How Much Do Solar Panels Cost In Your State? (Hidden Fees, Tax Credits)
As many residents of the United States begin to pivot towards renewable energy sources, you might be asking: how much do solar panels cost and how do I get started?
In 2022, installing solar panels on your home can cost as little as ten thousand dollars. While this is certainly a lot of money, any argument against solar energy being too expensive is ultimately undone by the fact that by installing solar panels on your home, you can effectively reduce your electric bills to zero.
Although the exact cost of a solar panel system in your state will vary, understanding the hidden fees as well as the tax credits you can earn if you do decide to go green with your home power, can make the decision much easier.
Not to mention the benefits it has on the planet by lowering your carbon emissions and your eco-footprint!
Average Solar Panel Installation Cost by State
The price of a solar panel system differs by state, but on average, a 6 kilowatt (KW) system will cost you anywhere from 12,000 to 20,000. Many people argue the financial and environmental benefits of a solar panel system far outweigh the initial installation cost.
While solar panels effectively generate free electricity, there is an upfront cost for the materials and installation process.
This table shows the average residential solar panel system (about 6 kilowatts or 6 kW) cost to purchase and install, but it doesn’t factor in U.S. federal solar tax credits. (Additional information below)
View this chart as a rough estimation of how much you will pay upfront, because it presumes several factors, including:
Keep in mind, it does not include additional battery capacity for areas that get less sunlight during the day. 1. 2
|Approx. Cost of Solar Panel (6 KW System) Installation
|How Much Do Solar Panels Cost in Alabama
|12,120 – 17,100
|How Much Do Solar Panels Cost in Alaska
|13,380 – 18,780
|How Much Do Solar Panels Cost in Arizona
|12,900 – 15,180
|How Much Do Solar Panels Cost in Arkansas
|14,520 – 16,440
|How Much Do Solar Panels Cost in California
|14,460 – 19,260
|How Much Do Solar Panels Cost in Colorado
|16,740 – 21,180
|How Much Do Solar Panels Cost in Connecticut
|15,240 – 18,480
|How Much Do Solar Panels Cost in District of Columbia
|15,600 – 24,840
|How Much Do Solar Panels Cost in Delaware
|12,540 – 16,740
|How Much Do Solar Panels Cost in Florida
|13,380 – 17,220
|How Much Do Solar Panels Cost in Georgia
|16,020 – 19,740
|How Much Do Solar Panels Cost in Hawaii
|11,830 – 20,280
|How Much Do Solar Panels Cost in Idaho
|14,400 – 24,480
|How Much Do Solar Panels Cost in Illinois
|16,500 – 20,100
|How Much Do Solar Panels Cost in Indiana
|14,760 – 19,080
|How Much Do Solar Panels Cost in Iowa
|19,440 – 20,400
|How Much Do Solar Panels Cost in Kansas
|8,940 – 12,360
|How Much Do Solar Panels Cost in Kentucky
|14,100 – 18,240
|How Much Do Solar Panels Cost in Louisiana
|16,020 – 20,100
|How Much Do Solar Panels Cost in Maine
|14,760 – 17,400
|How Much Do Solar Panels Cost in Maryland
|15,180 – 20,340
|How Much Do Solar Panels Cost in Massachusetts
|16,020 – 19,860
|How Much Do Solar Panels Cost in Michigan
|15,540 – 20,580
|How Much Do Solar Panels Cost in Minnesota
|16,860 – 20,340
|How Much Do Solar Panels Cost in Mississippi
|11,880 – 16,500
|How Much Do Solar Panels Cost in Missouri
|10,260 – 14,520
|How Much Do Solar Panels Cost in Montana
|15,060 – 19,380
|How Much Do Solar Panels Cost in Nebraska
|10,440 – 17,280
|How Much Do Solar Panels Cost in Nevada
|12,420 – 15,300
|How Much Do Solar Panels Cost in New Hampshire
|16,860 – 20,460
|How Much Do Solar Panels Cost in New Jersey
|12,780 – 16,980
|How Much Do Solar Panels Cost in New Mexico
|14,760 – 20,880
|How Much Do Solar Panels Cost in New York
|16,380 – 21,060
|How Much Do Solar Panels Cost in North Carolina
|13,800 – 18,480
|How Much Do Solar Panels Cost in North Dakota
|8,340 – 11,820
|How Much Do Solar Panels Cost in Ohio
|14,580 – 17,460
|How Much Do Solar Panels Cost in Oklahoma
|11,280 – 20,040
|How Much Do Solar Panels Cost in Oregon
|14,760 – 18,840
|How Much Do Solar Panels Cost in Pennsylvania
|14,640 – 19,560
|How Much Do Solar Panels Cost in Rhode Island
|15,780 – 20,220
|How Much Do Solar Panels Cost in South Carolina
|16,380 – 19,620
|How Much Do Solar Panels Cost in South Dakota
|11,280 – 17,580
|How Much Do Solar Panels Cost in Tennessee
|7,800 – 11,820
|How Much Do Solar Panels Cost in Texas
|14,280 – 18,840
|How Much Do Solar Panels Cost in Utah
|13,800 – 17,880
|How Much Do Solar Panels Cost in Vermont
|12,900 – 20,820
|How Much Do Solar Panels Cost in Virginia
|15,540 – 19,500
|How Much Do Solar Panels Cost in Washington
|14,100 – 17,700
|How Much Do Solar Panels Cost in West Virginia
|13,020 – 20,280
|How Much Do Solar Panels Cost in Wisconsin
|16,800 – 19,800
|How Much Do Solar Panels Cost in Wyoming
|14,340 – 16,680
As solar technology continues to evolve, the are expected to drop as units become more efficiently produced. For now, however, this is about how much a solar panel system will initially set you back in your state. 3. 4
Energy Cost Per State (How Much You Could Save with Solar Panels)
To understand just how much money you’ll be saving by installing a solar panel system, you first need to know about how much money you currently spend on energy.
This number varies on a state-by-state basis due to how each state gets the majority of their energy, but the average cost of one kilowatt-hour (kwh) in the U.S. is 10.59 cents.
The reason for the difference is the way energy is produced. In some areas, hydropower plants generate most electricity, while others are fueled by coal burning in other regions of the country.
The table below shows the average retail price of one kwh in cents per state:
|U.S. State and District
|Average Retail Price of Electricity Kilowatt-Hour in Cents
|District of Columbia
History of Green Energy
Human application of solar thermal energy has a long and storied past. In fact, the Ancient Egyptians are now commonly known as being some of the first people to truly harness solar energy on a large scale.
They were by no means the only ones. Thanks to recent discoveries, it is now known that the Ancient Egyptians used solar to heat their homes. Similar techniques were also incorporated by the Ancient Greeks and Romans, who designed their homes and common spaces to be kept warm by the sun. (Incidentally, these civilizations also used water fountains and eco-friendly architectural designs to cool their homes during the summer!)
One such example is the Roman bathhouses. Often, the southernmost wall of a bathhouse would act as a window so that passive solar energy could help heat the baths and lessen the amount of firewood that needed to be burned.
Similar techniques were employed by Native American tribes, with Mesa Verde’s well-known cliff houses being another perfect example of using solar power as a method for indoor heating. The same is also true of traditional Chinese buildings. All of these cultures and many more used solar energy in innovative ways. 5
And now, in the twenty-first century, engineers and scientists are designing systems like solar panels and other methods of capturing and harnessing solar energy. And while these systems have only recently become affordable, their success is a testament to how much people desire clean, renewable energy.
So, if you’re wondering how much do solar panels cost, you need to first ascertain whether they will be used for commercial or residential use, and then understand how they work in order to find the exact price.
What Is a Solar Panel?
According to the United States Office of Energy Efficiency Renewable Energy, the amount of solar radiation (light) that strikes the earth in approximately an hour and a half is enough to support a full year of global energy consumption.
By allowing that solar radiation to pass through photovoltaic (PV) panels, also known as solar panels, it is possible to convert that light spectrum into usable electrical energy. This renewable energy can be used immediately, or be stored in batteries to be used when it is needed.
If you take a more granular approach, you will see that solar panels are made up of PV cells. These cells capture energy when sunlight is absorbed, and this energy is then converted to electrical charges.
But, how many solar panels do you need and how much power do they generate?
How Many Solar Panels Should You Install:
In 2022, an average solar panel produces about one kilowatt-hour (kWh) per day. However, an average American household (regardless of state) uses about 30 kWh of electricity a day.
So, you will need about 30 solar panels to generate all of that electrical energy, for an average dwelling. However, your energy use may be more or less from the national average. Fortunately, most electricity bills print the exact amount of kilowatt hours used in daily, monthly, and yearly amounts.
To determine how many solar panels you will need, carefully consider each of the following factors:
Consider Your Home’s Sunlight Exposure:
In areas of the U.S. that receive more sunlight throughout the year, the cost of a solar panel system will more quickly be surpassed by how much is saved on residential energy consumption.
So, before you buy a solar panel system, consider how advantageous it is for your location. The Environmental Protection Agency (EPA) has cataloged the Average Annual Daily Potential Solar Energy. Depending on where you live, the number of peak sun hours that it averages will impact how much do solar panels cost.
(Image: Billy J. Roberts, National Renewable Energy Laborator 12 )
You can also contact your local weather service to find out the peak sun hours for your specific area.
Calculate Your Daily Energy Usage:
To determine your daily energy usage, use this simple calculator:
- Find your most recent utility bill. It’s best if you have the last 12 months so you can calculate your average monthly energy usage.
- Add up the numbers recorded beneath “kWh” used on each bill. Then divide this number by 12. This is your monthly average.
- Divide your monthly average by 30 to get your daily kWh average.
- You will now have all the information needed to buy the correct number of solar panels for your home.
Research Federal and State Incentives
The U.S. federal government and many state governments offer lucrative incentives for installing solar panel systems on your home or business, in the form of tax deductions and credits. In many cases, this establishes a substantial reduction in how much out-of- you’ll need to spend. The drawback is that you have to wait to get the benefit until your taxes are filed.
The reason for the incentives is based on the current climate crisis and the greenhouse gasses generated by traditional electricity production. In the U.S., hydro-power plants provide energy to many regions, but globally, coal-fired generators are the norm.
This burning of fossil fuels to make electricity is responsible for massive amounts of carbon emissions being added to the atmosphere every day. In fact, just five power plants around the world were responsible for generating 73 percent of global electricity emissions in 2018.
Installing a solar panel system on your business or home is one of the best ways to lessen your carbon footprint because they reduce the need for electricity provided by non-renewable sources.
Solar Energy: Solar Panel Benefits and Drawbacks
According to the Environmental Protection Agency, in the last decade, an increasing number of families and individuals have chosen to install solar panels on their houses. This is partly due to the fact that residential solar panels have become more affordable and the financial benefits are impressive.
Although your decision to install solar panels may stem from a desire to reduce your carbon footprint, you’ll also be able to reduce your home (or business) yearly expenses.
Benefits of Choosing Solar Power
- It reduces your carbon footprint.
- It reduces your electrical bills. The initial monetary investment is quickly surpassed by the amount of money you save on electricity.
- It reduces your dependence on fossil fuels.
- It can improve the value of your residence.
- Low maintenance costs.
- Excess energy is stored and used during the night.
- If you have an electric car, you can charge it directly off your new grid.
- If there is an outage in your area, you will still have electricity because your energy is being produced and used on-site.
- It stimulates interest and investment in solar technologies which often leads to new employment opportunities.
- Depending on your living situation, you may be able to live entirely off the grid and use only solar energy.
- The federal government offers grants, tax incentives, and rebate programs to help with the installation cost.
Drawbacks to Solar Power
- Space: the biggest drawback of solar is the sheer amount of space that needs to be dedicated to it. Luckily, this isn’t as bad as it sounds. Most residential solar panels are installed on roofs, though you can also install them in a yard. You will also need to set aside space for the power bank so that you will have power during the night.
- Cloudy days and winter months lower the amount of energy you can produce. Also, if your house is surrounded by large trees, solar panels may simply not be viable (but there are ways to get around that).
- The initial monetary investment can be quite large. While your solar panels will pay off in the long run, buying the materials and paying contractors to install them can seem daunting.
- Solar panel efficiency is not yet at 100 percent. Solar technologies are still being improved, so the current generation of solar panels may not be as efficient as those in the future.
- Your geographical location may also change the efficiency of your solar panel system. You may need more to supply enough power for your home or business. 6
Additional Costs Associated With Solar Panel Systems
A standard 6 kW solar system will cost around 20,000 with parts and installation, but there are additional costs that you should also consider. Panels last for approximately 25 years before you’ll need to upgrade or replace them, but there are also batteries, site evaluations, and an inverter to factor into the cost equation.
There are two primary components to a system: panels and inverters. The panel is the part you see on rooftops and is located on the ground, featuring the PV cells that grab energy from the sun. The inverter is the device that converts direct current (DC) electricity into alternating current (AC).
Solar panels (like almost every generator) produce DC which then needs to be converted into AC in order to be used by your home’s appliances, electronics, and heating and cooling system. If you are running your solar panels directly into your house’s electrical panel, you must install an inverter before using the panels.
This is where a contractor is needed. Before installing solar panels, you will need to set up a general site visit and an engineer visit. The general site visit allows a contractor to evaluate how best to install solar panels in your place of residence, and many of these individuals will perform the initial site visit for no charge. They will also provide you with additional information on what exactly you need to order and (if the contractor doesn’t have an engineer on the payroll) provide names of reputable engineering services who can evaluate the structure for feasibility.
An engineer should also visit the site and evaluate the structural integrity of your roof, as well as test the capacity of the electrical panel, and determine whether it needs to be upgraded or updated. In some instances an upgrade is required because newer solar panels may require more amps of current.
After these two visits are completed, you can sign the contract and purchase the materials.
Additional costs also include:
- Changes to your home insurance policy (in some cases, the policy amount may decrease).
- Site ‘surprises’… as with any major home improvement project, the unexpected does happen, so be prepared for ‘change orders’ to the contract, which may increase the labor or installation amount.
Defining the Federal Solar Tax Credit
If you install a solar panel system on your home or business in the United States, you can claim a tax credit on federal income taxes for a percent of the cost of a PV system. This is also true for other renewable energy technologies.
The primary qualification for this solar tax credit is that you have installed and are generating electricity with solar panels. While there are sometimes additional requirements, this fact will almost always qualify you for a tax exemption.
This is particularly important for homeowners looking to install a system by the end of the 2023 tax year. If you choose to install solar panels before then, you are eligible for a 22% solar tax credit, but this is subject to change.
Right now, the tax credit is set to expire in 2024. However, Congress has the opportunity to renew it.
If you have already paid for solar panel installation and are currently using them to produce some percentage of the energy you use every day, then you may also be eligible to receive a solar tax credit.
You can even receive a partial tax credit if you invest in a local solar project. These are off-site projects which act as solar energy lenders. You pay a specific price to receive a certain amount of your energy from renewable sources.
You may wish to contact a legal advisor to gain a better understanding of exactly how you can qualify for the solar tax credit. 7
What Is a Solar Tax Credit: Are You Eligible to Claim It?
The primary qualification for receiving the federal solar tax credit is by generating electricity, but there are some additional ways to decide whether you qualify for the tax bonus, including:
- Installation of your solar panel system took place between January 1, 2006, and December 31, 2023.
- The solar panel installation was done to your primary or secondary residence in the United States and the electricity generated by the system does not exceed the electricity usage of your home or business.
- You own the PV system and either paid for or financed the solar panel installation.
- The PV system is either new or being used for the first time. The solar tax credit must only be claimed on the initial installation.
Solar Panels Cost Lessened
The following tables show the value of federal tax credits in your state based on when you have installed, or have decided to install a solar panel system.
The first shows the value of a solar tax credit during the 2021 and 2022 tax years, while the second table shows the value of a solar tax credit during the 2023 tax year.
As with the actual installation, alternate per state and may continue to change throughout 2022 and 2023 so please seek out an advisor for more information. 7
|2021-2022 Solar Tax Credit Value (26%)
|District of Columbia
How Much Do Solar Panels Cost for a 1500 Square Foot House?
It can depend, but that won’t impact the amount of your tax credit value for 2023.
|2023 Solar Tax Credit Value (22%)
|District of Columbia
Should You Install Solar Panels?
Solar energy and other clean, renewable energy sources, have the potential to make fossil fuels all but obsolete, which would drastically reduce the United States’ greenhouse gas emissions. Although it won’t impact other nation’s use of coal-burning generators, it can make a big difference in your personal carbon footprint or your business carbon footprint… and every little bit helps.
over, this isn’t a distant pipe-dream or the plot of a science fiction novel. Right now, there are nations that get almost one hundred percent of their energy from renewable sources. Countries like Iceland, Sweden, Costa Rica, and Nicaragua have made it their goal to become free of fossil fuels, while countries like Germany produce over 65% of their energy from predominantly solar energy.
There are so many benefits to installing a solar system on your home or business, and those benefits will only increase as engineers and scientists continue to innovate and expand the solar energy field. In fact, according to the Solar Energy Industries Association (SEIA), in 2018, a new set of panels was installed every 100 seconds in the United States and they hypothesized that that number would continue as more and more people committed to renewable energy sources.
Additionally, the solar industry has also seen an expansion. According to SEIA, in 2020, approximately 230,000 people were working in the solar industry. They were divided between 10,000 companies, all looking to improve and innovate on existing technologies. 9
This expansion has been the product of falling prices. The cost of installing solar panels on a residential building has dropped more than 70% in the last decade and it looks like will continue to fall.
While the pandemic has certainly impacted both the industry and its consumers, leading experts are confident that this is just the beginning of a solar energy boom.
Of course, certain will not change. At least for now, you will still need to pay engineers and other contractors to install solar panels on your home, but the actual technology will continue to become more affordable.
For now in most states, it only costs around 10,000 to 15,000 to get started with solar, and once you’ve got your own system set up, then you will start to see the difference it can make. Your utility bills will dramatically decrease, the value of your home will increase, and your lifestyle will become increasingly sustainable.
This is the case even if you only receive some of your power from solar. It makes a difference and dramatically improves your relationship with the environment.
That’s the promise of solar. So if you’ve been asking, “how much do solar panels cost,” now you know. 10
How Much Does It Cost To Install Solar Panels In Maine?
To help you make the most informed decision about solar, we designed this free solar calculator. Input details like the exact location of the property, your current electrical usage, and information about your roof’s orientation, shade, and pitch to receive an estimated price and potential energy cost savings for your custom system.
What Type Of Solar Electric Systems Are Available?
The average system costs noted above are for a grid-tied, roof-mounted solar electric system. Grid-tied, rooftop solar systems are our most common type of solar electric system installed throughout Maine.
However, other solar system options are available, such as grid-tied, grid-tied battery backup, off-grid battery-based systems, and ground mounts. To ensure you get the information you need to make an informed decision about what type of solar system will work best for you, we have outlined the options available below.
These are the most common type of solar electric systems in Maine. With this system, your home can be powered by the sun when it is shining. You are still connected to your utility provider (often called the grid), so you still have power when sunlight is unavailable. Net Metering allows the electricity generated by your solar system to offset the electricity used from the grid during the night or on a cloudy day. This ensures that all of the electricity your system produces offsets your usage and ultimately your electric bill. However, if the grid goes down, your system will shut off, and you will lose power. Grid-tied systems are the less expensive option due to not needing batteries and other additional equipment.
Installing a grid-tied solar electric system is an excellent step towards energy independence. However, during a power outage, your system does not provide power. By pairing a grid-tied solar electric system with battery backup, you can bank the energy you produce for times when you need it, like when the grid goes down. Although whole-house backup is achievable, most grid-tied battery backup systems are designed only to power “critical” electrical loads. If you are thinking about going solar now but want to add batteries in the future, we can design your system to accommodate your future battery needs. These systems are more costly than grid-tied alone.
Many people like the idea of installing an off-grid solar system because of its independence. However, it could require a lifestyle change to reduce energy consumption as you cannot rely on the grid. These systems tend to be most popular in rural locations such as camps or where the nearest power line may be miles away. You will need batteries to store your energy, must monitor the battery health, and be aware that you have a finite amount of energy you can collect and store on a daily basis. These systems have special design and operation requirements making them more challenging to install and service than a more common grid-tied system. They also require more components and usually cost more. Maine Solar Solutions has a design and installation team experienced with off-grid solar systems if you would like to learn more.
Rooftop Solar Versus Ground Mounted Solar
There are two common types of solar panel installations for grid-tied solar systems: roof-mounted and ground-mounted.
Most of the solar electric systems installed in Maine feature rooftop solar arrays. But sometimes aesthetic concerns or heavily shaded roofs make consideration of a ground-mounted solar array advisable. Ground-mounted solar arrays typically cost between 15 – 25% more than rooftop solar arrays. The expense of ground anchors, racking, and trenching accounts for this higher cost. Although a ground-mounted solar array costs more than an equal-sized rooftop array, many of our customers have found that a ground-mounted array provides the best balance of cost, aesthetics, and value. Our experienced solar consultants can show you the relative costs of both options and help you determine what makes the most sense.
The Homeowner’s Guide to Going Solar In Maine
This free resource is packed with answers to the most common questions we receive about solar energy installations in Maine.
What Factors Affect The Cost Of A Solar Electric System?
During your free solar site assessment, we gather information about your home that we use to design your system. We prepare a proposal based on your electricity usage and we show a couple of different solar panel options. Below is the information that we gather that helps us get you a fixed-cost system price.
- Electricity Usage:We review your electric bills and calculate the amount of electricity you use over the course of a year.
- Roof Information: People often ask, “Is my roof good for solar? Does my house face the right way for solar panels? What’s the ideal roof angle for solar?” To answer those questions our solar consultants will measure the angle or pitch of your roof and determine the orientation of your home towards the south. Roofs that face towards the southeast or southwest may require an additional panel or two to produce the same amount of power as a roof that faces directly south. People are often surprised to learn that even if their roof faces directly towards the east or west, annual solar production can still make installing a solar system an affordable investment.
- Shading Measurements: For electricity production, the more exposed your roof is to sunlight throughout the day, the better. Your roof does not need to have full sun all day to be a good candidate for solar, and a partially shaded roof may only require a few additional panels to match the production of an unshaded roof.
- Solar Panel Type:Solar panels account for the greatest equipment cost for a solar electric system. We offer several different solar panels to choose from. There are many solar panel manufacturers, and each manufacturer offers multiple solar panel models. Solar panels differ in size, wattage, efficiency, appearance, and warranty. Each of these specifications impacts the solar panel’s cost and factors into their relative value. Our customers find it helpful when we present a range of solar panel options and take the time to educate them about the differences in panel features, performance, cost, and value.
What Incentives Are Available For Installing Solar?
The primary incentive available to homeowners installing solar in Maine is the Federal Solar Tax Credit (ITC). Solar electric systems installed between 2022 and 2032 qualify for a 30% federal tax credit. This tax credit is scheduled to fall to 26% in 2033 and 22% in 2034. It is currently set to expire in 2035. There’s a lot of information about the ITC out there, so to help, we gathered answers to some commonly asked questions about the federal tax credit here.
What’s Included In My Solar Electric System Costs?
Once your system is designed, and you have chosen which solar panels and optional add-ons you would like to include in your system, we prepare a fixed-cost installation contract that includes all of the equipment and labor required to install a safe, code-compliant system. Your fixed-cost solar electric system includes the following:
- Solar Panels
- Inverter system
- Power Optimizers
- System monitoring so that you can watch the entire array and each panel’s output information on your desktop or your phone
- Racking and roof attachment equipment
- Roof-specific attachment points
- Electrical components required for a safe, code-compliant installation
- Installation labor by Maine Solar Solutions qualified electricians and installers
- Maine Solar Solutions 10-year Workmanship warranty
CUSTOMER SERVICE AND PAPERWORK
- Assistance with all required paperwork, utility, and permitting
- Utility interconnection application fee
- Electric and building permits and associated fees
What Are The Additional Costs Involved To Go Solar?
During our site evaluation, we may determine that your electric service or breaker panel will need to be upgraded to accommodate the solar installation. Your solar proposal will detail the cost of any additional electrical work, and the final system cost will include these costs.
What Add-ons Or Options Are Available When Installing A Solar Electric System?
Battery Backup Systems:A grid-tied solar electric system will not provide backup power during a power outage. We offer battery systems for customers seeking to add a backup power source to their grid-tied solar electric system. The most popular battery backup system is the Telsa Powerwall. Battery systems are eligible for the 30% federal tax credit. If you’re curious about batteries, your solar consultant will review options with you. Even if you aren’t ready for batteries during your initial solar installation, your solar electric system can be designed to allow for the easy addition of batteries later.
Electric Vehicle (EV) Chargers:With the growing popularity of electric cars, many of our solar customers are requesting the installation of an electric car charging station at their homes. Combining an electric vehicle with a solar electric system in your home allows you to fix the cost of operating your electric car and truly enables you to operate your EV as a carbon-free, renewable energy vehicle.
Is Going Solar A Good Return on Investment (ROI) In Maine?
Owning a solar electric system is one of the few investments that truly pays for itself in savings over time. A properly sized and designed solar electric system can eliminate nearly your entire annual electric bill. For most Maine homeowners, the solar electric system will pay for itself in as few as 7-10 years. Customers choosing to finance the purchase of their system may see longer payback times.
Once the system has paid for itself, a typical Maine solar system owner will only have to pay their fixed utility service charge – currently around 15 per month. Whether you pay for your solar system out of or choose to finance the purchase you have essentially fixed your cost of electricity and protected yourself from ever-increasing electricity price increases!
For someone in their 50’s, I looked at installing solar panels as saving for my 401K. Because when I am 70, who knows what the price of electricity will be. I am fixing the cost of most of my electricity for life!
– Cathy G., Gorham, ME
What Are The Ways To Pay For Solar Electric Systems?
Most customers choose between paying upfront for their solar electric system or financing the purchase and paying a monthly payment.
Direct Purchase: Choosing to pay for a solar electric system out of will give you the highest return on your investment. You’ll own your solar panels immediately and not have to pay any interest. Many of our customers have taken advantage of low-interest rates and increasing home values to pay for their solar systems with home equity loans or when refinancing their mortgages.
Solar Loans: Financing the purchase of a solar electric system allows you to fix your cost of electricity for the lifetime of your loan. Your fixed monthly payments may at first be higher than your monthly electric bill, but over time as electricity rates go up, your monthly payments will stay the same. Maine Solar Solutions offers solar financing through Mosaic. Mosaic offers no money down, low-interest rates, and a variety of term lengths with no prepayment penalties. Additional financing options may be available through your local bank or credit union.
Cost should not be the only factor when choosing a solar installation company. A solar electric system will last more than 25 years; it’s important to consider a qualified, experienced company that will provide guidance and support throughout the entire system life span. From initial consult, through installation, with ongoing support and consultation, choose a company with a proven track record. Keep in mind that solar electric systems are installed to meet the requirements of the National Electric Code and as such need to be installed by licensed electricians and qualified technicians under their supervision.
Free Solar Site Assessment
Curious to see what a solar electric system would cost for your home?
At Maine Solar Solutions, our goal is to give you the information you need to make an informed decision. Schedule an informative, free, no-obligation solar consultation with one of our knowledgeable solar consultants today and begin your path towards energy independence.
How Much Does Solar Cost in Portland, OR?
Installing solar panels on your home is a great way to save the environment and be a steward for clean energy, but is it worth the cost? We’ll explain 7 factors that determine the cost of solar and how we determine whether solar for your home provides a positive Return on Investment.
Intro to Solar Costs in Portland
Oregon is one of the best states in the country for investing in solar energy systems. With our long summer days, beneficial net-metering programs, and the State and Federal incentives available, Oregon truly is a fantastic market for solar power. The Energy Trust of Oregon is committed to renewable energy, which translates into high quality, low-cost systems that provide a great return on investment for Homeowners.
Residential solar energy systems in Portland range from about 10,000 to 50,000 before incentives. However, the exact price depends primarily on 7 factors:
Factors that Affect the Cost of Your Solar System
Here are the top 7 factors that will affect the cost of switching to solar. While not all the reasons, these are the major players.
The Size of Your Solar System
The size of your solar system is the number one factor that determines the cost. The size of a system is measured in kilowatts (kW), which is determined by the number of panels multiplied by the wattage of each panel.
For example, a solar system with (20) 400W panels would be 20 x 400W = 8,000 Watts, or a (8 kW) system. Do not confuse this with your solar system’s ability to produce energy over time. The total amount of energy that a system can produce over a period of time is measured in kilowatt-hours (kWh). For more information, please read our article on System Capacity vs. Energy Production.
The Components. Panels, Inverters, Racking, and BOS
The price of a system’s components (the panels, inverters, racking, and BOS) can range widely. You can have a 8 kW system on the same roof, with the same installer, that can cost between 16,000 and 32,000 depending on the components used. Even with tier 1 panels, there is a wide range in cost depending on the brand of the panel, the warranty, the power density (watt per square foot), and the aesthetics (black on white vs. black on black).
Microinverters, with all of their benefits over string inverters, are much more expensive as well. Your racking system, which is used to safely fix panels to your roof and provides a watertight seal on roof connections, ranges in pricing simply by selecting black vs. silver or hidden vs. exposed end-clamps.
Workmanship Quality of Labor
Workmanship and quality of labor plays a huge role not only in the cost but in the value of your solar system as well. Going with seasoned solar installers that are paid by the hour to provide quality craftsmanship is vastly different than working with a national company that pays their installers by the panel with incentives to get on and off the roof as fast as possible so that they can rush over to the next job.
The lower upfront cost may seem enticing but a couple of years down the line, when quality issues begin to arise, you’re going to wish you had paid for a quality installation that was able to withstand the test of time.
Also, small things like running exposed conduits over your roof compared to concealed wiring can save time and cost, but greatly reduce the quality and aesthetics of your installation.
The Pitch of Your Roof
The pitch of your roof determines how fast or how slow the solar installers can move about your roof. A 9/12 (36.9 degrees) roof pitch can take twice as long to install compared to a 4/12 (18.4 degrees) pitch. The pitch can also affect solar production. A 35-degree pitch is an ideal angle for solar production based on the latitude of Portland, OR. Any deviance off that ideal angle will begin to slightly reduce your system’s production.
The Number of Individual Arrays
The number of individual arrays affects the cost of a system because it can potentially take longer and require more materials to install. A single array of (20) panels organized in a 4×5 layout can be mounted on a roof in an afternoon by (2) installers.
Those same (20) panels can take up to three days to install if they’re broken up in sections of 2-4 panels. When breaking up panels, they won’t be able to share rail and utilize continuous wire runs, and will inevitably require additional materials and junction boxes to install.
Portrait vs. Landscape Orientation
Portrait vs. landscape orientation is a big factor in material and labor costs. Mounting a panel in portrait orientation (long side on the vertical axis) saves you money on rail and wiring, and is much easier to install.
Mounting panels in landscape orientation (long side on the horizontal axis) uses more wiring to connect from panel to panel, and more rail to support the long side of the panel. The more rail that you have, the more standoffs that are required. The more standoffs, the more roof penetrations, flashing, and time it takes to install.
Distance to Home Run
Distance to home run is how far your point of interconnection is from the furthest array. This can be the distance from your array to your meter, main service panel, or sub-panel. While that distance can be short, sometimes it’s difficult to run wiring through a tight attic space and can potentially add cost to your project.
Solar Return on Investment (ROI)
Totaling up your project cost and comparing it to how much energy it’ll produce gives us your Solar Return on Investment (ROI). We factor in your existing cost of power and how much your solar system can save you over time. While every home is different, we are able to create custom designs that utilize the best features of your home to maximize your Solar ROI.
The cost of going solar can be expensive upfront, but solar loans are a great way to finance your investment and spread the costs over low monthly payments. There are also zero down payment loan options available that can put solar in reach for many homeowners.
There are many factors that play into the cost of your solar system but when it comes to solar, you get what you pay for. Installing tier 1 panels with better warranties, mounted on black racking systems with concealed end-clamps, and paired with microinverters, may cost you more upfront. But by changing any one of these factors, you can potentially change your power production and the resulting Solar ROI.
Caution: Be wary of any solar supplier who offers a one price fits all model. Each roof is unique and each installation is different. A low-cost solution will likely be done by installers incentivized to move as quickly as possible using poor methods and low-end products with poor customer support. Invest in your home and invest in a system that’s built to last. If your solar system is installed correctly there’s no reason it won’t last 50 years or more.
What is the Average Cost of Solar Panels?
The average cost of solar panels as of Spring 2023 was 3.30 per watt, excluding financing. This price includes hard costs, like hardware and equipment, and soft costs, like installation labor and required permitting.
This cost data comes from a March 2023 Report by the Solar Energy Industries Association (SEIA) in partnership with Wood Mackenzie Power Renewables.
All that to say, there is no set price for a solar panel system, despite what the internet may say. In reality, your system price will be custom to your specific situation and will depend upon a variety of factors that each solar installation company accounts for a bit differently, including:
- Your energy usage and electricity bill
- System size and efficiency
- Solar panel make and model
- Your location within the U.S.
- Eligible tax credits, incentives, and solar rebates
- Local permitting and utility requirements
- Condition and layout of your roof
Now, we introduced lots of concepts in the first two paragraphs: price per watt, incentives, hard costs, soft costs. It can be a lot to take in. In the rest of this article, we’ll break down these ideas and key terms so you can understand them better. We’ll even provide you with an average savings amount per state so you can get a better sense of how much money you could potentially save on monthly costs should you make the decision to go solar.
If you’re ready to estimate your costs now, head on over to our solar panel cost calculator. Using proprietary Mapdwell technology, we analyze the solar potential of your specific roof to provide you with a preliminary system size recommendation, along with cost and savings estimates.
How Are Solar Energy Systems Typically Priced?
There are many ways solar companies share the price of solar panels. The three most popular include:
In our opinion, the most comprehensive method for pricing solar panels is the gross cost. Let’s explain why and then discuss each pricing model in detail.
A lot of work goes into ensuring that you can safely turn on your solar power system–much more than simply attaching solar panels to your roof. The gross or total cost of solar panels will typically encompass everything you need to lawfully turn your system on before financial incentives, such as the Federal Solar Tax Credit, are applied.
Yes—that’s right. You cannot lawfully install or power on your system without getting permission from the “authority having jurisdictions” (AHJs) for your area, which are often government entities. Other entities requiring permission may include your local building department and utility company, though the specifics will vary by location. If your home is part of a homeowners association or HOA, there may be additional approvals required.
Other costs not often mentioned but necessary to the successful completion of your solar panel system include:
- System design and engineering
- Equipment and hardware (e.g. module, inverter, racking, and electrical wiring)
- Permitting and inspections
- Installation cost and labor
At Palmetto, our solar estimate factors in these costs so you can better understand what it takes to begin generating electricity with your solar panels.
Price Per Watt
While we prefer using gross cost as our metric, we cannot discount the importance of price per watt. Price Per Watt—or PPW—is based on the maximum power output of a solar energy system, and is shown as the dollar amount per watt of solar energy a system can produce.
Because solar panels vary in both size and efficiency, this allows homeowners to compare costs based on overall system performance, rather than the number of panels or square feet of roof space. PPW is calculated by taking the gross cost of a solar panel system and dividing it by the total wattage, or power capability, of that system.
How do you calculate the size of the solar system you’ll need? That will depend on your energy usage (which you can see on your electricity bill) and how much of that electricity you want to come from solar panels. This is called solar offset, or the percentage of your total energy needs that can be offset by the electricity your solar panels generate in optimal conditions.
Many homeowners target a 100% solar offset when selecting the right system size for their home. The ability to do this will depend on preference, roof specifications, and utility guidelines. To calculate yours, you can use our free solar design and savings estimator tool.
The difference between gross cost and PPW is that the former already factors in system size, while the latter does not. Using PPW, you’ll be able to measure the comparable value of several solar power system quotes that may differ in solar panel types, wattage, and more.
Price Per Panel
You might also see solar panel systems priced by the panel. This metric is often used to price DIY solar panel kits, which we may recommend for your RV or boat, but not for your home.
It’s true that panels do differ in price depending on their make, model, and efficiency. Higher efficiency panels will likely cost more; however, you will not need as many of those panels to generate the same amount of energy created by a larger system that uses cheaper, low-efficiency panels. You could even spend more on those lower efficiency panels because you need to buy more panels for the same amount of electricity.
We rarely see this metric used to price residential solar energy systems because it leaves a lot of valuable information out of the equation.
Understanding the Hard and Soft Costs of Solar
It’s important to understand that the price tag of solar almost always includes more than just the equipment costs. It includes the costs necessary to install and get your system online. Let’s go over hard costs and soft costs so you can better understand them.
Hard Costs of Solar
The hard costs of solar refer to the physical equipment of your solar panel system, including the following:
- Solar panels
- Solar inverter
- Electrical panel
- Mounting and racking
- Electrical equipment
These will vary by solar company, as not all installers offer the same equipment.
Soft Costs of Solar
The soft costs of solar include labor and time taken to make sure you have all the relevant permits and licenses needed to operate your system. This may include but is not limited to the following:
- Permitting fees
- Inspection fees
- Interconnection fees
- Sales taxes (if applicable)
- Supply chain costs
- Installation costs
- Customer acquisition costs
- Transactional fees
The benefit of choosing a solar installer like Palmetto is that we factor these services into the cost of our system. We work on behalf of our customers to make sure their installations meet strict quality standards and that their system receives the correct permits in order to lawfully operate.
What Does It Cost to Lease Solar Panels?
A solar lease is a financial arrangement where the company that installs your solar panel system retains ownership, and you pay a fixed monthly amount to use any electricity the solar panels produce. Leasing solar also helps you lower your utility bill, and is often ideal for homeowners who are on fixed incomes and/or may not be eligible for the solar tax credit.
With this arrangement, you typically don’t pay any upfront costs for the residential solar installation, and your costs are just the subsequent monthly rent. You’ll make that monthly payment for the duration of your lease, and the solar installer is fully responsible for installation and maintenance.
To learn more about solar leases, visit our article that compares leasing vs. buying solar panels.
How Much Do Solar Panels Save?
Because savings may vary by state, we’ve compiled a table of Palmetto customers’ median system size and median estimated total savings. We sorted the data by state, and forecasted savings based on a 25-year lifetime of the system, before breaking that down into monthly savings.
Monthly savings figures are based on median estimated total savings over 25 years for recent Palmetto customers. Actual savings may vary. This information is current as of March 2023.
Calculate the Cost of Going Solar with Palmetto
Want to see how much you could save by installing solar panels on your home? Using Mapdwell technology, Palmetto has mapped the solar potential of more than half of all rooftops in the United States. To see what your roof could look like with solar panels, and to get a custom quote, use our free solar design tool and cost calculator. You can begin your journey toward a cleaner energy future today!
Why Install Solar Panels in Your Home? Should You Go Solar in 2023?
New tax incentives are making the idea of solar panels more enticing, especially with higher electric and heating bills. Here are some things to consider.
Rising energy and new tax incentives for green home improvements this year are heating up interest in solar.
Experts say it’s a good time for many homeowners to harness solar energy. Though solar power may not work for every home, when it does it can drastically cut home heating bills and lessen damage to the environment caused by the burning of fossil fuels. And while installing a solar energy system is still not cheap, the up-front cost has gone down significantly in the past 10 years.
Cost of solar panels
Costs vary from state to state and depend on things like the size and quality of the solar array. Nationally, the average cost for a residential photovoltaic system is about 20,000 after 30% in federal tax credits, according to EnergySage.com, an information website for residential alternative energy.
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Nick Liberati, communications manager for EnergySage, breaks it down: The national average for a 10-kilowatt system, priced at the national average of 2.86-per-watt, costs 28,600. The federal tax credit allows you to deduct 30% of the cost of installing solar panels from your federal taxes (or in this case, a total of 8,580), bringing the cost to 20,020.
On average, it takes 8.7 years to break even — that is, to save enough on power to recover the cost of solar panels. After that, your solar energy is free until the equipment wears out. Solar panels are typically guaranteed to last 20 to 25 years, although the system’s inverter is generally guaranteed for 10 years. The inverter converts DC electricity generated by solar panels into AC electricity that’s used in your house.
Should you buy a solar panel battery?
The average solar panel cost quoted above doesn’t include storage. A battery can add an average of more than 9,000 after the federal tax credit, depending on the size and other features. Specifically, Liberati says, the national average cost for a battery in the 10-12 kilowatt hour size range is about 13,000. Starting in 2023, all residential batteries will be eligible for the full 30% tax credit as long as they’re over 3 kWh in size. So you’d be able to deduct 3,900 from your taxes, leaving you with a post-tax credit price of 9,100 for the battery.
Although batteries are becoming more popular, most solar houses don’t have them. Instead, most consumers send their excess energy to their utility as credit toward their power usage when the panels aren’t collecting enough, such as at night.
Without a battery, if your utility loses power, your home does, too, even when it’s sunny. “The primary reason for this is safety,” Liberati says. “If your solar panel system is still producing electricity and sending it to the grid during an outage, those energized wires pose a serious safety threat to any utility workers trying to restore electric service to the grid.
That won’t be a problem if you have a battery with “islanding capability.” Islanding is a technology that allows your home to support itself. “You can keep producing solar energy and feeding it to your battery during an outage without posing a risk to line workers because a system that is islanded won’t push excess electricity onto the grid,” Liberati explains. He notes that not all solar panel systems with energy storage can automatically island. If you get a battery, you should make sure your installer gives you the right equipment to enable this technology.
Things to consider when getting solar panels
With so many thousands of dollars required upfront, going solar can be intimidating for many people, notes Vikram Aggarwal, CEO and founder of EnergySage.
Aggarwal urges comparison shopping and checking any claims — such as that your utility or the government will give you solar for free. EnergySage, he says, helps with this and connects consumers with reputable contractors. The site also has information about incentives offered by different states.
Another factor to consider is how your utility company credits you for the solar energy it gets from you, particularly if you don’t have a battery and are reliant on the utility to run your home when your panels aren’t collecting enough.
Michael Ware, a senior solar specialist with consulting firm EcoMotion, says there’s tension over how the utilities credit customers for solar power. The utilities want a discount, similar to how they pay for other forms of energy that they sell to consumers. But solar advocates want the utilities to credit customers the full amount they have to pay for their power, known as net metering.
Sherri Shields, director of communications and marketing for the Florida Solar Energy Center at the University of Central Florida, said people who install solar should check with their insurance companies about whether they cover the panels or whether you have to purchase extra insurance.
Other reasons to go solar
Saving money is just one reason people go solar, notes Robert Stoner, deputy director for Science and Technology of the MIT Energy Initiative. “I think most people who invest in residential rooftop solar simply want to be part of the transition, and to a lesser degree to be seen to be,” he says. “Nothing wrong with that…Some, like me, own homes — my weekend home is at the end of a five-mile-long barrier beach — that simply don’t have the option to have grid electricity.” Stoner says his solar system, which includes a bank of lead acid batteries, provides all of his electricity, “And it brings me a lot of joy! Some of that comes from the feeling of independence I get, and some of it from getting to experience the miracle of electricity being produced from the sun.”
Rotraut Bockstahler, 86, of Sarasota, Fla., with her husband, installed 26 solar panels and a Tesla battery in November 2016. Installing the solar panels cost just under 28,000, and they received a tax credit of about 8,400, leaving a net cost of about 19,600. Getting the battery cost about 8,400, and they received a tax credit of about 2,500, for a net cost of about 5,900. “We feel strongly about climate change and wish to make a contribution to reverse that trend,” Bockstahler says. Going solar “was one of the most positive decisions we made for our living in Florida. We have saved money, made a contribution to fighting climate change and were fortunate enough to have electricity every time there was an outage in the electric grid.”
Going solar doesn’t always cut you off from the power company entirely. When the system was first installed, Bockstahler says, their need for electricity from the utility dropped significantly and their power bills went down to about 40 to 60 a month. With increasing energy costs, they’re now over 100 a month. But in addition to the power bill savings, she counts the money saved on food that didn’t spoil and hotel rooms they didn’t have to get when the power grid failed.
If they have any regrets, she says, it’s that they didn’t get a bigger system. “We feel that the decision we made about the number of panels we have, was maybe a little too conservative and should have included more circuits that could be powered by the battery,” she says.
Should you wait for new solar panel technology?
Another reason you might hesitate to go solar is that technology might advance to offer more efficient and/or less expensive options. And it’s true that different technologies continue to emerge. For instance, some companies are offering roof shingles that serve as solar collectors. Also, standard solar panels have become more efficient, less expensive and better looking.
If you wait, might you have a chance to get something better?
Aggarwal says solar panels do improve slightly each year, but not enough to justify waiting for a dramatic change. A decade ago, he said, the panels would each generate maybe 240 or 245 watts. Now, they each produce 400 or 420 watts of power. So this means, you can get more power from a system that covers the same amount of roof space. The panels, he says, used to be bright blue with silver around the edges. Now, they’re all black and “look beautiful,” he says. And they’re more durable.
Solar shingles, he says, so far haven’t turned out to be ready yet for broad use. Aggarwal says a roofing company plans to introduce “an interesting product” along those lines sometime this year. But solar shingles are still less efficient and more expensive than traditional solar panels. However, if you’re planning to replace your roof, he says, solar shingles may be worth considering.
Ware said he expects the price of batteries to come down in the next five or 10 years as companies explore different battery technologies. The currently most popular battery technology is lithium-ion, which may pose a fire hazard in some instances, leading some jurisdictions to require that they be mounted outdoors.
Is solar right for you?
Some homes are not suitable for solar:
- If you have an old roof that needs to be replaced in a few years, for example, it makes sense to wait because removing and reinstalling solar panels can cost thousands.
- If your roof faces north or is in the shade, you probably aren’t a good solar candidate.
- It’s also more complicated and expensive to install solar on roofs covered with clay tiles, Liberati says.
There is another option for people who can’t put solar collectors on their roofs.
Community solar involves an array of solar panels that people can purchase an interest in. People who participate in community solar generally receive credit from their utility company for power generated by their share of the project. You can find information about community solar projects in your area on the EnergySage website.
Note: This item first appeared in Kiplinger’s Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe here if you want retirement advice that’s right on the money.