How Much Will Home Solar Cost? (Ultimate Guide)

Solar comes at a price. Here's what to expect...

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Breaking Down The Cost Of Solar

The all-in cost of installing a standard rooftop solar system typically varies wildly between $3,000 and $15,000. At roughly $3 per watt, the average cost of installing solar in the USA comes in at $13,142 (after tax incentives).

Solar panels are growing rapidly in popularity throughout the world.

Not only are people excited about producing clean, renewable energy right on their rooftop, but many homeowners are interested in saving money on their electricity bills by switching to solar.

The cost to install solar is currently at an all-time low, making the technology more affordable than ever.

This has led to a huge influx of solar installations as well as new solar companies.

With advertisements and canvassers trying to sell solar panels every day, it is important to know how much it costs to install solar panels.

In this article, we will go over the costs, both expected and unexpected, that factor into how much you can expect to spend on solar panels for your home.

How Much Does a Solar Panel Cost?

One 100W solar panel may only cost about $150 each, whereas more advanced 275W solar panels cost about $400 each.

The most obvious expense in a solar panel installation is the cost of the solar panels. Like all things on the market, solar panels come in a range of quality and prices.

For example, a hamburger made of cheap ingredients at a fast-food restaurant may only cost a dollar.

Whereas this may be a good fit for a quick meal, a higher quality hamburger served at an upscale bistro may cost fifteen dollars, taste better, and be healthier for your body.

Similarly, solar panels have a wide range of costs.

Low wattage panels are always going to cost less than high wattage solar panels.

This is why, when searching for a good deal on solar panels, it is easiest to compare potential solar panels by analyzing the cost per watt.

The average cost per watt of a solar panel in 2020 is $2.96.

Of course, every system is going to be different, so it is important to know these two things:

  1. The panel’s efficiency to produce the amount of electricity you need,
  2. How many solar panels it will take to supply the amount of energy necessary to power your home.

How Many Solar Panels Do I Need?

The average solar panel system installation in USA consists of about 28 to 34 individual solar panels. This amount of solar panels will typically cover the average annual electricity consumption of 11,000 kWh per year.

This helpful online calculator allows you to input information from your electric bills in order to calculate the number of solar panels it will take to cover the total electricity consumption for your home.

If you are using a solar company, they will probably use more precise software to determine how many solar panels your home requires.

Whenever you buy something in bulk, the cost per item usually decreases.

This also holds true with solar, as the average cost of solar panels decreases, the more you purchase.

Solar panels are huge, so the cost of shipping them directly to your house will also vary greatly on the amount of panels you order.

Solar companies will often factor delivery and mileage into the cost to install solar panels.

Hidden Costs of Installing Solar Panels

The thing is, when you are installing solar panels on your roof, there are many more added costs than just simply the amount of money for each solar panel.

In a typical solar panel installation in the middle of a major US city, all of the following costs are incurred throughout the entire installation process:

  • Cost of the solar panels
  • Cost of the mounting system
  • Cost of a solar inverter
  • Cost of the conduit and wiring
  • Cost of labor
  • Cost of associated permits

Cost of the Solar Panels

The average cost of one of a 250W solar panel, after taxes and shipping, would be about $415 each.

As a house typically requires around 30 panels, the total cost of your solar panels would be around $12,450.

Cost of A Solar Mounting System

On average in the United States, Racking typically costs around $0.10 per watt. Therefore, the average total cost of mounting these solar panels would be around $750.

Next, you’ve got to mount the solar panel on your roof or in your yard.

Whether you are using a ground-mounted solar panel system, a rail-less racking system, or attaching the panels with tile hooks, it is impossible to avoid this cost.

Again, this cost will vary depending on the size of your system, so let’s use the example from above.

30 250W solar panels create a total of a 7.5 kW solar system.

Cost of a Solar Inverter

In the USA, a small inverter can go as low as $100, whereas higher capacity and more efficient inverters can cost well over $2,000.

A solar inverter is a necessary part of any residential solar system. A solar inverter converts the DC electricity produced by the solar panels into usable AC current for the home.

There are two main types of inverters

  1. Microinverters
  2. String inverters.

For efficiency’s sake, let’s say you are looking to save money with solar panels by using a string inverter.

String solar inverters have just as large of a price range as solar panels and it is important to know which size of solar inverter needed in order for the solar system to run most efficiently.

When determining the right size for your solar inverter and the overall cost to install solar panels, leaving a little room for error is always best. In our example of a 7.5 kW solar panel system, it would be logical to go with a 7.6 kW inverter, like this one, for around $1,800

Cost of the Conduit and Wiring for Solar

On average, you can expect to spend an additional $500 on miscellaneous solar equipment, including conduit and wiring for solar.

Now that you have your solar panels and your inverter, you will need to wire the entire system together. The wiring and conduit, which is a protective encasing for the materials, only make up a small fraction of the average solar panel cost.

If you are looking to find out how much it costs to install solar panels and a solar battery, you may be surprised to find that storage options are quite expensive.

Cost of Labor for Solar

In our 7.5 kW installation, the cost of labor for both electricians and installers would be $4,425.

Unless you are going to be installing the entire solar panel system yourself, there is going to be a labor cost involved. Most solar companies will include this amount in your solar estimate.

Typically, the average labor cost for installing solar panels is around $0.59 per watt.

Cost of Solar Permit

Solar panel owners must pay a fee to get connected to the grid.

In some cases, the system will also have to be approved by a master electrician or a city representative.

Keep in mind that solar permit fees are going to vary wildly across different states and jurisdictions.

Also, it’s worth noting that many jurisdictions offer permit fees based on your individual project’s cost.

Solar PV Fee Schedule*

For Systems Sized           Consider a Permit Fee of
0- 4 kilowatts (kW-dc)$75
5-10 kilowatts (kW-dc)
11-50 kilowatts (kW-dc)
51-100 kilowatts (kW-dc)
101-500 kilowatts (kW-dc)
501 – 1000 kilowatts (kW-dc)
1000 – 2000 kilowatts (kW-dc)

*This fee schedule is adapted from Solar ABCs Expedited Permit Process for PV Systems with input from Utah’s solar industry representatives.  This proposed fee schedule conforms with best practices outlined by Vote Solar and the U.S. Department of Energy.

Solar Panel Incentives & Rebates (USA)

Throughout 2020 in the United States, there is a 26% tax incentive on the total price of any solar panel system.

This incredible opportunity makes the cost to install solar panels reduced by over one-quarter of the total price.

The average cost of one solar panel can be brought down by any available discounts or tax incentives for installing a renewable energy system.

Depending on your location, there could be discounts available on your solar panels at the city, utility, state, or federal level.

The incentive is scheduled to decrease in 2021 and will disappear entirely for residential solar customers in 2022.

Amount of Money Saved with Solar Panels

With an average cost of installing solar at $13,142 (after tax incentives), solar panels are not cheap. However, when compared to typical electricity prices, solar panel costs will almost always be cheaper.

Many skeptics look upon an array of PV solar panels and think…

“Do you really save money with solar panels?”

Whether it be a bad impression from a pushy salesman or an uneasiness with new technology, a lot of people are unsure if making an investment in solar panels will make it worth it.

Let’s say your average electric bill is $100 per month. This cost will never go away.

Over 25 years, your total cost of electricity would be $30,000.

This figure does not even include the rising cost of electricity, which increases on average at about 3% each year.

Compare that number to the price of your solar panels and you will see your savings instantly.

There are plenty of great tools online, such as this calculator, that demonstrate the amount of money you could really save with solar panels.

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