What Do Solar Panels Cost and Are They Worth It?
Consider solar panels for your home if you have a high utility bill, live in a prime location and qualify for tax breaks or other savings.
Lauren Schwahn is a writer at NerdWallet who covers debt, budgeting and money-saving strategies. She contributes to the Millennial Money column for The Associated Press. Her work has also been featured by USA Today, MarketWatch and more. Lauren has a bachelor’s degree in history from the University of California, Santa Cruz. She is based in San Francisco.
Tommy Tindall Lead Writer | Consumer debt, saving money, gig economy
Tommy Tindall is a personal finance writer who joined NerdWallet in 2021, covering consumer debt, practical ways to save money and the gig economy. Before NerdWallet, he worked on the marketing and communications team at Fannie Mae. Today, Tommy strives to make the topic of money approachable for all. His work has appeared in The Washington Post, The Associated Press and on MarketWatch. Tommy is based in Bel Air, Maryland.
Courtney Neidel is an assigning editor for the core personal finance team at NerdWallet. She joined NerdWallet in 2014 and spent six years writing about shopping, budgeting and money-saving strategies before being promoted to editor. Courtney has been interviewed as a retail authority by Good Morning America, Cheddar and CBSN. Her prior experience includes freelance writing for California newspapers.
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here’s how we make money.
The rising cost of electricity from traditional sources and government incentives to go green make the idea of installing solar panels more attractive for many homeowners.
But the true cost of solar panels, and whether they’ll help you save money. depends on a few key factors.
How much do solar panels cost for homes?
On average, solar panel installation and the system together can run from 15,000 to 25,000, according to the latest information from the Center for Sustainable Energy. Home services booking site Angi bumps that up, putting the normal range for solar panel installation in the U.S. from around 18,000 to 35,000 based on its database of completed projects.
Before you make the leap, learn how your electric bill. location and incentives can impact your wallet over time. Here are five steps to take to determine whether you’ll save more than you spend on solar panels.
Review your electric bill
Solar panels generate their own power and can therefore greatly offset your monthly electricity bill. if not eliminate it. The higher your bill, the more likely you’ll benefit from switching. But be aware that electricity rates and usage — the main charges on your statement — are volatile.
If a utility’s electricity fluctuate, so could the amount of savings, says Garrett Nilsen, deputy director for the U.S. Department of Energy’s solar energy technologies office. Similarly, if energy consumption changes, the amount of savings can also vary.
Electricity rates vary by location. The national average is about 15 cents per kilowatt-hour, according to year-to-date 2022 data from the U.S. Energy Information Administration [0]
Visit the EIA website to view the most recent per state.
Evaluate your sunlight exposure
sun means more energy produced and a greater potential to save with solar. Certain states, like Arizona and California, average more sunlight hours per day.
Your home’s orientation toward the sun, the amount of shade it gets, and its roof type also affect a solar system’s output. You can estimate the efficiency of panels on your home using this solar panel cost and savings calculator from SolarReviews.
A NerdWallet account is the smartest way to see the latest financial news and what it means for your wallet.
Estimate and compare the cost of solar panels for homes
The brunt of the expense with solar panels is in installation and the purchase of the actual panels.
Minimal long-term costs can make up for the upfront costs. “Most systems don’t require much maintenance and are designed to last for 20 years or more with little change to the amount of electricity produced,” Nilsen says.
When calculating the total price, consider how much energy you regularly consume — your usage is listed on your monthly utility bill — and what size system will generate the amount needed. Some tools, like the SolarReviews calculator, estimate the system size for you.
With installation, an average residential 5-kW system costs from 3 to 5 per watt, according to the CSE, which results in the 15,000 to 25,000 range. That cost is before any tax credits or incentives.
If you know your current energy usage, you can calculate how much you’ll need to pay for solar panels.
Then comparison shop for solar panels as you would other big-ticket items, such as a car or TV, says Vikram Aggarwal, CEO of the solar marketplace EnergySage. Some companies reduce installation costs through rebates and other programs.
Aggarwal recommends getting quotes from three to five contractors. EnergySage compiles solar companies’ customer reviews, certifications, Better Business Bureau profiles and other information to help you find reputable providers.
Take advantage of government incentives
A federal law passed in 2022 incentivizes consumers to make clean energy enhancements, like installing rooftop solar. A substantial update to an existing energy-related tax break that was set to expire at the end of 2023, the Residential Clean Energy Credit allows taxpayers who have solar (and other approved clean energy equipment) installed to recoup 30% of the cost in the form of a federal tax credit.
What that means: A solar setup that costs 15,000 would yield a 4,500 credit (30% of 15,000) that you can take advantage of come tax time to reduce any federal taxes owed. The credit isn’t refundable though, meaning any money left over after your full tax bill is covered won’t be paid out to you. But you may be able to apply the remainder of the credit toward taxes owed in subsequent tax years.
The credit applies to eligible equipment installed after Dec. 31, 2021, and remains in effect at the 30% rate through 2032. It decreases incrementally after that.
Depending on your state, you may receive extra incentives like cash back, property tax exemption, waived fees and expedited permits. In some states, homeowners with solar panels can sell excess power to their local utility companies. Look up credits available in your state by reviewing the database of state incentives for renewables and efficiency.
Keep an eye on trade policy
Changes in government trade policy also impact prices. There have been varying tariffs on imported solar cells and panels over the last decade affecting costs and supply. For example, tariffs resulted in a 16-cent-per-watt increase for the average consumer in 2018, which translated to an overall increase of 960 for a 6-kW system, according to EnergySage.
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.
How solar panels power a home
Solar power has many applications, from powering calculators to cars to entire communities. It even powers space stations like the Webb Space Telescope.
But most people are concerned about how solar panels can power their house and reduce their electricity bill.
Here’s a step-by-step overview of how home solar power works:
- When sunlight hits a solar panel, an electric charge is created through the photovoltaic effect or PV effect (more on that below)
- The solar panel feeds this electric charge into inverters, which change it from direct current (DC) into alternate current (AC) electricity
- The AC electricity runs through your electrical panel and is distributed throughout your home — just like grid energy
- Excess solar energy is stored in batteries or pushed onto the grid to power local systems (like your neighbor’s house!)
- Through net metering, solar owners get credit for the excess energy they put on the grid to offset the grid energy they pull off the grid when their panels aren’t producing
- With battery storage, solar owners can store excess production to power their homes at night
Now that we’ve covered the basics, let’s break down how solar panels work in more detail.
How does solar power work? The photovoltaic effect explained
Solar panels turn sunlight into elctricity through the photovoltaic (PV) effect, which is why they’re often referred to as PV panels.
The photovoltaic effect occurs when photons from the sun’s rays hit the semiconductive material (typically silicon) in the cell of the solar module. The photons activate electrons, causing them to free themselves from the semiconductive material.
Photons hit the solar panel causing electrons to be freed during the photovoltaic effect.
The free electrons flow through the solar cells, down wires along the edge of the panel, and into a junction box as direct current (DC).
This current travels from the solar panel to an inverter, where it is changed into alternative current (AC) that can be used to power homes and buildings.
How is solar energy used to power your home?
Most home solar systems are “grid-tied” meaning that the solar system, home electrical system, and local utility grid are all interconnected, typically through the main electrical service panel.
Connecting these systems means you can power your home with solar electricity during the day and grid electricity at night. It also means your solar system can push excess electricity onto the local grid to power surrounding systems, like your neighbor’s house.
Through net metering, you earn credit for excess solar production that can be used to offset the grid electricity you use at night.
Home solar with battery storage
Home solar with battery storage works similarly to the process above, but intsead of pushing excess solar production onto the grid, it’s first stored in batteries in your home or garage.
Pairing solar and battery is especially handy for:
- Off-grid solar systems
- Backup electricity during power outages
- Areas without net metering policies
- Powering your home on 100% clean and renewable energy
What types of material are used in solar panels?
The most common residential solar panels contain monocrystalline or polycrystalline (also called multicrystalline) solar cells.
Both types of cells produce electricity when exposed to sunlight, however there are some key differences between the two:
If space is limited on your roof or project site, a higher-efficiency, monocrystalline panel may be preferred, and could result in a better return on investment. Alternatively, a lower-cost, slightly less efficient, polycrystalline panel may do the job just as well if you have ample roof space on your home.
Many panel manufacturers also build panels containing both mono and polycrystalline wafers to form solar cells, capable of harvesting energy from a wider spectrum of light.
Be sure to ask what type of cell (“mono or poly”) your home solar system design contains, This distinction may affect the aesthetics and economics of your project.
Solved! Here’s How Many Solar Panels to Buy to Power a House
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
What size solar generator do you need to run a house?
To determine the size of the solar generator you need to run a house, here’s what you need to know:
Firstly, you need to know how much energy you use each day and each hour (measured in Watt-hours): You can get this information from your power utility bill. If it’s not listed on the utility bill, you can calculate the number of Watt-hours you use each month by subtracting your last two months’ energy usage (measured in Watt-hours, Wh). Take the result and divide it by the number of days to find the energy used each day. The average US household uses between 15000Wh to 30000Wh each day.
Secondly, you need to know how much power you will use at any given moment (measured in Watts): To calculate this figure you must make a table with all your devices and sum up all their Wattages to find the total power output needed to run your home. According to data from the Energy Information Agency (EIA). the average home needs an average of 1250 W each hour (30000 W/24 hours). Note that 1250 W is an average load NOT the actual load on the system. In reality, the load ranges from 1000W to 7000W. So the Lycan 5000 might be equal to the task after some adjustments.
Once you have this knowledge, you can determine the following:
1.The size of the inverter: The size of the inverter should at least be 120% greater than the power needed by your house. Suppose your total wattage is 3000W. In that case, your inverter should be around 3600W.
2.The capacity of the battery: The storage capacity of your solar generator’s batteries should be twice that of your energy consumption when there’s no sunlight. Suppose you use your batteries overnight and use an average of 500Wh for 12 hours. In that case, your total consumption would be 6000W. So your ideal battery capacity would be 12000Wh.
3.The number of solar panels: The minimum number of solar panels you need is calculated by dividing your battery pack’s storage capacity (Watt-hours) by the product of your region’s peak sun hours and your solar panels’ wattage. Let’s say you have a 10000Wh battery pack, 5 peak sun hours, and 320W solar panels. You would need at least seven 320W solar panels to charge your battery pack. And this is only a minimum estimate that doesn’t account for any power you might use while your battery is charging.
If all these calculations confuse you, don’t worry. Try out our simple solar powered calculator that will do all the calculations and even give you recommendations.
How much does a whole house solar generator cost?
The price of whole house solar generators ranges from a few hundred dollars to well over 6000.
Comparatively, you might find that our generators offer better value for your money, including long battery lifespans and device warranties.
The whole house solar generators you can buy with a modest budget below 1500 are the Phoenix 500 and Phoenix 1000. These two generators are not enough to replace grid power but they should be enough to tide you over emergencies.
PHOENIX 500 Solar Generator
The Phoenix 500 Power Station costs around 500 ( 499.99), which is a bargain considering the value it offers.
The Phoenix 500 comes with a 495Wh lithium-ion battery pack and an 800W inverter.
It’s important to note that the Phoenix 500 is not an ideal whole house generator because of its small size. A better option would be the Lycan 5000. However, if you are set on the Phoenix 500 because of its affordability, we recommend you buy two Phoenix 500 devices that you can run in parallel to double their abilities.
Phoenix 1000 Solar Generator
You can own the Phoenix 1000 by spending around 1000 (989.99)
This device comes with a 998.4Wh of LiFePO4 battery capacity and a decent 1500W inverter AC output. You can even run power-hungry devices using the Phoenix 1000’s iBoost technology that can support a load of up to 3000W. You can connect two Phoenix 1000 to double the capacity to 1997Wh and boost AC output to 2700W.
Lycan 5000 Solar Generator
The Lycan 5000 is the ideal whole house solar generator because it is specifically tailored to meet the average home’s energy needs. The Lycan 5000 boasts a 4800Wh LiFePO4 battery capacity and an AC power output of 3000W (7000W peak power).
How to choose the best whole house solar generator?
Here’s what you should know if you want to choose the best whole house solar generator:
Battery Lifespan and Storage Capacity: A solar generator is a huge investment so it should be able to last for a long time to make it worth its cost. For the best experience, a whole house solar generator should have LiFePO4 batteries (can last 10 years if used correctly) and an energy storage capacity of at least 4000Wh.
Inverter Type and Output: The ideal inverter in your generator should be a Pure Sine Wave (PSW) inverter that is compatible with all electronics. In addition, the inverter’s AC power output should at least be 3000W.
Cost: For the best value for your money, your chosen solar generator unit should cost around 5000 or less. When it comes to buying solar generators, cheaper isn’t always best as cheaper solar generators are guaranteed to have low-quality components like lead acid batteries that may last for a year.
Recharge Stats and Options: The best solar generators can charge using two methods at the same time. This will drastically reduce the time needed to recharge to around 1 hour. Take, for example, the Lycan 5000 that can charge using AC power from the grid (max 2400W) and Solar Panels DC power (max 4400W) at the same time for a max input power of 6800W.
Expandability: Your energy needs today won’t necessarily be the same as tomorrow’s. Your family might have more members or you might get more electronics that need power. Either way, you need a solar generator with an expandable battery pack that can accommodate any future changes in your energy needs. The Lycan 5000 is an excellent choice because its battery pack is expandable from 4800Wh to a maximum of 19200Wh.
Best solar generator for homes
It’s no secret that we think that the Lycan 5000 solar generator is the absolute best solar generator for your home. If you are not convinced, let’s take a look at some of its features:
Long-lasting 4800Wh battery pack expandable to 19200Wh: The LiFePO4 batteries with a lifespan of 4500 lifecycles can easily last for over 10 years. over, the expandable battery capacity should be enough to meet your needs.
A 3500W inverter with a peak power rating of 7000W: 3500W should be enough to run most of your household appliances. If you have many power-hungry devices it’s recommended not to use them at the same time. In addition, the 7000W peak power should be able to support the startup of most of your devices.
Max 6800W power input for fast recharge: Charging at the maximum 6800W will cut down your recharge time to around an hour. This means you can use the extra energy for whatever you want. For example, you can feed back the excess power back into the grid and make a profit.
Can be used as an uninterruptible power supply (UPS): If you have critical electronics that must be kept running 24/7 or you simply don’t like interruptions, the Lycan 5000 can seamlessly take over as your power supply whenever there’s a blackout.
With the above features, we believe you will find the Lycan 5000 to be the best solar generator for your home. If you buy the Lycan 5000 during a sale you can enjoy an excellent one-of-a-kind discount. Keep tuned on Renogy whenever it’s a holiday!
You might also consider buying the Phoenix 1000 or Phoenix 500 if the Lycan 5000 is more than you need now. If you buy the Phoenix 1000 or the Phoenix 500, we highly recommend you buy two of them so you can run them in parallel for twice the performance.
Check out the Lycan 5000 and our other products. or contact us if you have any questions.
Related articles: