about our review methodology here. If you make a purchase using the links included, we may earn commission.

    Written by Leonardo David

    Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, fast food, real estate and retail. He has also been writing articles about energy and engineering topics since 2015. Learn About This Person

    Reviewed by Melissa Smith

    Melissa is an avid writer, scuba diver, backpacker and all-around outdoor enthusiast. She graduated from the University of Florida with degrees in journalism and sustainability studies. Before joining EcoWatch, Melissa worked as the managing editor of Scuba Diving magazine and the communications manager of The Ocean Agency, a nonprofit that’s featured in the Emmy award-winning documentary Chasing Coral. Learn About This Person

    Why You Can Trust EcoWatch

    We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites.

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    Find the best price from solar installers in your area.

    Solar panel popularity has been on the rise but many still wonder if solar panels are affordable. Like many other products, with solar you do need to purchase a set amount of panels that will generate energy sufficient enough to cover the amount of electricity used in your home. The question at hand that we see the most from consumers to installers is how much will going solar cost and how many solar panels will we need.

    The truth is that the exact amount will vary person by person and based on a variety of different factors. No one solar situation is the same and with the different customizable preferences that exist such as types of panels, using solar shingles vs solar panels, and what part of the country you live in can impact how effective your panels are and thus how many you need to cover your basic energy output.

    With that said, the best way to discover how many panels your home will need is by speaking with a solar professional that will calculate solar panel outputs based on those factors and more. But for a rough estimate we’ve put together the same equation that professionals use to give you a better idea of what you might need.

    Again, solar panel systems are highly individualized, so your solar provider will help you customize your solar panel system to meet your needs and preferences and advice on panel wattage and system size.

    What Factors Affect How Many Solar Panels You Need?

    The size of your home and available roof space, the amount of direct sunlight your home receives, the type and efficiency rating of your solar panels, and how much energy your household use are all factors that affect how many solar panels you need. For example, if there are two identical homes powered by solar energy in California and New York, with exactly the same energy usage, the California home will need fewer solar panels because the state gets more sunshine. But two homes in the same neighborhood might not even need the same number of solar panels. It all comes down to the individualized needs of each household.


    SunPower designs and installs industry-leading residential solar and storage solutions across all 50 states. With a storied history of innovation dating back to 1985, no other company on this list can match SunPower’s experience and expertise.

    SunPower earns its position as the top national installer on our list for a handful of reasons: It installs the most efficient solar technology on the residential market, offers the most expansive service area and backs its installations with a warranty well above the industry standard. All the while, SunPower pioneers sustainability efforts within the industry.

    If that weren’t enough, SunPower systems come packaged with products all manufactured in-house by its sister company, Maxeon. This means that your panels, solar cells, inverters, battery and EV chargers are designed to work together and are all covered under the same warranty.

    SunPower’s biggest downside? Its high-efficiency panels are considerably more expensive than most of its competitors’ products. However, its powerful panels are workhorses that make up for the initial cost with more backend production (think about this like spending more money for a car that gets more miles per gallon).

    Facts and Figures: SunPower

    EcoWatch Rating Better Business Bureau (BBB) Rating Year Founded Average Cost (-) Solar Services Brands of Solar Equipment Offered Warranty Coverage
    Solar Panels, Solar Batteries, EV Chargers, System Monitoring
    SunPower Panels
    25-year all-inclusive warranty

    Blue Raven Solar

    We like Blue Raven Solar because it understands that, for most homeowners, the cost of solar presents the biggest barrier to entry.

    For that reason, Blue Raven Solar developed an innovative solar financing plan that offers in-house, flexible, zero-money-down options. The results speak for themselves, as Blue Raven Solar is now one of the fastest-growing solar companies in the nation and was recently acquired by SunPower. Its BluePower Plus plan (exclusive to Blue Raven) mimics the flexible structure of a lease while still providing the greatest benefits of owning your system.

    Eligible homeowners enjoy 18 months of solar power before having to pay their first bill. When coupled with the federal solar investment tax credit (ITC), the initial energy savings can offset more than a third of the overall cost of a system before requiring a dollar down.

    In contrast, other installers can only offer similar financing through solar leases, PPAs or third-party providers (such as Mosaic or Sunlight). Third-party loan providers can complicate the process, while opting for a loan or PPA will disqualify you from some of solar’s biggest benefits (additional property value, federal solar tax credit and local solar incentives).

    Facts and Figures: Blue Raven Solar

    EcoWatch Rating Better Business Bureau (BBB) Rating Year Founded Average Cost (-) Solar Services Brands of Solar Equipment Offered Warranty Coverage
    Solar Panels, System Monitoring
    Trina Solar, Canadian Solar, SolarEdge, Silfab, SunPower
    25-year manufacturer warranty; 10-year workmanship warranty, 2-year production guarantee

    ADT Solar

    ADT Solar sets the industry standard for warranty coverage by including a multifaceted guarantee, making it one of the top installers for homeowners who want added peace of mind.

    Its warranty coverage includes all of the following for 25 years:

    • Power Production Guarantee: Also known as a performance guarantee, this ensures your solar system will produce the amount of electricity that’s outlined in your proposal, or ADT will write you a check for the difference.
    • Labor Guarantee: This covers any issues with the installation of your system and is also known as a workmanship warranty.
    • Panel Module Performance Guarantee: This is what ADT Solar refers to the manufacturer warranty as, and it ensures that any manufacturing defects are repaired or your ineffective panels replaced.
    • Enphase Microinverters Guarantee: This backs the performance of your inverters.

    Though in recent years other solar companies have started to offer similar guarantees, ADT Solar has been at it since 2008, performing over 30,000 installations across the country.

    Facts and Figures: ADT Solar

    EcoWatch Rating Better Business Bureau (BBB) Rating Year Founded Average Cost (-) Solar Services Brands of Solar Equipment Offered Warranty Coverage
    Solar Panels, Solar Batteries, EV Chargers, Energy-Efficiency Upgrades
    Silfab, Panasonic and others depending on location
    25-year all-inclusive warranty

    The following are some of the most important factors to consider when figuring out many solar panels your house needs:

    The Size of Your Home and Available Roof Space

    Larger homes tend to consume more electricity, and they generally need more solar panels. However, they also have the extra roof space necessary for larger solar panel installations.

    There may be exceptions to this rule — for example, a 2,000-square-foot home with new Energy Star appliances may consume less power than a 1,200-square-foot home with older, less-efficient devices. When it comes to installation, solar panels can be placed on many types of surfaces.

    However, your roof conditions may limit the number of solar panels your home can handle. For example, if you have a chimney, rooftop air conditioning unit or skylight, you’ll have to place panels around these fixtures. Similarly, roof areas that are covered by shadows are not suitable for panels.

    Also, most top solar companies will not work on asbestos roofs due to the potential health risks for installers.

    The Amount of Direct Sunlight in Your Area

    Where there is more sunlight available, there is more energy that can be converted into electricity. The yearly output of each solar panel is higher in states like Arizona or New Mexico, which get a larger amount of sunlight than less sunny regions like New England.

    The World Bank has created solar radiation maps for over 200 countries and regions, including the U.S. The map below can give you an idea of the sunshine available in your geographic location. Keep in mind that homes in sunnier regions will generally need fewer solar panels.

    © 2020 The World Bank, Source: Global Solar Atlas 2.0, Solar resource data: Solargis.

    Number of Residents and Amount of Energy You Use

    Households with more members normally use a higher amount of electricity, and this also means they need more solar panels to increase energy production.

    Electricity usage is a very important factor, as it determines how much power must be generated by your solar panel system. If your home uses 12,000 kilowatt-hours (kWh) per year and you want to go 100% solar, your system must be capable of generating that amount of power.

    Types of Solar Panels and Efficiency Rating Used

    High-efficiency panels can deliver more watts per square foot, which means you need to purchase fewer of them to reach your electricity generation target. There are three main types of solar panels: monocrystalline, polycrystalline and thin-film.

    In general, monocrystalline panels are the most efficient residential solar panels, followed closely by polycrystalline panels. Thin-film panels are the least efficient.

    If you want to know for sure how many panels you need, you can click below to connect with an EcoWatch-vetted installer and get a free estimate.

    How Can You Estimate the Number of Solar Panels You Need to Power Your Home?

    So, based on these factors, how many solar panels power a home?

    To roughly determine how many solar panels you need without a professional assessment, you’ll need to figure out two basic things: what is your energy use and how much energy your panels will produce. We dive into these in more detail below, but here are the general steps:

    • Calculate how much energy your home uses
    • Assess your roof space and the amount of sunlight your home receives
    • Figure out the specific yield of solar panels in your area to estimate system size
    • Check the wattage of the specific panels you intend to purchase
    • Divide the wattage of your system by the solar panel wattage

    Determine Your Home’s Electricity Needs

    According to the latest data from the U.S. Energy Information Administration (EIA), the average American home uses 10,649 kWh of energy per year. However, this varies depending on the state. For example:

    • Louisiana homes have the highest average consumption, at 14,787 kWh per year.
    • Hawaii homes have the lowest average consumption, at 6,298 kWh per year.

    To more closely estimate how much energy you use annually, add up the kWh reported on your last 12 monthly electric bills. These numbers will fluctuate based on factors like the size of your home, the number of residents, your electricity consumption habits and the energy efficiency rating of your home devices.

    Electricity Needs for Common Household Appliances

    The size of your home is a major indicator of how many solar panels you need, but you also have to take into account your daily energy use. For instance, a household with common appliances — such as a refrigerator, dishwasher, stove, etc — will consume less electricity than a home that has an added heated pool, central air conditioner, hot tub and electric vehicle.

    These additional appliances and systems will dramatically increase your daily energy use, which means you will need more solar panels to offset your total energy consumption. As you plan your home solar system, make a list of all your appliances and systems so that all are accounted for in your final design.

    Product Average Annual Energy Use Number of Solar Panels Needed
    Television 100 kW/year 1
    Dishwasher 360 kW/year 2
    Oven 410 kW/year 2
    Dryer 470 kW/year 2
    Energy Star Refrigerator 615 kW/year 2
    Electric Vehicle 4,000 kW/year 12
    Electric Water Heater 4,500 kW/year 16

    assuming 350-watt solar panels are installed and average sun hours

    Solar Panel Specific Yield

    After you determine how many kWh of electricity your home uses annually, you’ll want to figure out how many kWh are produced by each of your solar panels during a year. This will depend on the specific type of solar panel, roof conditions and local peak hours of sunlight.

    In the solar power industry, a common metric used to estimate system capacity is “specific yield” or “specific production.” This can be defined as the annual kWh of energy produced for each kilowatt of solar capacity installed. Specific yield has much to do with the amount of sunlight available in your location.

    You can get a better idea of the specific yield that can be achieved in your location by checking reliable sources like the World Bank solar maps or the solar radiation database from the National Renewable Energy Laboratory. To estimate how many kW are needed to run a house, you can divide your annual kWh consumption by the specific yield per kilowatt of solar capacity.

    For example, if your home’s energy needs are 15,000 kWh per year, and solar panels have a specific yield of 1,500 kWh/kWp in your location, you will need a system size of around 10 kilowatts. Paradise Energy Solutions has also come up with a general formula to roughly ballpark the solar power system size you need.

    You can simply divide your annual kWh by 1,200 and you will get the kilowatts of solar capacity needed. So, if the energy consumption reported on your last 12 utility bills adds up to 24,000 kWh, you’ll need a 20 kW system (24,000 / 1,200 = 20).

    You can also visit this resource to get an idea of how solar panels may perform at your house.

    Watch below for more info on how your solar panels may be producing less electricity (watts) than what their power rating claims.

    How Much Roof Space Does Your Solar Panel System Need?

    On average, a solar system requires between 280 square feet and 350 square feet of roof space. Considering the average square footage of residential home roofs in the United States is 1,700 square feet, most people will not have any issues with solar panel installation.

    But if you have a smaller roof, it’s best to invest in higher efficiency panels because you will need fewer panels to cover your energy costs. To help estimate the required square footage for your home solar, we’ve created a table that estimates how much space you’ll need for the most common solar system sizes:

    System Size Estimated Monthly Energy Production Number of 350-Watt Solar Panels Minimum Required Roof Square Footage
    3 kW 200 – 520 kWh 9 160 sq. ft.
    5 kW 300 – 860 kWh 15 265 sq. ft.
    7 kW 430 – 1,210 kWh 20 355 sq. ft.
    9 kW 555 – 1,550 kWh 26 460 sq. ft.
    11 kW 678 – 1900 kWh 32 565 sq. ft.
    15 kW 924 – 2500 kWh 43 760 sq. ft.

    based on the installation of 350-watt panels and average sun hours

    The above estimates are based on the installation of 350-watt solar panels. If you decide to go with panels rated for more or less wattage, the required roof space will differ. For instance, you will need more roof space for panels with less wattage and less roof space for panels rated for a higher wattage.

    It’s fairly simple to determine how much roof space you need, just multiply the number of solar panels you need by their size. The industry average square footage of a solar panel is 17.55 square feet, but this number will vary depending on your panels.

    Below we’ve provided estimates for the amount of roof space you’ll need if you install a 9 kW solar system but choose panels with a wattage other than 350-watts:

    • 300-watt panels: 30 solar panels = 530 square feet
    • 325-watt panels: 28 solar panels = 500 square feet
    • 375-watt panels: 24 solar panels = 425 square feet
    • 400-watt panels: 23 solar panels = 400 square feet

    Conclusion: How Many Solar Panels Do You Need?

    Once you know how much electricity you use and the system size you need, you can check your panel wattage to figure how many panels to purchase for your solar array. Multiply your system size by 1,000 to obtain watts, then divide this by the individual wattage of each solar panel.

    Most of the best solar panels on the market have an energy output of around 330W to 360W each. The output of less efficient panels can be as low as 250W. So, if you need a 10-kW solar installation and you’re buying solar panels that have an output of 340W, you’ll need 30 panels. Your formula will look like this: 10,000W / 340W = 29.4 panels.

    If you use lower-efficiency 250-watt solar panels, you’ll need 40 of them (10,000W / 250W = 40) panels. Keep in mind that, although the cost of solar panels is lower if you choose a lower-efficiency model over a pricier high-efficiency one, the total amount you pay for your solar energy system may come out to be the same or higher because you’ll have to buy more panels.

    If you want to know for sure how many panels you need, you can click below to connect with an EcoWatch-vetted installer and get a free estimate.

    How Much Do Solar Panels Cost? (2023 Guide)

    If you’re looking to invest in solar power, we break down the costs and factors that will contribute to the final price of your solar energy system.

    Join the 9,540 people who have received a free, no-obligation quote in the last 30 days

    Faith Wakefield is a writer based in North Carolina. She holds economics and English degrees from UNC Chapel Hill, and her work has been featured on EcoWatch, The World Economic Forum and Today’s Homeowner. In her free time, she loves to binge-watch personal finance videos on YouTube, collect books and spend time in nature.

    Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

    Karsten Neumeister is an experienced energy professional with subject-matter expertise in energy policy and the solar and retail energy industries. He is currently the Communications Manager for the Retail Energy Advancement League and has prior experience writing and editing content for EcoWatch. Before EcoWatch, Karsten worked for Solar Alternatives, curating content, advocating for local renewable energy policy and assisting the solar engineering and installation teams. Throughout his career, his work has been featured on various outlets including NPR, SEIA, Bankrate, PV Mag and the World Economic Forum.

    Based on our survey of 1,000 homeowners with installed solar systems, solar panels cost between 15,000 and 20,000 per home. However, according to the Solar Energy Industries Association (SEIA), a residential solar system can cost upward of 25,000 per installation.

    We at the Guides Home Team have researched and reviewed the top solar companies to help you better understand the cost of solar and determine if it’s a worthwhile investment for your home. Read on to learn how factors like where you live, your household’s energy usage and the type of solar panels you install can impact the final cost of your solar system.

    • Cost Factors
    • Cost Breakdown
    • How To Save Money
    • Are Solar Panels Worth It?
    • The Bottom Line

    Offers a range of financing options 24/7 customer service line Panel insurance protects against theft and damage

    Packages include 24/7 system monitoring 25-year warranty guarantees power production, product performance and workmanship Installation process is handled 100% in-house

    Solar Panel Cost Factors

    Your location, energy needs and equipment selection are the top three factors that contribute to solar panel cost.


    Two significant location-based factors will determine your total cost and savings of going solar: the cost of energy where you live and how much sunlight you receive. In states where traditional energy is more expensive, like California, Hawaii and New York, you stand to save more on energy bills when you switch to solar. However, how much sunlight you receive also plays an important role in determining how many solar panels you’ll need (and thus how much you’ll pay for your system). If you live in a super sunny state like Arizona or New Mexico, you’ll have more daily peak sunlight hours, requiring fewer panels to meet your energy needs. That’s not to say solar isn’t worth it if you don’t live in a state with high energy costs and abundant sunlight. See how energy costs compare in your state using the map below, and learn more about how you can determine how many solar panels you need.

    20kw, commercial, solar, system

    Top Solar Companies By State

    Alabama | Alaska | Arizona | Arkansas | California | Colorado | Connecticut | Delaware | Florida | Georgia | Hawaii | Idaho | Illinois | Indiana | Iowa | Kansas | Kentucky | Louisiana | Maine | Maryland | Massachusetts | Michigan | Minnesota | Mississippi | Missouri | Montana | Nebraska | Nevada | New Hampshire | New Jersey | New Mexico | New York | North Carolina | North Dakota | Ohio | Oklahoma | Oregon | Pennsylvania | Rhode Island | South Carolina | South Dakota | Tennessee | Texas | Utah | Vermont | Virginia | Washington | West Virginia | Wisconsin | Wyoming

    Energy Needs

    The typical U.S. household uses 10,632 kilowatt-hours (kWh) of electricity each year or around 886 kWh monthly. However, several factors can affect your energy needs, including the size of your home, how many people are in your household and if you have an electric vehicle (EV). The higher your household’s energy consumption, the larger the solar panel system necessary to offset your usage. For example, based on our average cost of a solar panel at 3 per watt with installation, a 6 kW system would run you around 18,000, while a 12 kW system would double the cost. Solar providers typically want to install a system that generates just enough electricity to support your typical energy usage — so your panels aren’t producing too much or too little energy. When designing your solar system, you’ll typically speak with a solar expert to determine your current and future needs and decide what size system is right for you.

    Solar Panel Selection

    The cost of your panels and equipment is by far the largest expense you’ll pay during your solar installation. There are many solar panel options available, and the manufacturer, installer and type of panels you choose will affect the final cost of your system. There are three common types of solar panels: thin-film, monocrystalline and polycrystalline. Beyond those options, each solar panel manufacturer offers a selection of products with different wattages, durability and technologies that affect energy production and overall cost. Your solar installer will walk you through choosing the right kind of panel for your home. However, it doesn’t hurt to research the best solar panel brands and manufacturers on your own.

    Purchasing Options

    There are three common financing options for solar panels: a cash purchase, solar loans and solar leasing. In most cases, you’ll see the most return on investment if you buy your solar panel system in cash upfront. However, most homeowners cannot afford to pay tens of thousands of dollars for solar panels out-of-. If you finance your solar panels with a loan, you’ll still see a substantial return on your investment, but the interest that accrues on your monthly payments will set back your solar savings slightly. Another payment option is a solar lease. As the total cost to install solar panels has declined by over 50% in the last 10 years, leasing has fallen out of favor among many homeowners looking to go solar, and many solar companies no longer offer it. Another major downside of leasing your panels instead of owning them is that you won’t be eligible for the 30% solar tax credit. However, you can still see some savings when you lease your solar panels. With this option, you rent your solar panels through your solar provider for a fixed rate each month. You’ll likely still see some savings but won’t own your solar panel system in the long run.

    Solar Installation Company

    Another factor that can greatly affect the ultimate cost of your solar system is the installation company that you choose. Use the chart below to help you find a provider with an installation cost within your budget and request a free quote.

    Provider Avg. Cost of a 10-kW System Compare Quotes
    SunPower 15,000–20,000 Get Quote
    Sunrun 15,000–20,000 Get Quote
    ADT Solar 15,000–20,000 Get Quote
    Blue Raven Solar 15,000–20,000 Get Quote
    Elevation 10,000–15,000 Get Quote
    Freedom Solar 25,000–30,000 Get Quote
    Green Home Systems 20,000–25,000 Get Quote
    Palmetto Solar 15,000–20,000 Get Quote
    Momentum Solar 20,000–25,000 Get Quote
    Solar Energy World 25,000 Get Quote
    Tesla Energy 25,000–30,000 See

    Solar Panel Installation Cost Breakdown

    Although the exact cost of your solar panel installation will vary depending on the company and type of panels you choose, you can expect your equipment (panels, inverters, racking or mounting hardware, etc.) to make up nearly half of your total cost. Labor costs, administration fees, taxes, building permits and electrical permits comprise the rest of your expenses. Jesse Solomon, the co-founder of NCSolarNow, explained the cost breakdown of a typical solar panel installation as follows:

    How To Save Money on Solar Panels

    The demand to expand renewable energy infrastructure in the U.S. shows no signs of slowing. As a result, the federal government and many states are incentivizing residents to install solar panels on their homes. There are plenty of programs that can help you save money on solar panels. Your solar installer can help you apply for the federal solar tax credit and any state and local incentives for which you’re eligible.

    Federal Solar Incentives

    The Federal Solar Investment Tax Credit (ITC) is a tax incentive worth 30% of the total cost of your solar panel system. All U.S. homeowners who install solar panels are eligible for this credit, and it reduces what you owe in federal income taxes. For most solar systems, this credit is worth several thousand dollars, which is significant savings. However, if you choose to lease your panels, you will not be eligible for this tax credit. You can only claim this tax credit if you own your panels. The credit is currently set to decrease to 26% in 2033, then to 22% in 2034 before expiring entirely in 2035.

    State Solar Incentives

    In addition to federal incentives, many states offer other incentives to go solar, including tax breaks, credits and rebates. If you’re interested in the solar incentives available in your state, you can browse the Database of State Incentives for Renewables Efficiency (DSIRE) or visit your local government website to learn more. Additionally, net metering is a program that allows you to sell the excess electricity your solar panels generate to your utility company for billing credits. Forty-one states and Washington D.C. have a state-mandated net metering policy, though some policies are better than others. States without a mandated net metering policy, like Texas and Idaho, may have utility companies that offer the program. Many states also offer solar rebate programs for low- and moderate-income households or community solar programs that aim to make clean energy more accessible.

    Solar Incentives by State

    Alabama | Alaska | Arizona | Arkansas | California | Colorado | Connecticut | Delaware | Florida | Georgia | Hawaii | Idaho | Illinois | Indiana | Iowa | Kansas | Kentucky | Louisiana | Maine | Maryland | Massachusetts | Michigan | Minnesota | Mississippi | Missouri | Montana | Nebraska | Nevada | New Hampshire | New Jersey | New Mexico | New York | North Carolina | North Dakota | Ohio | Oklahoma | Oregon | Pennsylvania | Rhode Island | South Carolina | South Dakota | Tennessee | Texas | Utah | Vermont | Virginia | Washington | West Virginia | Wisconsin | Wyoming

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