How Many Solar Panels Do You Need: Panel Size and Output Factors. Power house solar

How Many Solar Panels Do You Need: Panel Size and Output Factors

How many solar panels does the average house need? How many solar panels do I need for a 3-bedroom house? How many solar panels do I need for a 2000 sq. ft. home? These are all common questions for an aspiring solar homeowner. Determining how many solar panels you’ll need for your home requires first knowing what your goals are.

Do you want to minimize your carbon footprint? Maximize the return on your investment? Save as much money as possible?

Most people want to save money while minimizing their environmental impact.

To calculate how many solar panels you need, you need to know:

• Your average energy requirements
• Your current energy use in watts
• The climate and amount of sunlight in your area
• The efficiency of the solar panels you’re considering
• The physical size of the solar panels you’re considering

One simple way of answering the “How many solar panels do I need” question is to consult a professional solar installer, who can give you a free home solar evaluation.

How much solar power will you need?

To determine your home’s average energy requirements, look at past utility bills. You can calculate how many solar panels you need by multiplying your household’s hourly energy requirement by the peak sunlight hours for your area and dividing that by a panel’s wattage. Use a low-wattage (150 W) and high-wattage (370 W) example to establish a range (ex: 17-42 panels to generate 11,000 kWh/year). Note that the size of your roof and how much sunlight your roof gets are factors as well.

If you work with an experienced solar installer, they will handle all these calculations for you. If you’re searching for a calculator to figure out “how many solar panels do I need?”, look no further. You can use SunPower Design Studio to estimate your own system size, monthly savings, and the actual appearance of a solar array on your own roof. This interactive tool provides a solar estimate in just a few seconds and can be done on your own or on a call with SunPower (800) 786-7693.

How many watts do you currently use?

Look at your electricity bill for average usage. Look for “Kilowatt Hours (or kWh) Used” or something similar, and then note the length of time represented (usually 30 days). If your bill doesn’t show kilowatt hours used, look for beginning and ending meter readings and subtract the previous reading from the most recent one.

You want daily and hourly usage for our calculations, so if your bill doesn’t show a daily average, just divide the monthly or annual average by 30 or 365 days, respectively, and then divide again by 24 to determine your hourly average electricity usage. Your answer will be in kW. (And just in case you’re wondering, a kilowatt-hour is how much power you are using at any given time multiplied by the total time the power is being used.)

A small home in a temperate climate might use something like 200 kWh per month, and a larger home in the south where air conditioners account for the largest portion of home energy usage might use 2,000 kWh or more. The average U.S. home uses about 900 kWh per month. So that’s 30 kWh per day or 1.25 kWh per hour.

Your average daily energy usage is your target daily average to calculate your solar needs. That’s the number of kilowatt-hours you need your solar system to produce if you want to cover most if not all of your electricity needs.

It’s important to note that solar panels don’t operate at maximum efficiency 24 hours a day. (See Solar 101: How Does Solar Energy Work?). Weather conditions, for example, can temporarily reduce your system’s efficiency. Therefore, experts recommend adding a 25 percent “cushion” to your target daily average to ensure you can generate all the clean energy you need.

How many hours of sunlight can you expect in your area?

The peak sunlight hours for your particular location will have a direct impact on the energy you can expect your home solar system to produce. For example, if you live in Phoenix you can expect to have a greater number of peak sunlight hours than if you lived in Seattle. That doesn’t mean a Seattle homeowner can’t go solar; it just means the homeowner would need more panels.

The Renewable Resource Data Center provides sunlight information by state and for major cities.

Now multiply your hourly usage (see question No. 1) by 1,000 to convert your hourly power generation need to watts. Divide your average hourly wattage requirement by the number of daily peak sunlight hours for your area. This gives you the amount of energy your panels need to produce every hour. So the average U.S. home (900 kWh/month) in an area that gets five peak sunlight hours per day would need 6,000 watts.

What affects solar panel output efficiency?

Here’s where solar panel quality makes a difference. Not all solar panels are alike. Photovoltaic (PV) solar panels (most commonly used in residential installations) come in wattages ranging from about 150 watts to 370 watts per panel, depending on the panel size and efficiency (how well a panel is able to convert sunlight into energy), and on the cell technology.

For example, solar cells with no grid lines on the front (like SunPower ® Maxeon ® cells) absorb more sunlight than conventional cells and do not suffer from issues such as delamination (peeling). The construction of our cells makes them stronger and more resistant to cracking or corrosion. And a microinverter on each panel can optimize power conversion at the source, in contrast to one large inverter mounted on the side of the house.

Because of these wide variations in quality and efficiency, it’s difficult to generalize about which solar panels are right for you or how many you’ll need for your home. The main takeaway is that the more efficient the panels are, the more wattage they can produce, and the fewer you will need on your roof to get the same energy output. Conventional solar panels usually produce about 250 watts per panel, with varying levels of efficiency. In contrast, SunPower panels are known to be the most efficient solar panels on the market.

To figure out how many solar panels you need, divide your home’s hourly wattage requirement (see question No. 3) by the solar panels’ wattage to calculate the total number of panels you need.

So the average U.S. home in Dallas, Texas, would need about 25 conventional (250 W) solar panels or 17 SunPower (370 W) panels.

What is the effect of solar panel size?

If you have a small or unusually shaped roof, solar panel size and numbers are important considerations. With a large usable roof area, perhaps you can sacrifice some efficiency and buy larger panels (at a lower cost per panel) to get to your target energy output. But if your usable roof area is limited, or if it’s partially shaded, being able to use fewer smaller high-efficiency panels may be the best way to make the most possible power over the long term, ultimately saving you more money.

Solar panel dimensions

Typical residential solar panel dimensions today are about 65 inches by 39 inches, or 5.4 feet by 3.25 feet, with some variation among manufacturers. SunPower panels are 61.3 inches by 41.2 inches.

These dimensions have remained more or less unchanged for decades, but the efficiency and output from that same footprint have changed dramatically for the better. In addition, SunPower designs entire systems to have virtually no gaps between panels and uses invisible framing and mounting hardware to keep the rooftop footprint as tight, efficient, and attractive as possible.

How much do solar panels weigh?

If you’re planning on installing a rooftop solar system, understanding the weight of your solar panels is another key factor to consider. Knowing a solar panel’s weight is the best way to be certain that your roof can support a full installation.

While panel weights vary from brand to brand, most panels weigh about 40 pounds.

SunPower panels are the lightest of all major brands. with some of our panels weighing as little as 33 pounds. For comparison, at the top end of the range, some conventional panels weigh as much as 50 pounds.

Summary: How many panels do you need?

Knowing the answers to the above questions will give you an idea of the ideal number of panels for your electricity generation needs — or at least a realistic range. Next, a professional installer needs to assess your roof architecture, angle to the sun, and other factors to see if and how you’d be able to physically arrange the right number of panels on your roof to achieve your daily energy production goals.

You should also consider net metering as you’re considering how much money you’ll save and make from your solar system. Net metering is how your utility company credits you for producing excess solar energy when the sun is shining and then lets you draw from those credits when you’re using a conventional power grid at night if you don’t store your excess solar energy in a battery storage system.

To get started, check out our solar power calculator, which can help you figure out how much you might save going solar.

Interested in high-efficiency solar panels for your home? Contact SunPower for more information.

• . Based on datasheet review of websites of top 20 manufacturers per IHS, as of April 2021.
• . Energy Sage, July 2021, https://news.energysage.com/average-solar-panel-size-weight/

Determining how many solar panels can power a house doesn’t have to be complicated. From watts to kilowatts and more, these tips will help you figure out how many solar panels are required in a solar system for home use.

By Melissa Graham | Updated Jan 26, 2023 4:28 PM

We may earn revenue from the products available on this page and participate in affiliate programs.

Q: I’m interested in installing a solar panel system for my home, but I don’t know much about solar panels. How effective are they? How many solar panels power a house?

A: There are plenty of incentives and benefits for switching from a traditional utility system to a solar-powered one. There are rebates and tax credits, but also the knowledge that you’re helping improve the environment. If you’re wondering, “How many solar panels do I need?” a few essential elements will answer the question. The tips below will help walk you through calculating how many solar panels you need and what factors will affect that number. While calculating these numbers yourself can give you an idea of what kind of solar array you’ll need, know that a qualified solar panel installer will do all of these calculations for you if you proceed with installing solar panels.

You’ll need to know three things: your annual energy usage, the solar panel wattage, and the production ratio.

”How much solar do I need?” is an expected question from a homeowner new to solar systems. To figure out exactly how many panels are required to run a home, you will need to consider your annual energy usage, the solar panel wattage, and the production ratio. These three factors are essential when converting to a solar system. While this calculation will give you a ballpark estimate, consider that other factors will affect the actual number of panels, which will be touched on later.

If you’re looking to install a designated solar heating system—one where solar panels heat liquid or air and convert it into central heating for a home—you’ll also need an experienced HVAC installer who can convert your existing central heating system to a solar heating one.

Maybe it’s time to call in a solar energy pro. Get free, no-commitment estimates from experts near you.

Look at your utility bill to determine how many watts you use.

Energy usage is measured in kilowatt-hours (kWh). KWh does not mean the number of kilowatts you use in an hour, but rather the amount of energy you would use keeping a 1,000-watt appliance running for 1 hour. The number of appliances that use power and how often they’re running will affect the usage. Anything plugged into a wall will count toward your energy usage, and bigger appliances like refrigerators and dishwashers use more power than a phone charger. For example, a 50-inch LED television uses around 0.016 kWh per hour, whereas an electric dishwasher will use about 2 kWh per load.

As of 2019, the average American household uses 10,649 kWh of electricity per year, according to the U.S. Energy Information Administration. But the best way to determine how much power you’ll need is by looking at your utility bills from the past year. This will give you a solid idea of your real-life energy needs, especially as power usage fluctuates throughout the year. The amount of energy you use will dictate the size of the system you need.

While installing solar panels can often reduce or even completely offset your monthly electric bill, remember that electric rates and usage are volatile factors. If the price of electricity or the amount you use drastically changes, your savings could change as well. For example, central to southern California is considered a great place to install solar panels because of the frequent sun—but it also is a state that regularly sees higher electricity prices.

Once you know your home’s energy demands, it’s time to start looking at panels. Look at different panels and see what the wattages are. The solar panel wattage is also known as the power rating, and it’s a panel’s electrical output under ideal conditions. This is measured in watts (W). A panel will usually produce between 250 and 400 watts of power. For the equation later on, assume an average of 320 W per panel.

Use your annual energy consumption and solar panel rating to calculate the production ratio.

You can calculate the production ratio when you have the numbers for your annual energy usage and the solar panel wattage. The production ratio is a system’s estimated energy output over time (measured in kWh) compared to the actual system size (measured in W). To calculate the production ratio, divide the energy output by the system’s total wattage. In the U.S., production ratios tend to fall between 1.3 and 1.6.

Maybe it’s time to call in a solar energy pro. Get free, no-commitment estimates from experts near you.

Once you have these three numbers, it’s time to calculate the number of panels. The formula is:

Number of panels = system size / production ratio / panel wattage

For example, using 10,649 kWh (the average energy usage of an American household), 1.3 (the low end of common production ratios), and 320 W (the average wattage of a solar panel):

Number of panels = 10,649 kWh / 1.3 / 320 W = 25.6

From this calculation, you can estimate that a house with these power requirements would need about 25 panels that produce 320 W.

Take the amount of sun your home receives into consideration.

Remember that this calculation assumes that the panels are running under optimum conditions. direct sunlight means your home can convert more energy into electricity. In states like Arizona and New Mexico, which are known to produce more sunlight than states in the Northeast, homeowners will likely need fewer solar panels. Nevada, Utah, California, Texas, and Colorado are other locations that usually produce more sunlight. But even if you live in a region or state with long winters or one that’s outside of the Sun Belt, you may need to purchase more solar panels to effectively run the home.

The size, shape, and material of your roof will also affect the best placement of solar panels. The ideal roof has no shade coverage from trees and large amounts of space facing south, west, or east—these are the directions that receive the most sunlight throughout the day in the northern hemisphere. Roofs with steep pitches make installing solar panels more difficult and can mean that an installer may not be able to fit as many panels on the roof. The same goes for oddly shaped roofs.

The number of solar panels you need will also depend on if your home will be on-grid or off-grid.

Often the more popular option, on-grid solar panel systems are connected to the public utility grid. If there isn’t enough sun to provide full power, the house can pull energy from the traditional grid, so it doesn’t have to go without electricity. On the other hand, an off-grid system is not connected to the public grid and is more common in rural or remote locations.

Off-grid systems rely on batteries to store power to keep the house running at night or on cloudy days. Off-grid systems will likely need more panels to run the house and store up excess energy. On-grid or off-grid systems can affect the overall cost of your solar power system.

Figuring out how much solar battery capacity you need is a task unto itself. Not enough capacity and you’ll run out of power in the middle of the night, but too much and you’ll add unnecessary complexity and maintenance costs. The number of batteries you need will also depend on the type of battery you choose. Lead acid batteries are more cost-effective, but lithium-ion batteries have better capacity, efficiency, and lifespan.

Maybe it’s time to call in a solar energy pro. Get free, no-commitment estimates from experts near you.

The type of solar panel will affect its efficiency.

There are three types of solar panels available: monocrystalline, polycrystalline, and thin film. Monocrystalline and polycrystalline panels are both composed of cells made out of silicon. The silicon pieces are assembled to form a rectangle and covered with a glass sheet. Monocrystalline solar cells are cut from a single silicon crystal, while polycrystalline cells are composed of fragments of silicon crystals. This difference in construction affects the efficiency and price. Monocrystalline panels are more efficient and perform better, but they’re also more expensive. Polycrystalline solar panel are more affordable, but you’ll compromise a bit on efficiency and performance.

There are also thin-film solar panels. Like the name suggests, the cells are thinner than monocrystalline or polycrystalline. However, the actual panel itself may not be significantly thinner than other styles of panels. Thin-film panels are more portable and flexible than either monocrystalline or polycrystalline, but they’re less efficient. Different panels will have different pros and cons depending on your home, geographic location, and more, and your solar installer will be able to give you advice on what’s best suited for you.

While this guide can give you general information about the number of panels, solar panel sizes, and types of systems you might consider, remember that a qualified solar power installer will be able to give you more information that’s specific to your home. Many variables play into how efficient solar systems are, and it can be difficult to take all of those into consideration when you’re not experienced.

The Best Solar Companies in California of 2023

We recommend Elevation, SunPower and Sunrun as three of the best solar companies in California.

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.

California is known for its sunshine — from the cloudless skies over Los Angeles to the sun-kissed beaches of San Diego. In this guide to the best solar companies in California, see how you can take advantage of the state’s bountiful sun by switching to solar energy and saving on your energy bill.

We at the Guides Home Team have completed rigorous research on the best solar companies across the U.S. and narrowed down the top solar panel installers in California. Read on to compare costs, solar equipment and servicing options, and possible energy savings.

• Compare Installers
• California’s Top Companies
• The Bottom Line
• California Solar Incentives
• Buyers Guide
• Methodology

Energy Star-certified products Comprehensive active monitoring 25-year warranties on products and labor

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

Compare The Best Solar Installers In California

Provider Avg. Cost of a 10 kW System Our Rating Compare Quotes

Elevation	10,000–15,000	4.4	Get My Quote
SunPower	15,000–20,000	4.8	Get My Quote
Sunrun	15,000–20,000	4.3	Get My Quote
ADT Solar	15,000–20,000	4.0	Get My Quote
Green Home Systems	20,000–25,000	4.0	Get My Quote
Momentum Solar	20,000–25,000	3.8	Get My Quote
Palmetto Solar	15,000–20,000	4.7	Get My Quote

Note: Pricing data is based on responses to our March 2023 solar cost survey of 1,000 homeowners with solar systems.

California’s Top Solar Energy Companies

All quoted in this review are for a professionally installed 10 kilowatt (kW) system and are based on our March 2023 solar cost survey of 1,000 homeowners with solar panels.

Pros and Cons

Pros Energy Star-certified products Minimum of 25-year warranties on products and labor for panels Has a comprehensive active monitoring service called Curb Cons No pricing information available online Only offers two payment options — full payment or solar loan

Elevation Overview

If you want to integrate solar energy across your home, we recommend Elevation. With its Elevated Home service, the company can upgrade your entire house to be sustainable and energy-efficient.

The company conducts an energy audit on your home, then creates a custom, fully integrated solar energy system, including monocrystalline solar panels, microinverters, electric vehicle (EV) chargers and solar batteries, plus energy efficiency services such as duct sealing and insulation.

All of Elevation’s products are Energy Star-certified and adhere to Environmental Protection Agency (EPA) standards. Elevation doesn’t list pricing information on its website, but it does provide a price-match guarantee.

Services

• Solar panel installation
• Solar battery installation
• EV charger installation
• Duct sealing
• Insulation
• Elevated Home service

Payment Options

Elevation offers two payment options: full payment upfront or a solar loan. While you can’t choose more affordable options such as solar leases or power purchase agreements (PPAs), a cash purchase or loan is more cost-effective over time and means you fully own your system.

Pros Over 30 years of experience, the most of any company on our list Offers panels with 20.9% to 22.8% efficiency ratings, some of the highest in the industry Extends 25-year service, product and production guarantees on all installations Cons Average costs are higher than other installers Some customers report service delays on broken system repairs

Founded in 1985, SunPower is the most experienced solar provider on our list, and it’s headquartered in San Jose, Calif. We recommend this company because of its positive customer feedback, selection of financing options and variety of services offered. Plus, SunPower manufactures its own solar panels and solar batteries, and its panels have some of the highest efficiency ratings in the industry.

• Solar panel installation
• Backup battery installation
• EV charger installation
• Mobile app
• System monitoring

SunPower offers cash purchases, loans, leases and PPAs to its customers. SunPower also has in-house loan financing, so you don’t have to worry about using a third-party lender to pay off your solar system. You can learn more about SunPower’s financing options on its website.

Pros Extends panel insurance to protect against theft or damage Has two solar leasing options Offers an optional service package that includes system monitoring Cons Has limited information about its products online Doesn’t include transparent online pricing

Sunrun makes the solar installation process personable through its custom solar systems. The company reviews your home, roof and sunlight exposure to calculate your system’s cost and energy usage. Technicians can also explain government incentives available to help save you money on your panels.

Sunrun was one of the first solar companies to offer a leasing program, with both a prepaid and monthly option available. Sunrun also offers a service package that includes an additional “bumper-to-bumper” system warranty that provides free equipment replacement and system repairs for 10 years, proactive monitoring and an insurance policy on your panels.

• EV charging system
• Mobile app
• Optional ongoing service package
• Solar panel installation
• System monitoring

In addition to Sunrun’s two leasing options, you can purchase a solar system outright or use the financing option. Financing may include no money down for those who qualify based on their credit score. Sunrun provides instant online quotes, but more accurate estimates require an in-person or virtual consultation.

Pros Provides a 25-year power guarantee All packages include 24/7 active system monitoring Has high customer review scores across online review platforms Cons Does not give pricing information or quotes online No EV charging stations or energy efficiency audits

ADT Solar (formerly Sunpro) provides a comprehensive solar system installation process, which includes system surveying, design, installation, maintenance and monitoring. The company stands out for its customer service, providing some of the most comprehensive power, product, performance and workmanship guarantees, each lasting 25 years.

ADT was the most popular provider in our survey of 1,000 homeowners with solar, with 239 of the 1,000 total respondents choosing it to complete their installation. To further the customer service experience, ADT Solar allows you to select the specific brand of your battery backup and solar panels, and it offers 24/7 customer service.

• Energy efficiency audits
• EV charging system
• Mobile app
• Optional service package
• Solar panel installation
• System monitoring

After an in-person or virtual consultation, ADT Solar provides a detailed estimate for your solar system. The company offers the four standard methods of payment: upfront purchase, solar loan, leasing or a PPA.

Pros Offers the widest selection of solar products on our list Financing options include 0 down for qualifying customers High customer satisfaction across online review platforms Cons No company ESG report or sustainability disclosures Only five years of industry experience

We like Green Home Systems for California residents because it offers a wide selection of solar products and brands. This includes solar shingles and solar tiles that provide a sleek, modern look not offered by most solar competitors.

Despite only having five years of experience in the solar industry, Green Home Systems has already earned excellent customer reviews across platforms. The company has an A rating with the Better Business Bureau (BBB) and earned 4.7 out of 5 stars based on customer reviews.

• Solar panel installations
• Solar roofing
• Backup battery installation
• EV charger installations
• Backup generators
• Energy efficiency audits
• System monitoring

Green Home Systems offers cash purchases and loans, the two most popular solar financing options. However, its loan options are through external partners and not administered in-house. The company does not offer leases or PPAs.

Pros Has a concierge service that handles all necessary permits and helps you enroll in government savings programs Offers seven different solar panel brands In-house solar battery option is available in California Cons Doesn’t provide pricing or quotes online Has mixed customer reviews on online platforms

If you’re worried that switching to solar might be too difficult, Momentum Solar is an excellent choice. The company focuses on making the transition to solar energy easy and engaging, and it handles every aspect in-house, from design to financing. Momentum also offers an impressive variety of solar panels from numerous manufacturers so you can build a system that meets your energy needs.

Momentum’s pricing runs slightly higher than competitors, partly due to its FOCUS on providing a complete in-house solar experience and only servicing states with a well-established net-metering program (like California).

• Solar panel installation
• EV charging system
• Mobile app
• Optional service package
• System monitoring
• Energy efficiency audits

Momentum Solar allows customers to buy solar panels through a lump-sum payment or a solar loan. You can also lease your panels or enter into a PPA through the provider. However, leases and PPAs constitute third-party ownership and will disqualify you from cost-saving state and federal solar incentives.

Pros Offers the Peace of Mind Protection Plan, which includes additional monitoring and discounts on maintenance services Has a smartphone app for system monitoring and customer support Provides an online calculator for estimating solar savings Cons Not much pricing information online Charges an additional fee for monitoring services

We named Palmetto Solar one of the top solar companies in California because it offers comprehensive coverage for your solar system equipment. The company handles every part of the solar installation process — from custom designing to permitting — and its systems include high-performance black rooftop panels, a standard inverter and a power grid connection.

The company extends a standard 25-year output warranty that covers inefficiencies in your system’s performance. It also offers a unique, optional Peace of Mind Protection Plan that covers labor for replacing or servicing parts, guaranteed service timelines, discounts on pest abatement, solar panel cleaning, and panel removal and reinstallation.

• Solar panel installation
• Energy efficiency audits
• Battery installation and backup
• Energy storage
• Installation of the Tesla Powerwall integrated battery system
• Installation of energy consumption meters to monitor usage
• Panel cleaning
• Panel removal and reinstallation
• Peace of Mind Protection Plan
• Pest abatement

Palmetto offers four payment methods: lump-sum, solar loan, solar lease or a PPA.

The Bottom Line

Given the Golden State’s diverse landscape, different solar companies will fit the needs of different California homeowners. For example, if you’re concerned about comprehensive warranties and system savings, Palmetto Solar is an ideal option. Or, if you favor company experience and high-quality solar energy solutions, SunPower is considered an industry leader.

Momentum Solar is a good choice for California homeowners who want to generate possible revenue through the state’s tradable renewable energy credit (TREC) market and established net-metering programs. If you’re interested in top-of-the-line solar equipment and a cutting-edge panel design, Green Home Systems’ solar roofs let you save on electricity without distracting from your home’s visual appearance.

To get started on your solar journey, use our tool below to get matched to the top solar providers in your area.

Solar Incentives in California

There are a variety of California solar tax credits and incentives you can apply to your solar investment. We’ve listed some of the most significant statewide incentives below.

Federal Solar Tax Credit

Homeowners in the U.S. are eligible for a federal tax credit when they install solar on their property. This incentive provides a 30% federal tax reduction on all solar system components that you can apply to your federal tax return. Under the Inflation Reduction Act, the credit will reduce to 26% in 2033 and 22% in 2034 before expiring in 2035 (unless Congress renews it).

Net Metering in California

California (like most other states) has a net metering program that allows you to sell any excess energy your panels generate back to the power grid in exchange for electricity bill credits. Solar customers in California with systems interconnected to the grid through April 14, 2023, are eligible for NEM 2.0, the state’s current net metering structure. Under NEM 2.0, customers earn the full retail value for any excess energy their solar panels generate. Customers who submit interconnection applications on or after April 15, 2023, will be eligible for the new Net Billing tariff (NBT), instead of NEM 2.0. Under the NBT program, customers will earn the grid value of any excess energy their solar panels generate. In other words, the NBT program will likely pay customers less than the full retail rate of the electricity it buys back. However, the rate can fluctuate — during times with very high energy demand, like hot summer evenings, the value may actually exceed the full retail rate. You can learn more about net metering in California on the state’s Public Utilities Commission website.

Other State Solar Initiatives

• Solar Property Tax Exclusion: The Active Solar Energy System Exclusion ensures your property taxes will not increase after adding solar panels until the end of the 2024 fiscal year. This exclusion applies to you if you install a new home solar system in California or build a house with solar panels.
• Self-Generation Incentive Program (SGIP): Designed by the California Public Utilities Commission, the SGIP offers qualifying residents a rebate for installing a home energy storage system. Program eligibility is tied to your utility company. However, this incentive is a tiered-block program, so the value declines over time as more battery installations occur in the state.
• Equity Resilience Incentives: This program is offered in conjunction with SGIP and offers battery storage incentives to help lower-income, medically vulnerable and at-risk fire communities. It provides rebates of either 850 or 1,000 per kilowatt-hour (kWh), which can cover a large percentage of upfront energy storage system costs.
• Disadvantaged Communities–Single-Family Solar Homes (DAC-SASH): The DAC-SASH program provides savings for low-income households in economically and environmentally disadvantaged communities using solar energy. The program is currently slated to run through 2030.

How To Choose the Best Solar Company in California

There are various factors to think about when researching solar installation companies and solar panel systems in California. While cost is essential, we recommend balancing price with services offered, customer reviews, warranty lengths and other important factors. Conversely, going with the most expensive installer doesn’t always guarantee high-quality products or services.

You should also carefully consider purchasing options before you buy solar panels for your home. For example, consider whether a lease or a PPA will save you money on the cost of solar in the long run, since those two options prevent you from taking advantage of tax credits. While paying for your system in cash is not realistic for all homeowners, a solar loan could be a suitable alternative.

As with any home improvement project, doing your research beforehand is an important first step. We recommend comparing free quotes from at least three of the companies on this list before getting started with your solar installation project.

Energy Star-certified products Comprehensive active monitoring 25-year warranties on products and labor

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

Frequently Asked Questions About Solar Companies in California

What is the average cost for solar panels in California?

The average cost per watt of solar panels in California is 2.51, based on information from SunPower. Based on our survey of 1,000 homeowners with installed solar systems, solar panels cost between 15,000 and 20,000. However, residential solar systems can run upwards of 25,000 with installation costs.

Is it worth going solar in California?

Yes. Whether you live in the state capital of Sacramento or farther down in Southern California, it’s worth going solar for both potential energy savings and to support clean energy. Between the state’s sun exposure and the number of tax incentives and rebates, California is one of the best states to install a residential solar power system. Plus, installing other solar technologies like backup batteries can help keep your power on during outages.

Is Sunrun the same as SunPower?

Despite their similar names and offerings, Sunrun is not the same as SunPower. While both offer solar services, SunPower is a manufacturer and installer, while Sunrun is primarily an installer. However, Sunrun may use SunPower’s panels.

What is the average return on solar panels?

A typical photovoltaic (PV) system will see a 20% return on investment in the first year. However, your return on investment could be even higher based on California’s abundant sunlight and solar incentives and rebates.

Methodology: Our System for Ranking the Best Solar Companies

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.

The Cost of Solar Panels: Is It Worth It?

Do the benefits of solar panels outweigh their costs?

Nathaniel Riley brings 28 years of experience in financial services, including merger-arbitrage trading, hedge funds, and alternative investments.

​Somer G. Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years. Her expertise covers a wide range of accounting, corporate finance, taxes, lending, and personal finance areas.

Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies.

What Is Solar Power for the Home?

Homeowners who install solar power systems can receive numerous benefits: lower electric bills, lower carbon footprints, and potentially higher home values. But these benefits typically come with significant installation and maintenance costs and the magnitude of the gains can vary widely from one house to another.

This article will help homeowners make the financial calculations required to determine the viability of solar power in their homes.

Key Takeaways

• Those seeking to go green may want to consider equipping their home with solar panels.
• Not only is solar power good for the environment, but you can earn money selling back excess power to the grid.
• While costs have come down over the past years, installation and maintenance of solar panels can be quite expensive.
• Solar panels are best suited for homes that receive ample sun exposure throughout the year.
• Before committing to solar power, be sure to understand both the social and economic factors.

Understanding Solar Power

In principle, working out whether it makes financial sense to install solar power for your home is simple. You will need to calculate:

• The cost of a solar power system
• How much energy it will produce
• What you would otherwise pay for the same amount of energy
• How many years it will take for your upfront investment to pay for itself in saved energy costs
• Whether the system will pay for itself in five years

If it does and you have the upfront capital, it’s probably a great idea. If you’ll have to wait longer for savings or take out a loan to afford the system, you’ll need to think the decision through carefully.

In practice, however, things are not this simple. There is a large variation in each of these factors, and that can make the costs and benefits of installing solar power for two homes—even if they are neighbors—radically different.

There are some tools that can help, though. Solar Reviews offer a calculator that will quickly provide you with representative costs and savings for a solar power system in every part of the U.S. Calculators like this are a good place to start if you are new to solar energy and want to understand the basic cost model.

In the rest of this article, we’ll take you through each of the key factors you should consider when calculating the costs and potential savings of solar power for your home.

Before getting solar panels, get quotes from several reputable installers to compare.

The Cost of Solar Power for Homeowners

First, let’s look at the cost of installing a solar power system for your home. The average, upfront cost of a residential solar power system is between 3,500 and 16,000.

Why the huge range of costs? Well, a lot of the variation depends on the size of the system you’d like to install and the type of panels you want to use. Whatever system you use, keep in mind that solar power is capital intensive and the main cost of owning a system comes upfront when buying the equipment. The solar module will almost certainly represent the largest single component of the overall expense.

There are some additional costs, as well. Other equipment necessary for installation includes an inverter (to turn the direct current produced by the panel into the alternating current used by household appliances), metering equipment (if it is necessary to see how much power is produced), and various housing components along with cables and wiring gear. Some homeowners also consider battery storage. Historically, batteries have been prohibitively expensive and unnecessary if the utility pays for excess electricity that is fed into the grid (see below). The installation labor cost must also be factored in.

In addition to installation costs, there are some further costs associated with operating and maintaining a PV solar array. Aside from cleaning the panels regularly, inverters and batteries (if installed) generally need replacement after several years of use.

Subsidies

While the above costs are relatively straightforward—often a solar installation company can quote a price for these for a homeowner—determining subsidies available from the government and/or your local utility can prove more of a challenge. Government incentives change often, but historically, the U.S. government has allowed a tax credit of up to 30% of the system’s cost.

details on incentive programs in the U.S., including programs within each state, can be found on the Database of State Incentives for Renewables Efficiency (DSIRE) website. In other countries, such information is often available on government or solar advocacy websites. Homeowners should also check with their local utility company to see whether it offers financial incentives for solar installation and to determine what its policy is for grid interconnection and for selling excess power into the grid.

97.7 gigawatts

The U.S. installed 19.2 gigawatts of solar PV capacity in 2020 to reach 97.7 GWdc of total installed capacity, enough to power 17.7 million American homes.

Calculating Your Energy Production

The second factor you’ll need to consider in your calculations is the amount of energy your system will produce and when it will do that. This can be a very complicated calculation to make, even for experienced solar engineers. However, let’s run through the basics.

One of the most important considerations is the solar irradiation levels available in the home’s geographical location; in other words, how sunny it is where you live. When it comes to using solar panels, being closer to the equator is generally better, but other factors must be considered. The National Renewable Energy Laboratory (NREL) produces maps for the U.S. showing solar irradiation levels and the tools on its website provide detailed solar information for specific locations within the U.S.

Equally important is your home’s orientation: For rooftop arrays, a south-facing roof without trees or other objects obstructing sunlight maximizes the available solar energy. If this is not available, panels can be mounted on external supports and installed away from the house, incurring additional costs for the extra hardware and cables.

And then you must factor in the size of your system. Solar panel size is quoted in terms of the theoretical electrical output potential in watts. However, the typical output realized for installed PV systems—known as the capacity factor—is between 15% and 30% of the theoretical output. A 3 kilowatt-hour (kWh) household system running at a 15% capacity factor would produce 3 kWh x 15% x 24 hr/day x 365 days/year = 3,942 kWh/year or roughly one-third of the typical electricity consumption of a U.S. household.

How Much Will You Save?

Once you know how much a solar power system will cost upfront, and how much energy it will produce, you can (theoretically) predict how much you can save in energy costs per year.

This is another tricky calculation, however, because a lot depends on how you pay for electricity at the moment. Utilities often charge residential consumers a flat rate for electricity, regardless of the time of consumption. This means that instead of offsetting the expensive cost of peak electricity production, homeowners’ solar power systems merely offset the price they are charged for electricity, which is much closer to the average cost of power production.

However, many utility companies in the U.S. have introduced pricing schemes that allow homeowners to be charged at different rates throughout the day in an attempt to mirror the actual cost of electricity production at different times: This means higher rates in the afternoon and lower rates at night. A PV solar array may be very beneficial in areas where this sort of time-varying rate is used since the solar power produced would offset the most costly electricity.

Exactly how beneficial this is for a given homeowner depends on the exact timing and magnitude of the rate changes under such a plan. Similarly, utilities in some locations have pricing schemes that vary over different times of the year due to regular seasonal demand fluctuations. Those with higher rates during the summer make solar power more valuable.

Some utilities have tiered pricing plans in which the marginal price of electricity changes as consumption rises. Under this type of plan, the benefit from a solar system can depend on the electricity use of the home; in certain areas subject to rates that increase dramatically as consumption increases, large homes (with large energy needs) may benefit most from solar arrays that offset high-cost marginal consumption.

For some homes, it might even be possible to make money by selling solar power back to the grid. In the U.S., this is done through net metering plans, in which residential consumers use the power that they put into the grid (when the rate of electricity generation from the solar array is greater than the rate of household electricity consumption) to offset the power consumed at other times; the monthly electric bill reflects net energy consumption. The specific net metering regulations and policies vary across regions. Homeowners can refer to the DSIRE database and should also contact their local utilities to find more specific information.

Calculating Solar Power Costs

At this point, you will be in a position to make a final calculation, and an assessment of whether solar power makes sense for you.

The overall cost and benefit of a solar system can theoretically be evaluated using the discounted cash flow (DCF) method. Outflows at the beginning of the project would consist of installation costs (net of subsidies) and inflows would arrive later in the form of offset electricity costs (both directly and through net metering).

However, rather than using DCF, the viability of solar power is usually evaluated by calculating the levelized cost of electricity (LCOE), then comparing it to the cost of electricity charged by the local utility. The LCOE for household solar will typically be calculated as cost/kilowatt-hour (/kWh or ¢/kWh)—the same format commonly used on electricity bills. To approximate the LCOE, one can use the following equation:

LCOE (/kWh) = Net Present Value (NPV) of the Lifetime Cost of Ownership / Lifetime Energy Output (kWh)

The useful life of a PV solar module is generally assumed to be 25 to 40 years. The cost of ownership includes the maintenance costs, which must be discounted to find the NPV. The LCOE can then be compared to the cost of electricity from a utility; remember, the relevant price is that which occurs during times at or near peak PV solar production.

Is Solar Power Worth It?

Once you’ve worked through all of these calculations, you’ll likely end up with a single number—the number of years it will take for a solar system to pay for itself in savings from your energy bills. If you live in a sunny part of the country and have high utility bills at the moment, you could be looking at a system that will reach this point in five years. Other homeowners may have to wait 10 or 20 years to reach this point.

In other words, most homeowners will eventually see a benefit from a solar power system; it might just take decades for this to be realized. Whether it is worth installing such a system therefore often comes down to a number of much less technical factors than those we’ve listed above: how long you are going to stay in your home, the subsidies available in your area, and simply whether you want to do your bit for the environment.

Pros and Cons of Solar Panels for Your Home

Like most things, solar power has its benefits and drawbacks. At the same time, some economic costs may be defrayed by the social benefits to the environment and lowering your carbon footprint, which may be more important to you than a purely monetary evaluation.

• Green energy that lowers your carbon footprint
• Net metering allows you to sell back excess energy produced
• You may be eligible for certain tax breaks
• Installation and maintenance costs are still high
• Solar only works when the sun is out
• Parts of the system need to be replaced every few years
• Some tax breaks may have expired or will be expiring

Can a House Run on Solar Power Alone?

Practically, it is not often possible. This is because solar only works when the sun is shining—when it is cloudy or nighttime, they do not generate electricity. There are some battery solutions to provide power during these times, but they still tend to be quite expensive. Most homes with solar panels still rely on the grid from time to time.

Do You Really Save Money With Solar Panels?

Depending on where you live, it is possible that the system can pay itself back and more over time. This is because you won’t be spending as much money buying electricity from your utility. If net metering is in place, you could reduce your bills even further.

How Much Does a Solar Panel Cost?

have been coming down steadily over the years. The total cost will depend on how many kilowatts of power your array will generate. According to consumer reports, after solar tax credits are accounted for, the cost for a solar panel system on an average-sized house in the U.S. in 2021 ranges from 11,000 to 15,000.

How Long Will It Take To Recoup the Initial Cost?

Depending on where you live and the size of your system it can take, on average, anywhere from 10 to 20 years to break even on a solar installation.

The Bottom Line

Determining whether to install a PV solar system may seem like a daunting task, but it is important to remember that such a system is a long-term investment. In many locations, solar power is a good choice from a financial perspective.

Even if the cost of solar power is found to be marginally more expensive than electricity purchased from a utility, homeowners may wish to install solar power to avoid future potential fluctuations in energy costs, or may simply wish to look beyond their personal financial motivations and use solar for green living.