What Do Solar Panels Cost and Are They Worth It?
Consider solar panels for your home if you have a high utility bill, live in a prime location and qualify for tax breaks or other savings.
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Tommy Tindall is a personal finance writer who joined NerdWallet in 2021, covering consumer debt, practical ways to save money and the gig economy. Before NerdWallet, he worked on the marketing and communications team at Fannie Mae. Today, Tommy strives to make the topic of money approachable for all. His work has appeared in The Washington Post, The Associated Press and on MarketWatch. Tommy is based in Bel Air, Maryland.
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The rising cost of electricity from traditional sources and government incentives to go green make the idea of installing solar panels more attractive for many homeowners.
But the true cost of solar panels, and whether they’ll help you save money. depends on a few key factors.
How much do solar panels cost for homes?
On average, solar panel installation and the system together can run from 15,000 to 25,000, according to the latest information from the Center for Sustainable Energy. Home services booking site Angi bumps that up, putting the normal range for solar panel installation in the U.S. from around 18,000 to 35,000 based on its database of completed projects.
Before you make the leap, learn how your electric bill. location and incentives can impact your wallet over time. Here are five steps to take to determine whether you’ll save more than you spend on solar panels.
Review your electric bill
Solar panels generate their own power and can therefore greatly offset your monthly electricity bill. if not eliminate it. The higher your bill, the more likely you’ll benefit from switching. But be aware that electricity rates and usage — the main charges on your statement — are volatile.
If a utility’s electricity fluctuate, so could the amount of savings, says Garrett Nilsen, deputy director for the U.S. Department of Energy’s solar energy technologies office. Similarly, if energy consumption changes, the amount of savings can also vary.
Electricity rates vary by location. The national average is about 15 cents per kilowatt-hour, according to year-to-date 2022 data from the U.S. Energy Information Administration 
Visit the EIA website to view the most recent per state.
Evaluate your sunlight exposure
sun means more energy produced and a greater potential to save with solar. Certain states, like Arizona and California, average more sunlight hours per day.
Your home’s orientation toward the sun, the amount of shade it gets, and its roof type also affect a solar system’s output. You can estimate the efficiency of panels on your home using this solar panel cost and savings calculator from SolarReviews.
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Estimate and compare the cost of solar panels for homes
The brunt of the expense with solar panels is in installation and the purchase of the actual panels.
Minimal long-term costs can make up for the upfront costs. “Most systems don’t require much maintenance and are designed to last for 20 years or more with little change to the amount of electricity produced,” Nilsen says.
When calculating the total price, consider how much energy you regularly consume — your usage is listed on your monthly utility bill — and what size system will generate the amount needed. Some tools, like the SolarReviews calculator, estimate the system size for you.
With installation, an average residential 5-kW system costs from 3 to 5 per watt, according to the CSE, which results in the 15,000 to 25,000 range. That cost is before any tax credits or incentives.
If you know your current energy usage, you can calculate how much you’ll need to pay for solar panels.
Then comparison shop for solar panels as you would other big-ticket items, such as a car or TV, says Vikram Aggarwal, CEO of the solar marketplace EnergySage. Some companies reduce installation costs through rebates and other programs.
Aggarwal recommends getting quotes from three to five contractors. EnergySage compiles solar companies’ customer reviews, certifications, Better Business Bureau profiles and other information to help you find reputable providers.
Take advantage of government incentives
A federal law passed in 2022 incentivizes consumers to make clean energy enhancements, like installing rooftop solar. A substantial update to an existing energy-related tax break that was set to expire at the end of 2023, the Residential Clean Energy Credit allows taxpayers who have solar (and other approved clean energy equipment) installed to recoup 30% of the cost in the form of a federal tax credit.
What that means: A solar setup that costs 15,000 would yield a 4,500 credit (30% of 15,000) that you can take advantage of come tax time to reduce any federal taxes owed. The credit isn’t refundable though, meaning any money left over after your full tax bill is covered won’t be paid out to you. But you may be able to apply the remainder of the credit toward taxes owed in subsequent tax years.
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The credit applies to eligible equipment installed after Dec. 31, 2021, and remains in effect at the 30% rate through 2032. It decreases incrementally after that.
Depending on your state, you may receive extra incentives like cash back, property tax exemption, waived fees and expedited permits. In some states, homeowners with solar panels can sell excess power to their local utility companies. Look up credits available in your state by reviewing the database of state incentives for renewables and efficiency.
Keep an eye on trade policy
Changes in government trade policy also impact prices. There have been varying tariffs on imported solar cells and panels over the last decade affecting costs and supply. For example, tariffs resulted in a 16-cent-per-watt increase for the average consumer in 2018, which translated to an overall increase of 960 for a 6-kW system, according to EnergySage.
Is solar panel installation right for your home?
If you live in an area with high energy rates and a suitable solar rating, and if you can afford the initial investment, it’s worth installing solar panels on your home while the 30% tax break is in place — for the good of the environment and your wallet. But don’t expect to eliminate your power bill overnight.
If you decide to purchase solar panels, shop around and search for incentives. Consider financing with a solar loan if you’d rather spread out the cost over time. Keep in mind that you don’t have to buy solar panels — you can lease them, too. Leasing offers a lower upfront cost, though since you don’t own the panels, they won’t raise the value of your home, and you may not be eligible for incentives.
Going solar isn’t the only potential way to save money. Learn more about what you can do to lower your bills.
Solar Energy Pros
Based on increased adoption rates, consumers are beginning to see the light when it comes to comparing the pros and cons of solar energy. They recognize the power of utility cost savings, tax deductions, earnings through the sale of surplus power, and a reduced carbon footprint, among other benefits
Top Mistakes Buying Solar Power Systems For Your Home
Over the last century, electricity has evolved from a luxury item to a basic commodity needed for everyday life. Instead of merely lighting homes at night, we now use electricity to cook, cool our homes, and power all manner of crucial electronic devices, including our cars. Even with those consumption increases in other areas, lighting still accounts for around 20% of total electricity costs in the US.
Thus, as our overall reliance on electricity increases, so do the monthly costs. For most people, reducing electricity consumption to lower their monthly bills is a fine idea, but it’s also very difficult to change old habits.
Thus, more and more people are choosing to install solar panels on their homes to find those savings without having to drastically change their lifestyle. When looking at the pros and cons of solar panels, the ability to reduce or even eliminate your utility bill is often seen as one of the biggest benefits of home solar.
Since solar energy is a nearly infinite natural resource, you can capitalize on it to reduce your electricity costs. You can use a smaller solar power system to supplement your power needs, or even meet all your electricity requirements with a large enough system. In either case, you’re reducing your monthly electricity costs.
To go solar, it’s important to work with a reliable solar power installation company like Palmetto and invest in the equipment necessary to meet your electricity needs. After that, your usage will be offset by the electricity generated by your solar panels, and you can even earn credits to cover your utility bill by sending excess electricity to the grid. over, installing solar power panels can save you money through tax credits offered by the federal and state government.
Solar Power Can Increase the Value of Your Home
Millions of Americans buy houses each year. While the location, the number of rooms, and amenities of the kitchen and bathroom are often the top items on a buyer’s list, many Smart buyers also consider the overall costs of utilities and maintenance over time. You can often determine the costs to operate and maintain a home by reviewing its energy efficiency. By examining recent energy bills, homebuyers can get a peek into the long-term health of the home and how it impacts their budget.
With increased awareness of both the environmental and economic benefits of solar energy, recognizing the pros and cons solar panels have become a critical factor in the home-buying process.
By installing a solar power system on your house, it will be more appealing to buyers, often allowing you to sell it at a higher price. Recent research by Zillow suggests that installing solar panels can increase your home’s value by up to 4.1%.
Industry research indicates that buyers will pay more for a house that already has solar panels for two key reasons. First, it allows them to take advantage of work that has already been done to enjoy a solar power system that suits the home’s needs. Solar power also helps keep their monthly utility cost low after they move in.
Home Solar Combats Rising Energy Costs
Electricity plays a critical role in modern-day life. Because of that increased demand, and factors such as the rising cost of fuel, electricity have been rising over the years. According to a US Energy Information Administration (EIA) report, residential electricity will continue to rise in coming years. We can see this same trend with many forms of fossil-fuel-based energy sources over the past few decades.
Yes, such increases are gradual, but they add up and can put a strain on your finances over time. Installing a solar power system is one of the best ways to combat this continued rise in the price of electricity.
Other than the initial price of installation, you will typically incur only a few other costs during the lifetime of your panels for things like routine annual maintenance. When your high-quality solar panels are installed professionally by Palmetto, you will enjoy clean energy and lower utility bills for 25 years or more.
Solar Helps Reduce Your Carbon Footprint
Global warming is arguably the most significant threat the world faces, and human activity is the primary contributor. When gases such as carbon dioxide, methane, chlorofluorocarbons (CFCs), and nitrous oxides are released into the environment, they prevent heat from the earth from escaping into space. As a result, the temperature of the earth’s atmosphere continues to rise, causing climate change.
While the earth has always had greenhouse gases, the amount entering the atmosphere has increased exponentially over the last century. If left unchecked, these gases pose a significant threat to the survival of human beings.
While we know that most of the emissions come from the commercial activities of a handful of companies, many homeowners still worry about their individual contribution to global warming. At a global level, the average carbon footprint per person is 4 tons. However, in the United States of America, this average rises to 16 tons.
Current data indicates that we must reduce the global annual carbon footprint to under 2 tons per person by 2050 to prevent a planet-wide rise in temperature of 2 degrees Celsius. Per the current climate science, an increase of 2 degrees Celsius could result in severe weather events, water shortages, rising sea levels, and more that would be catastrophic to human, plant, and animal life. This is not an easy feat, but we can achieve it through conscious, deliberate, and concerted efforts.
If you want to reduce your personal carbon footprint and do your part for the planet, consider using solar power for your electricity needs. Since the technology does not rely on fossil fuels, it helps significantly reduce your carbon consumption.
Use Renewable Energy
The idea of living everyday life without electricity and cars seems unfathomable. Nonetheless, it could happen because most of the fossil fuels used to produce electricity and power vehicles are finite. If we continue to use them without moderation, we could exhaust them.
That possibility fuels the international push to identify and utilize renewable sources of energy as a long-term solution for our power needs. Using non-renewable energy sources harms the environment, so choosing sustainable resources reduces our reliance on fossil fuels.
When it comes to renewable sources of energy, solar power is the epitome. As long as the sun continues to shine, solar power is virtually inexhaustible. The bright side is that solar power has the potential to meet the world’s energy needs if it’s harnessed well.
What Are the Benefits of Clean Energy?
The most common renewable power technologies include solar, wind, and geothermal energy. Many of these clean energy options can be used in residential and commercial applications.
The environmental and economic benefits of using clean energy are:
Renewable Energy Generates No Emissions
Energy from fossil fuels creates 27% of all greenhouse gas emissions that significantly harm the environment. With clean energy sources, there are no greenhouse gas emission issues.
When electricity is generated from renewable sources, the process does not cause air pollution nor does it produce greenhouse gas emissions like carbon dioxide, methane, nitrous oxide, and fluorinated gasses.
Renewable Energy Lowers Your Carbon Footprint
The carbon footprint is the total amount of greenhouse gasses that are generated because of the consumption of fossil fuels by a particular person or group. In the United States, the average carbon footprint of a person is 16 tons.
The carbon footprint also indicates how many human-induced actions contribute to pollution that leads to many other environmental problems like toxic acid rain, coastal and ocean acidification, and the melting of glaciers and polar ice.
With solar panel installation from Solar Alternatives, you reduce your carbon footprint because you are using a zero-emission energy source.
Renewable Energy Reduces Harmful Air Pollutants
The process of generating electricity from nonrenewable sources like fossil fuels also produces dangerous greenhouse gasses and a harmful air pollutant called ground-level ozone.
Ground-level ozone causes several health problems like coughing, throat irritation, airway inflammation, reduced lung function, and damaged lung tissue.
Using solar panels, a clean energy source will offset the production of harmful air pollutants that cause many environmental and health issues.
Renewable Energy Uses Less Water
Traditional processes of producing electricity require the use of a lot of water. For example, in generating electricity from coal and natural gas, approximately 60,000 gallons of water per MWh of electricity is needed.
A solar panel system will not need any water at all for it to be able to convert solar energy into useful energy that can be used to power homes and business properties.
Renewable Energy Benefits the Economy
Because of the increasing need for clean energy sources like wind and solar power, these industries have employed several individuals. It is estimated that 2.25% of America’s entire workforce are energy workers. This number is only growing.
In fact, it has been reported that in over 30 states, the solar and wind industries have generated more jobs than the coal and gas industries.
In addition to how clean energy benefits the economy by creating more jobs, it also has had a great impact on the reduction of electricity costs.
A Valuable Investment For Your Home
From savings to environmental impact, there are many major benefits that solar power provides to homeowners. Considered together, they make a compelling case for investing in clean energy systems:
- Lower energy bills: Reduced dependence on the grid means lower energy bills. Since solar systems are connected to the local utility, any excess power generated is sent to the grid. You may even receive credit for the contribution.
- Sustainable power: As a renewable resource, solar energy is one of the cleanest and most direct ways to reduce your carbon footprint and the pollution caused by other sources of energy.
- Minimal maintenance costs: Solar technology is designed to be resilient. A well-maintained system is a small price to pay for the decades of value clean energy provides.
Top four benefits of installing solar panels on your home
You too can enjoy the many benefits of using clean energy with quality solar panel installation from experts in the industry.
By investing in a solar panel system today, you can become more energy independent – and contribute less to the myriad of health and environmental issues caused by traditional forms of producing electricity.
Make the wiser, cleaner and greener choice today: make the switch to solar energy for all your electrical needs.
- Savings over the lifetime of a solar system can surpass 50,000 – When you utilize solar, you’ll use your gas and electric utilities less and less and you don’t have to pay the sun to shine. Not one cent.
- Installations are eligible to receive a 26% Federal Tax Credit – Take advantage of these federal tax credits while you can, they are subject to change.
- Solar can be fitted with backup power in addition to energy savings – If you pair your solar panels with a home battery system, it can help you out when the electricity goes out.
- Residential solar panels help avoid annual utility bill increases – Relative to gas and electric bills, the cost of solar is much more concrete as utility bills are always subject to change.
- Improve home resale value by up to 15,000 – Bring your home into the 21st century. Eco-friendly homes are becoming increasingly attractive in the housing market.
- Zero-down and long-term payment options make going solar easy – We’ll work with you to make sure that you can go solar at an affordable price.
- All this from the most renewable source in the world, our Sun – Renewable energy is the gift that keeps on giving. At least speak with our New Orleans residential solar consultants. Your future self will thank you for making a clear choice.
3 EASY STEPS
MAKE THE SWITCH TO SOLAR IN 3 STEPS
- FREE CONSULTATION Contact the Solar Alternatives team for a no-cost breakdown of which solar and energy products make the most sense for your home. We provide the best solar panels for homes.
- INSTALLATION Our professional installation team ensures your new solar products are installed to fit the specific needs of your home.
- ACTIVATION MAINTENANCE Once install is complete, our activation team flips the switch and gets your system running smoothly while our monitoring team takes over and makes sure you receive the production we said you would or we’ll fix it.
We are ready when you are. Fill out the following form or call us at (504) 294-3650 and our helpful team will return your inquiry shortly.
Increase the property value of your home
Want to know a great way to possibly raise your home’s property value, without doing renovations? Going solar!
The exact numbers vary from property to property, but research shows solar helps homeowners fetch a higher asking price. A Rocket Homes survey found that homes for sale with solar spend 13.3% less time on the market and are 24.7% more likely to sell over asking price. (6)
Keep in mind that any value increase on the property value of your home will depend on factors like your local housing market. You can get more details about these factors from a Solar Energy Specialist.
Help save the planet
You can reduce your carbon footprint without leaving home. Unlike fossil fuels, the production of solar energy doesn’t emit harmful greenhouse gases. (7) This is significant, as greenhouse gases cause air and water pollution. When you reduce pollution, you’re contributing to better air and water quality that leads to better health and quality of life.
And when you use less electricity, you ease the demand on nonrenewable energy sources like fossil fuels. These sources are getting depleted at a Rapid rate. (8)
Find out how you can go solar
There you have it! Those are the top 6 benefits of solar energy for homeowners. Pretty intriguing, right? Regardless of what motivates you, there’s at least one good reason for every homeowner to consider a solar panel system.
You can take a deeper dive into what it’s like to use solar energy by downloading our Going Solar 101 eBook. It’s the definitive guide to all the must-know facts about residential solar panel systems.
Or, if you prefer to speak with a Solar Energy Specialist first, they would be happy to answer your questions about going solar. They’ll be your guide to figuring out whether solar energy is right for your family. All you need to do to get started is give us a call at (866) 450-1012.
Disclaimers: Savings vary depending on your energy consumption, system cost, home location and characteristics, and your utility’s policies.
Battery will power essential, or critical loads, only. Power available from battery during an outage varies depending on the loads connected, your energy consumption, and battery configuration. Your system, even with a battery, is not intended for use as a primary or back-up source for critical care including life support and other medical equipment.
1 If you have taxable income and own the system, you may qualify for the solar federal investment tax credit. It is your responsibility to determine your eligibility and to apply. Consult a qualified tax professional for assistance and details.
2 Tax and credits or incentives including those provided by federal, state, or local governments may change or end. This can impact the amount of money you might save.
Megan Oster. Content Strategist, ADT Solar
Megan Oster is a seasoned writer who stays on top of the latest solar industry news and trends, and leverages her considerable experience as a residential solar energy expert to create engaging content. Through her informative pieces, Megan empowers homeowners by educating and guiding them on their solar energy journey. Megan graduated with a Bachelor of Arts degree from Denison University in 2000.